(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the fiscal year ended December 25, 2004 | ||
or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
Delaware | 13-3711155 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Page | ||||||||
Part I | ||||||||
Item 1: | 3 | |||||||
Item 1A: | 9 | |||||||
Item 2: | 11 | |||||||
Item 3: | 11 | |||||||
Item 4: | 12 | |||||||
Part II | ||||||||
Item 5: | ||||||||
12 | ||||||||
Item 6: | 14 | |||||||
Item 7: | 15 | |||||||
Item 7A: | 41 | |||||||
Item 8: | 42 | |||||||
Item 9: | 43 | |||||||
Item 9A: | 43 | |||||||
Item 9B: | 43 | |||||||
Part III | ||||||||
Item 10: | 44 | |||||||
Item 11: | 44 | |||||||
Item 12: | ||||||||
44 | ||||||||
Item 13: | 44 | |||||||
Item 14: | 44 | |||||||
Part IV | ||||||||
Item 15: | 44 | |||||||
Signatures | 46 | |||||||
Consolidated Financial Statements | 48 | |||||||
Financial Statement Schedule | 78 | |||||||
EXHIBIT 10.47 | ||||||||
EXHIBIT 10.48 | ||||||||
EXHIBIT 10.49 | ||||||||
EXHIBIT 10.50 | ||||||||
EXHIBIT 23.01 | ||||||||
EXHIBIT 31.01 | ||||||||
EXHIBIT 31.02 | ||||||||
EXHIBIT 32.01 |
Item 1. | Business |
3
4
Fiscal 2004 | Fiscal 2003 | Fiscal 2002 | ||||||||||
Intel Corporation
|
14.5 | % | 30.1 | % | 26.9 | % | ||||||
Spirox Corporation
|
20.0 | % | 13.4 | % | 20.9 | % | ||||||
Elpida
|
18.7 | % | 12.4 | % | * | |||||||
Infineon Technologies AG
|
11.6 | % | 10.3 | % | 20.1 | % |
* | Less than 10% of revenues. |
5
6
7
8
Item 1A: | Our Executive Officers |
Name | Age | Position | ||
Dr. Igor Y. Khandros
|
50 | Chief Executive Officer and Director | ||
Joseph R. Bronson
|
56 | President, Member of the Office of the Chief Executive Officer and Director | ||
Jens Meyerhoff
|
40 | Chief Operating Officer and Chief Financial Officer | ||
Benjamin N. Eldridge
|
45 | Senior Vice President of Development and Chief Technical Officer | ||
Yoshikazu Hatsukano
|
65 | Senior Vice President of Asia-Pacific Operations and President of FormFactor K.K. | ||
Peter B. Mathews
|
42 | Senior Vice President of Worldwide Sales | ||
Stuart L. Merkadeau
|
43 | Senior Vice President, General Counsel and Secretary | ||
Richard Mittermaier
|
42 | Principal Accounting Officer |
9
10
Item 2: | Properties |
Square | |||||||||
Location | Principal Use | Footage | Ownership | ||||||
Livermore, CA
|
Corporate headquarters, product design, | 278,597 | Leased | ||||||
(includes the new facility and all
other Livermore, CA space) |
manufacturing, engineering, distribution, research and development | ||||||||
Tokyo, Japan
|
Sales office, marketing, research and development, product design and field service | 8,891 | Leased | ||||||
Seoul, Korea
|
Sales office, product design, field service, service and repair center | 7,608 | Leased | ||||||
Dresden, Germany
|
Service and repair center | 755 | Leased | ||||||
Munich, Germany
|
Sales office | 162 | Leased |
Item 3: | Legal Proceedings |
11
Item 4: | Submission of Matters to a Vote of Security Holders |
Item 5: | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Fiscal Year 2004 | High | Low | ||||||
First Quarter
|
$ | 21.90 | $ | 17.61 | ||||
Second Quarter
|
22.52 | 17.22 | ||||||
Third Quarter
|
22.45 | 16.36 | ||||||
Fourth Quarter
|
28.51 | 18.80 |
Fiscal Year 2003 | High | Low | ||||||
Second Quarter (from June 12, 2003)
|
$ | 21.00 | $ | 16.21 | ||||
Third Quarter
|
23.07 | 17.00 | ||||||
Fourth Quarter
|
27.69 | 17.55 |
12
13
Item 6: | Selected Financial Data |
Dec. 30, | Dec. 29, | Dec. 28, | Dec. 27, | Dec. 25, | ||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Consolidated Statement of Operations Data:
|
||||||||||||||||||||||
Revenues
|
$ | 56,406 | $ | 73,433 | $ | 78,684 | $ | 98,302 | $ | 177,762 | ||||||||||||
Cost of revenues
|
28,243 | 38,385 | 39,456 | 49,929 | 90,159 | |||||||||||||||||
Stock-based compensation
|
| 73 | 426 | 612 | 626 | |||||||||||||||||
Gross margin
|
28,163 | 34,975 | 38,802 | 47,761 | 86,977 | |||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||
Research and development
|
11,995 | 14,619 | 14,592 | 15,569 | 19,813 | |||||||||||||||||
Selling, general and administrative
|
15,434 | 18,500 | 17,005 | 19,044 | 29,018 | |||||||||||||||||
Stock-based compensation
|
259 | 601 | 2,039 | 2,550 | 2,033 | |||||||||||||||||
Restructuring charges
|
| 1,380 | | | | |||||||||||||||||
Total operating expenses
|
27,688 | 35,100 | 33,636 | 37,163 | 50,864 | |||||||||||||||||
Operating income (loss)
|
475 | (125 | ) | 5,166 | 10,598 | 36,113 | ||||||||||||||||
Interest and other income (expense), net
|
1,719 | 477 | 642 | 1,566 | 2,950 | |||||||||||||||||
Income before income taxes
|
2,194 | 352 | 5,808 | 12,164 | 39,063 | |||||||||||||||||
Benefit (provision) for income taxes
|
(115 | ) | (307 | ) | 3,558 | (4,649 | ) | (13,885 | ) | |||||||||||||
Net income
|
2,079 | 45 | 9,366 | 7,515 | 25,178 | |||||||||||||||||
Preferred stock dividend
|
(3,988 | ) | (4,830 | ) | (5,272 | ) | (2,340 | ) | | |||||||||||||
Amount allocated to participating preferred stockholders
|
| | (3,479 | ) | (10 | ) | | |||||||||||||||
Net income (loss) available to common stockholders
|
$ | (1,909 | ) | $ | (4,785 | ) | $ | 615 | $ | 5,165 | $ | 25,178 | ||||||||||
Net income (loss) per share available to common stockholders:
|
||||||||||||||||||||||
Basic
|
$ | (0.57 | ) | $ | (1.19 | ) | $ | 0.14 | $ | 0.25 | $ | 0.67 | ||||||||||
Diluted
|
$ | (0.57 | ) | $ | (1.19 | ) | $ | 0.10 | $ | 0.19 | $ | 0.63 | ||||||||||
Weighted-average number of shares used in per share calculations:
|
||||||||||||||||||||||
Basic
|
3,370 | 4,032 | 4,413 | 21,012 | 37,647 | |||||||||||||||||
Diluted
|
3,370 | 4,032 | 5,906 | 29,280 | 40,054 | |||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||||
Cash, cash equivalents, marketable securities and restricted cash
|
$ | 16,897 | $ | 27,576 | $ | 37,178 | $ | 181,820 | $ | 193,733 | ||||||||||||
Working capital
|
23,391 | 31,074 | 40,641 | 190,844 | 205,105 | |||||||||||||||||
Total assets
|
47,499 | 62,264 | 77,955 | 239,236 | 302,566 | |||||||||||||||||
Long-term debt, less current portion
|
521 | 1,167 | 625 | | | |||||||||||||||||
Redeemable convertible preferred stock and warrants
|
55,129 | 65,201 | 65,201 | | | |||||||||||||||||
Deferred stock based compensation, net
|
(184 | ) | (4,051 | ) | (10,782 | ) | (7,902 | ) | (5,413 | ) | ||||||||||||
Total stockholders equity (deficit)
|
(18,586 | ) | (17,582 | ) | (4,604 | ) | 215,014 | 265,175 |
14
Item 7: | Managements Discussion and Analysis of Financial Condition and Results of Operations |
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Fiscal Year Ended
Dec. 28,
Dec. 27,
Dec. 25,
2002
2003
2004
100.0
%
100.0
%
100.0
%
50.1
50.8
50.7
0.5
0.6
0.4
49.4
48.6
48.9
18.5
15.8
11.2
21.6
19.4
16.3
2.6
2.6
1.1
42.7
37.8
28.6
6.7
10.8
20.3
0.8
1.6
1.7
7.5
12.4
22.0
4.5
(4.7
)
(7.8
)
12.0
7.7
14.2
(6.7
)
(2.4
)
(4.4
)
0.9
%
5.3
%
14.2
%
Fiscal Years Ended December 25, 2004 and
December 27, 2003
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Fiscal 2004
Fiscal 2003
14.5
%
30.1
%
20.0
%
13.4
%
18.7
%
12.4
%
11.6
%
10.3
%
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Fiscal Years Ended December 27, 2003 and
December 28, 2002
Fiscal 2003
Fiscal 2002
30.1
%
26.9
%
13.4
%
20.9
%
12.4
%
*
10.3
%
20.1
%
*
Less than 10% of revenues.
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Payments Due by Fiscal Year
2005
2006-2007
2008-2009
After 2009
Total
(In thousands)
$
3,027
$
4,705
$
4,982
$
7,930
$
20,644
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Our operating results are likely to fluctuate, which could
cause us to miss expectations about these results and cause the
trading price of our common stock to decline.
customer demand for our products;
our ability to deliver reliable, cost-effective products in a
timely manner;
the reduction, rescheduling or cancellation of orders by our
customers;
the timing and success of new product introductions and new
technologies by our competitors and us;
our product and customer sales mix and geographical sales mix;
changes in the level of our operating expenses needed to support
our anticipated growth;
a reduction in the price or the profitability of our products;
changes in our production capacity or the availability or the
cost of components and materials;
our ability to bring new products into volume production
efficiently;
our ability to add manufacturing capacity and to stabilize
production yields and ramp production volume;
our ability to efficiently build out and move into its new
manufacturing facility;
our relationships with customers and companies that manufacture
semiconductor test equipment,
the timing of and return on our investments in research and
development;
our ability to collect accounts receivable;
seasonality, principally due to our customers purchasing
cycles; and
market conditions in our industry, the semiconductor industry
and the economy as a whole.
Cyclicality in the semiconductor industry historically has
affected our sales and might do so in the future, and as a
result we could experience reduced revenues or operating
results.
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If we are unable to manufacture our products efficiently,
our operating results could suffer.
If we do not keep pace with technological developments in
the semiconductor industry, our products might not be
competitive and our revenues and operating results could
suffer.
design innovative and performance-enhancing features that
differentiate our products from those of our competitors;
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transition our products to new manufacturing technologies;
identify emerging technological trends in our target markets;
maintain effective marketing strategies;
respond effectively to technological changes or product
announcements by others; and
adjust to changing market conditions quickly and
cost-effectively.
If semiconductor memory device manufacturers do not
continue the conversion to 300 mm wafers, our growth could be
impeded.
current and projected chip prices;
projected price erosion for the manufacturers particular
chips;
supply and demand issues;
overall manufacturing capability within the manufacturers
target market(s);
the availability of funds to the manufacturer;
the technology roadmap of the manufacturer; and
the price and availability of equipment needed within the 300 mm
facility.
We are subject to general economic and market
conditions.
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We depend upon the sale of our wafer probe cards for
substantially all of our revenues, and a downturn in demand for
our products could have a more disproportionate impact on our
revenues than if we derived revenues from a more diversified
product offering.
If demand for our products in the memory device and flip
chip logic markets declines or fails to grow as we anticipate,
our revenues could decline.
The markets in which we participate are highly
competitive, and if we do not compete effectively, our operating
results could be harmed.
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We derive a substantial portion of our revenues from a
small number of customers, and our revenues could decline
significantly if any major customer cancels, reduces or delays a
purchase of our products.
If our relationships with our customers and companies that
manufacture semiconductor test equipment deteriorate, our
product development activities could be harmed.
become concerned about our ability to protect their intellectual
property;
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become concerned with our ability to deliver quality products on
a timely basis;
develop their own solutions to address the need for testing
improvement;
implement chip designs that include enhanced built-in self-test
capabilities;
regard us as a competitor;
introduce their own wafer probe card product;
establish relationships with others in our industry; or
attempt to restrict our ability to enter into relationships with
their competitors.
Because we generally do not have a sufficient backlog of
unfilled orders to meet our quarterly revenue targets, revenues
in any quarter are substantially dependent upon customer orders
received and fulfilled in that quarter.
We rely upon a distributor for a substantial portion of
our revenues, and a disruption or other change in our
relationship with our distributor could have a negative impact
on our revenues.
If our relationships with our independent sales
representatives change, our business could be harmed.
If semiconductor manufacturers do not migrate elements of
final test to wafer probe test, market acceptance of other
applications of our technology could be delayed.
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Changes in test strategies, equipment and processes could
cause us to lose revenues.
We manufacture all of our products at a single facility,
and any disruption in the operations of that facility could
adversely impact our business and operating results.
If we do not transition effectively to our new operations
and manufacturing site, our manufacturing capacity will be
negatively impacted.
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If we are unable to continue to reduce the time it takes
for us to design and produce a wafer probe card, our growth
could be impeded.
We obtain some of the components and materials we use in
our products from a single or sole source or a limited group of
suppliers, and the partial or complete loss of one of these
suppliers could cause production delays and a substantial loss
of revenues.
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Wafer probe cards that do not meet specifications or that
contain defects could damage our reputation, decrease market
acceptance of our technology, cause us to lose customers and
revenues, and result in liability to us.
cause lower than anticipated yields and lengthening of delivery
schedules;
cause delays in product shipments;
cause delays in new product introductions;
cause us to incur warranty expenses;
result in increased costs and diversion of development resources;
cause us to incur increased charges due to unusable inventory;
require design modifications; or
decrease market acceptance or customer satisfaction with these
products.
If we fail to forecast demand for our products accurately,
we could incur inventory losses.
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If we fail to effectively manage our service centers, our
business might be harmed.
If we do not effectively manage changes in our business,
these changes could place a significant strain on our management
and operations and, as a result, our business might not
succeed.
If we fail to attract, integrate and retain qualified
personnel, our business might be harmed.
We may make acquisitions, which could put a strain on our
resources, cause ownership dilution to our stockholders and
adversely affect our financial results.
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As part of our sales process, we could incur substantial
sales and engineering expenses that do not result in revenues,
which would harm our operating results.
the efforts of our sales force and our distributor and
independent sales representatives;
the complexity of the customers fabrication processes;
the internal technical capabilities of the customer; and
the customers budgetary constraints and, in particular,
the customers ability to devote resources to the
evaluation process.
From time to time, we might be subject to claims of
infringement of other parties proprietary rights, or to
claims that our intellectual property rights are invalid or
unenforceable, which could result in significant expense and
loss of intellectual property rights.
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If we fail to protect our proprietary rights, our
competitors might gain access to our technology, which could
adversely affect our ability to compete successfully in our
markets and harm our operating results.
our means of protecting our proprietary rights will be adequate;
patents will be issued from our currently pending or future
applications;
our existing patents or any new patents will be sufficient in
scope or strength to provide any meaningful protection or
commercial advantage to us;
any patent, trademark or other intellectual property right that
we own will not be invalidated, circumvented or challenged in
the United States or foreign countries; or
others will not misappropriate our proprietary technologies or
independently develop similar technology, duplicate our products
or design around any patent or other intellectual property
rights that we own.
Our failure to comply with environmental laws and
regulations could subject us to significant fines and
liabilities, and new laws and regulations or changes in
regulatory interpretation or enforcement could make compliance
more difficult and costly.
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Because we conduct some of our business internationally,
we are subject to operational, economic, financial and political
risks abroad.
compliance with a wide variety of foreign laws and regulations;
legal uncertainties regarding taxes, tariffs, quotas, export
controls, export licenses and other trade barriers;
political and economic instability in, or foreign conflicts that
involve or affect, the countries of our customers;
difficulties in collecting accounts receivable and longer
accounts receivable payment cycles;
difficulties in staffing and managing personnel, distributors
and representatives;
reduced protection for intellectual property rights in some
countries;
currency exchange rate fluctuations, which could affect the
value of our assets denominated in local currency, as well as
the price of our products relative to locally produced products;
seasonal fluctuations in purchasing patterns in other
countries; and
fluctuations in freight rates and transportation disruptions.
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We might require additional capital to support business
growth, and such capital might not be available.
Our reported financial results may be adversely affected
by changes in accounting principles generally accepted in the
United States.
The Sarbanes-Oxley Act of 2002 and related changes in
securities laws and regulations are likely to increase our
costs.
Unanticipated changes in our tax rates or exposure to
additional income tax liabilities could affect our
profitability.
The trading price of our common stock has been and is
likely to continue to be volatile, and you might not be able to
sell your shares at or above the price that you paid for
them.
Table of Contents
variations in our operating results;
announcements of technological innovations, new products or
product enhancements, strategic alliances or significant
agreements by us or by our competitors;
recruitment or departure of key personnel;
the gain or loss of significant orders or customers;
changes in the estimates of our operating results or changes in
recommendations by any securities analysts that elect to follow
our common stock;
market conditions in our industry, the industries of our
customers and the economy as a whole; and
sales or perceived sales of substantial amounts of our common
stock held by existing stockholders.
If securities analysts do not publish or stop publishing
research or reports about our business, our stock price could
decline.
The concentration of our capital stock ownership with
insiders will likely limit your ability to influence corporate
matters.
Provisions of our certificate of incorporation and bylaws
or Delaware law might discourage, delay or prevent a change of
control of our company or changes in our management and,
therefore, depress the trading price of our common stock.
establish a classified board of directors so that not all
members of our board are elected at one time;
provide that directors may only be removed for cause
and only with the approval of
66
2
/
3
%
of our stockholders;
require super-majority voting to amend some provisions in our
certificate of incorporation and bylaws;
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authorize the issuance of blank check preferred
stock that our board could issue to increase the number of
outstanding shares and to discourage a takeover attempt;
limit the ability of our stockholders to call special meetings
of stockholders;
prohibit stockholder action by written consent, which requires
all stockholder actions to be taken at a meeting of our
stockholders;
provide that the board of directors is expressly authorized to
make, alter or repeal our bylaws; and
establish advance notice requirements for nominations for
election to our board or for proposing matters that can be acted
upon by stockholders at stockholder meetings.
Item 7A:
Quantitative and Qualitative Disclosures about Market
Risk
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Item 8: | Consolidated Financial Statements and Supplementary Data |
Selected Quarterly Financial Data |
Mar. 29, | June 28, | Sept. 27, | Dec. 27, | Mar. 27, | June 26, | Sept. 25, | Dec. 25, | |||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | |||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||||||||
Revenues
|
$ | 18,669 | $ | 22,094 | $ | 26,076 | $ | 31,463 | $ | 37,118 | $ | 43,154 | $ | 51,377 | $ | 46,113 | ||||||||||||||||||
Cost of revenues
|
9,800 | 11,469 | 13,213 | 15,447 | 18,026 | 20,158 | 25,471 | 26,504 | ||||||||||||||||||||||||||
Stock-based compensation
|
138 | 150 | 163 | 161 | 155 | 157 | 154 | 160 | ||||||||||||||||||||||||||
Gross Margin
|
8,731 | 10,475 | 12,700 | 15,855 | 18,937 | 22,839 | 25,752 | 19,449 | ||||||||||||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||||||||
Research and Development
|
3,525 | 3,831 | 3,966 | 4,247 | 4,349 | 4,516 | 5,555 | 5,393 | ||||||||||||||||||||||||||
Selling, general and administrative
|
4,013 | 4,478 | 4,980 | 5,573 | 5,874 | 6,862 | 7,904 | 8,378 | ||||||||||||||||||||||||||
Stock-based compensation
|
636 | 623 | 638 | 653 | 552 | 564 | 455 | 462 | ||||||||||||||||||||||||||
Total operating expenses
|
8,174 | 8,932 | 9,584 | 10,473 | 10,775 | 11,942 | 13,914 | 14,233 | ||||||||||||||||||||||||||
Operating income
|
557 | 1,543 | 3,116 | 5,382 | 8,162 | 10,897 | 11,838 | 5,216 | ||||||||||||||||||||||||||
Interest and other income, net
|
129 | 131 | 520 | 786 | 138 | 325 | 479 | 2,008 | ||||||||||||||||||||||||||
Income before income taxes
|
686 | 1,674 | 3,636 | 6,168 | 8,300 | 11,222 | 12,317 | 7,224 | ||||||||||||||||||||||||||
Provision for income taxes
|
(263 | ) | (642 | ) | (1,395 | ) | (2,349 | ) | (3,197 | ) | (4,466 | ) | (4,820 | ) | (1,402 | ) | ||||||||||||||||||
Net income
|
423 | 1,032 | 2,241 | 3,819 | 5,103 | 6,756 | 7,497 | 5,822 | ||||||||||||||||||||||||||
Preferred stock dividend
|
(1,318 | ) | (1,022 | ) | | | | | | | ||||||||||||||||||||||||
Amount allocated to participating preferred stockholders
|
| (10 | ) | | | | | | | |||||||||||||||||||||||||
Net income (loss) availabe to common stockholders
|
$ | (895 | ) | $ | | $ | 2,241 | $ | 3,819 | $ | 5,103 | $ | 6,756 | $ | 7,497 | $ | 5,822 | |||||||||||||||||
Net income (loss) available to common stockholders per share:
|
||||||||||||||||||||||||||||||||||
Basic
|
$ | (0.20 | ) | $ | | $ | 0.07 | $ | 0.11 | $ | 0.14 | $ | 0.18 | $ | 0.20 | $ | 0.15 | |||||||||||||||||
Diluted
|
$ | (0.20 | ) | $ | | $ | 0.06 | $ | 0.10 | $ | 0.13 | $ | 0.17 | $ | 0.19 | $ | 0.14 | |||||||||||||||||
Weighted-average number of shares used in per share calculations:
|
||||||||||||||||||||||||||||||||||
Basic
|
4,504 | 10,858 | 34,082 | 35,582 | 37,083 | 37,381 | 37,632 | 38,378 | ||||||||||||||||||||||||||
Diluted
|
4,504 | 10,858 | 37,090 | 38,789 | 40,231 | 40,609 | 40,499 | 40,643 |
42
Item 9: | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A: | Controls and Procedures |
Item 9B: | Other Information |
43
Item 10: | Directors and Executive Officers of the Registrant |
Item 11: | Executive Compensation |
Item 12: | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13: | Certain Relationships and Related Transactions |
Item 14: | Principal Accountant Fees and Services |
(1) Consolidated Financial Statements: |
(2) Financial Statement Schedule: |
Schedule II Valuation and Qualifying Accounts | |
All other schedules are omitted as the required information is inapplicable or the information is presented in the Consolidated Financial Statement or Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. |
(3) Exhibits: |
44
Exhibit | ||||
Number | Exhibit Description | |||
10 | .11* | Key Management Bonus Plan (2004) | ||
10 | .12* | Sales Incentive Plan (first half 2004) | ||
10 | .35 | Letter Agreement by and between Infineon Technologies Aktiengesellschaft and FormFactor dated December 10, 2003 | ||
10 | .45* | Probe Card Purchase Agreement by and between Elpida Memory, Inc. and FormFactor dated April 1, 2002 and Agreement by and between Elpida Memory, Inc. and FormFactor dated August 18, 2003 | ||
10 | .46 | Written description of material definitive agreement to increase director compensation entered into on February 16, 2005 | ||
10 | .47 | Intel Agreement Amendment V | ||
10 | .48 | Form of Change of Control Severance Agreement | ||
10 | .49 | Joseph R. Bronson offer letter | ||
10 | .50 | Ronald Foster offer letter | ||
23 | .01 | Consent of Independent Registered Public Accounting Firm | ||
31 | .01 | Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
31 | .02 | Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
32 | .01** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
* | Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from this Form 10-K and have been filed separately with the Securities and Exchange Commission. |
** | This exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. |
45
FORMFACTOR, INC. |
By: | /s/ JENS MEYERHOFF |
|
|
Jens Meyerhoff | |
Chief Operating Officer and | |
Chief Financial Officer |
46
Signature | Title | Date | ||||
/s/ JOSEPH R. BRONSON
|
President, member of the Office of the Chief Executive Officer and Director | March 11, 2005 | ||||
/s/ DR. WILLIAM H. DAVIDOW
|
Director | March 11, 2005 | ||||
/s/ G. CARL EVERETT, JR.
|
Director | March 11, 2005 | ||||
/s/ JAMES A. PRESTRIDGE
|
Director | March 11, 2005 | ||||
/s/ HARVEY A. WAGNER
|
Director | March 11, 2005 |
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
(In thousands, except per share data)
$
78,684
$
98,302
$
177,762
39,456
49,929
90,159
426
612
626
38,802
47,761
86,977
14,592
15,569
19,813
17,005
19,044
29,018
2,039
2,550
2,033
33,636
37,163
50,864
5,166
10,598
36,113
808
1,041
2,450
(79
)
(38
)
(87
)
563
500
642
1,566
2,950
5,808
12,164
39,063
3,558
(4,649
)
(13,885
)
9,366
7,515
25,178
(5,272
)
(2,340
)
(3,479
)
(10
)
$
615
$
5,165
$
25,178
$
0.14
$
0.25
$
0.67
$
0.10
$
0.19
$
0.63
4,413
21,012
37,647
5,906
29,280
40,054
$
708
$
893
$
830
1,331
1,657
1,203
$
2,039
$
2,550
$
2,033
Table of Contents
Notes
Accumulated
Common Stock
Additional
Receivable
Deferred
Other
Retained
Paid-In
from
Stock-Based
Comprehensive
Earnings
Shares
Amount
Capital
Stockholders
Compensation
Loss
(Deficit)
Total
(In thousands, except share data)
4,578,450
$
5
$
10,211
$
(3,818
)
$
(4,051
)
$
$
(19,929
)
$
(17,582
)
26
26
223,113
1,070
1,070
7,538
57
57
(128,983
)
(351
)
345
(6
)
9,196
(9,196
)
2,465
2,465
9,366
9,366
4,680,118
5
20,183
(3,447
)
(10,782
)
(10,563
)
(4,604
)
(100,000
)
(200
)
(200
)
8,755,171
9
137,826
137,835
23,002,626
23
64,872
64,895
306
306
45,338
2,786
2,786
425,653
1,655
1,655
1,668
1,668
282
(282
)
3,162
3,162
Table of Contents
Notes
Accumulated
Common Stock
Additional
Receivable
Deferred
Other
Retained
Paid-In
from
Stock-Based
Comprehensive
Earnings
Shares
Amount
Capital
Stockholders
Compensation
Loss
(Deficit)
Total
(In thousands, except share data)
47
47
(51
)
(51
)
7,515
7,515
7,511
36,808,906
37
226,592
(661
)
(7,902
)
(4
)
(3,048
)
215,014
661
661
1,789,495
2
10,392
10,394
287,236
3,439
3,439
8,556
8,556
170
(170
)
2,659
2,659
(496
)
(496
)
(230
)
(230
)
25,178
25,178
24,452
38,885,637
$
39
$
249,149
$
$
(5,413
)
$
(730
)
$
22,130
$
265,175
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
(In thousands)
$
9,366
$
7,515
$
25,178
5,392
5,147
6,987
2,465
3,162
2,659
57
(4,072
)
1,458
(4,130
)
1,668
8,556
(238
)
(160
)
(161
)
(150
)
(61
)
1,279
1,959
4,462
322
10
38
(7,547
)
(5,294
)
(3,119
)
(5,755
)
(7,668
)
(1,412
)
918
(1,905
)
1,163
3,842
804
1,828
933
4,446
2,071
114
(55
)
(28
)
1,527
12,853
15,043
35,675
(4,177
)
(11,151
)
(37,727
)
(34,111
)
(257,091
)
(138,693
)
22,590
109,255
147,966
(2,835
)
285
300
63
83
(40
)
(18,470
)
(158,619
)
(28,194
)
1,070
139,490
13,833
26
2,786
661
(6
)
(200
)
375
1,000
(602
)
(1,125
)
(1,375
)
863
140,576
14,494
44
6
(4,754
)
(2,956
)
21,981
20,565
15,811
12,855
$
15,811
$
12,855
$
34,836
$
345
$
200
$
$
$
65,201
$
$
9,196
$
282
$
170
$
6,157
$
79
$
38
$
$
179
$
2,573
$
10,271
Table of Contents
Note 1
Formation and Business of the Company:
Fiscal Year
Initial Public Offering
Follow-On Public Offering
Table of Contents
Note 2
Summary of Significant Accounting Policies:
Basis of Consolidation and Foreign Currency
Translation
Use of Estimates
Cash and Cash Equivalents
Marketable Securities
Reclassification
Table of Contents
Restricted Cash
Inventories
Property and Equipment
Impairment of Long-Lived Assets and Long-Lived Assets to
be Disposed of
Table of Contents
Warranty Accrual
$
679
722
(955
)
446
936
(822
)
$
560
Concentration of Credit Risk and Other Risks and
Uncertainties
Table of Contents
Revenue Recognition
Research and Development
Advertising Costs
Income Taxes
Segments
Stock-based Compensation
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
9,366
$
7,515
$
25,178
1,910
2,440
2,106
(3,615
)
(7,375
)
(9,298
)
$
7,661
$
2,580
$
17,986
$
0.14
$
0.25
$
0.67
$
0.08
$
0.01
$
0.48
$
0.10
$
0.19
$
0.63
$
0.06
$
0.01
$
0.45
ESPP Year
ESPP Year
Stock Options Years Ended
Ended
Ended
December 28,
December 27,
December 25,
December 27,
December 25,
2002
2003
2004
2003
2004
4.48
%
3.00
%
3.46
%
0.89
%
1.64
%
5
5
5
0.5
0.5
67
%
67
%
46
%
67
%
56
%
Table of Contents
Net Income Per Share
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
615
$
5,165
$
25,178
4,638
21,180
37,762
(225
)
(168
)
(115
)
4,413
21,012
37,647
$
615
$
5,165
$
25,178
310
$
615
$
5,475
$
25,178
4,413
21,012
37,647
1,493
2,422
2,407
5,846
5,906
29,280
40,054
December 28,
December 27,
December 25,
2002
2003
2004
1,439
1,122
708
46
22,999
17,156
Table of Contents
Comprehensive Income (Loss)
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
9,366
$
7,515
$
25,178
47
(496
)
(51
)
(230
)
$
7,511
$
24,452
December 27, 2003
December 25, 2004
$
47
$
(448
)
(51
)
(282
)
$
(4
)
$
(730
)
Recent Accounting Pronouncements
Table of Contents
Note 3
Balance Sheet Components:
Gross
Gross
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
$
3,115
$
$
(23
)
$
3,092
121,481
4
(162
)
121,323
32,499
(267
)
32,232
$
157,095
$
4
$
(452
)
$
156,647
Gross
Gross
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
$
3,251
$
4
$
$
3,255
147,118
10
(17
)
147,111
16,000
49
16,049
$
166,369
$
63
$
(17
)
$
166,415
Table of Contents
Market
Cost
Value
$
44,651
$
44,459
44,122
43,863
68,322
68,325
$
157,095
$
156,647
Accounts Receivable and Allowance for Doubtful
Accounts
December 27,
December 25,
2003
2004
$
3,128
$
4,586
4,628
6,174
269
472
$
8,025
$
11,232
December 27,
December 25,
2003
2004
$
24,768
$
30,033
6,866
8,704
632
2,100
3,127
29,814
35,393
70,651
(22,668
)
(29,782
)
9,841
18,487
$
22,566
$
59,356
Table of Contents
December 27,
December 25,
2003
2004
$
7,180
$
10,401
387
556
2,567
3,728
$
10,134
$
14,685
Note 4
Notes Payable and Bank Line of Credit:
Note 5
Hedging
Note 6
Commitments and Contingencies:
Environmental Matters
Table of Contents
Leases
$
3,027
2,339
2,366
2,450
2,533
7,929
$
20,644
Indemnification Arrangements
Table of Contents
Legal Matters
Note 7
Redeemable Convertible Preferred Stock:
Table of Contents
Note 8
Stockholders Equity (Deficit):
Preferred Stock
Common Stock
Warrants
Stock Option Plans
Table of Contents
Outstanding Options and Awards
Weighted
Average
Shares
Number of
Aggregate
Exercise
Available
Shares
Exercise Price
Price
Price
1,497,935
4,162,454
$
0.10-6.50
$
21,221
$
5.10
3,500,000
(1,999,243
)
1,999,243
6.50-8.00
13,364
6.68
(223,113
)
0.10-6.50
(1,070
)
4.79
234,559
(234,559
)
1.50-8.00
(1,390
)
5.93
3,233,251
5,704,025
0.10-8.00
32,125
5.63
500,000
(1,807,547
)
1,807,547
6.50-26.07
29,571
16.36
(425,653
)
0.10-9.00
(1,655
)
3.89
399,996
(399,996
)
2.50-19.50
(2,575
)
6.44
2,325,700
6,685,923
0.10-26.07
57,466
8.60
1,840,502
(1,287,325
)
1,287,325
17.06-27.16
26,674
20.72
(38,432
)
(1,789,495
)
0.17-20.49
(10,392
)
5.80
361,007
(361,007
)
3.25-21.84
(4,560
)
12.63
3,201,452
5,822,746
$
0.10-$27.16
$
69,188
$
11.88
Table of Contents
Options Outstanding
Options Vested
Weighted
Average
Weighted
Weighted
Number of
Remaining
Average
Average
Options
Contractual
Exercise
Number
Exercise
Range of Exercise Prices
Outstanding
Life in Years
Price
Vested
Price
15,000
0.41
$
0.10
15,000
$
0.10
500
2.85
0.50
500
0.50
22,336
2.99
0.80
22,336
0.80
8,060
3.30
1.25
8,060
1.25
1,350
3.87
1.50
1,350
1.50
10,675
4.21
2.50
10,675
2.50
284,673
4.46
3.25
284,673
3.25
632
4.57
3.75
632
3.75
1,184
4.75
4.25
1,184
4.25
396,345
5.70
5.50
396,345
5.50
245,269
6.11
6.00
222,417
6.00
1,975,603
7.16
6.50
418,332
6.50
134,636
7.38
7.89
57,848
7.87
240,672
8.39
9.00
64,323
9.00
276,448
8.46
14.00
276,448
14.00
385,535
9.47
17.76
16,494
17.76
1,003,444
8.75
19.39
70,921
19.17
425,684
9,47
20.05
16,789
20.18
101,500
9,33
21.74
2,291
22.00
256,000
9,82
25.95
6,319
25.43
37,200
9.92
26.96
603
26.28
5,822,746
7.73
$
11.88
1,893,540
$
7.57
Deferred stock-based compensation
Table of Contents
Restricted Stock Units
2002 Employee Stock Purchase Plan
Notes receivable
Note 9
Income Taxes:
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
7,013
$
13,025
$
39,642
(1,205
)
(861
)
(579
)
$
5,808
$
12,164
$
39,063
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
(385
)
$
(3,031
)
$
(15,876
)
14
(2
)
(1,887
)
(143
)
(158
)
(252
)
(514
)
(3,191
)
(18,015
)
2,457
(1,085
)
3,679
1,615
(373
)
451
4,072
(1,458
)
4,130
$
3,558
$
(4,649
)
$
(13,885
)
December 27,
December 25,
2003
2004
$
38
$
845
1,024
(59
)
(855
)
1,052
1,403
1,658
4,985
493
1,600
$
4,027
$
8,157
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
$
(1,975
)
$
(4,257
)
$
(13,672
)
(99
)
(365
)
(1,164
)
(476
)
(535
)
(255
)
(561
)
53
(165
)
(2,619
)
(396
)
(213
)
192
535
839
343
328
543
617
(308
)
(12
)
(415
)
9,061
$
3,558
$
(4,649
)
$
(13,885
)
Note 10
Employee Benefit Plan:
Note 11
Operating Segment and Geographic Information:
Table of Contents
Years Ended
December 28,
December 27,
December 25,
2002
2003
2004
55.6
%
50.1
%
35.8
%
20.9
13.5
20.0
7.1
20.1
25.5
0.9
6.0
5.4
15.5
10.3
13.3
100.0
%
100.0
%
100.0
%
Years Ended
December 27,
December 25,
2003
2004
$
21,744
$
58,246
35
676
434
306
353
128
$
22,566
$
59,356
Note 12
Related Party Transactions:
Table of Contents
Note 13
Restatement of Financial Statements:
Note 14
Subsequent Events:
Table of Contents
Balance at
Balance
Beginning
at End of
Description
of Year
Additions
Deductions
Year
(In thousands)
$
414
$
165
$
326
$
253
$
253
$
$
150
$
103
$
103
$
$
62
$
41
$
8,616
$
1,279
$
2,436
$
7,459
$
7,459
$
1,959
$
$
9,418
$
9,418
$
4,462
$
994
$
12,886
$
9,061
$
$
9,061
$
$
$
$
$
$
$
$
$
Table of Contents
Incorporated by Reference
Exhibit
Date of
Exhibit
Filed
Number
Exhibit Description
Form
File No.
First Filing
Number
Herewith
3
.01
Amended and Restated Certificate of Incorporation of the
Registrant as filed with the Delaware Secretary of State on
June 17, 2003.
S-1
333-109815
10/20/03
3.01
3
.02
Amended and Restated Bylaws of the Registrant.
S-1
333-109815
10/20/03
3.02
4
.01
Specimen Common Stock Certificate.
S-1/A
333-86738
5/28/02
4.01
4
.02
Sixth Amended and Restated Rights Agreement by and among the
Registrant and certain stockholders of the Registrant dated
July 13, 2001.
S-1
333-86738
4/22/02
4.02
4
.03
Stockholders Agreement by and among the Registrant,
Dr. Igor Y. Khandros, Susan Bloch and Richard Hoffman dated
February 9, 1994.
S-1
333-86738
4/22/02
4.03
4
.04
Stockholders Agreement by and among the Registrant,
Dr. Igor Y. Khandros, Susan Bloch and Milton Ohring dated
April 11, 1994.
S-1
333-86738
4/22/02
4.04
4
.05
Stockholders Agreement by and among the Registrant,
Dr. Igor Y. Khandros, Susan Bloch and Benjamin Eldridge
dated August 12, 1994.
S-1
333-86738
4/22/02
4.05
4
.06
Stockholders Agreement by and among the Registrant,
Dr. Igor Y. Khandros, Susan Bloch and Charles
Baxley, P.C. dated September 8, 1994.
S-1
333-86738
4/22/02
4.06
10
.01
Form of Indemnity Agreement.
S-1/A
333-86738
5/28/02
10.01
10
.02
1995 Stock Plan, and form of option grant.
S-1
333-86738
4/22/02
10.02
10
.03
1996 Stock Option Plan, and form of option grant.
S-1
333-86738
4/22/02
10.03
10
.04
Incentive Option Plan, and form of option grant.
S-1
333-86738
4/22/02
10.04
10
.05
Management Incentive Option Plan, and form of option grant.
S-1
333-86738
4/22/02
10.05
10
.06
2002 Equity Incentive Plan, and forms of option grant.
S-1/A
333-86738
6/10/03
10.06
10
.07
2002 Employee Stock Purchase Plan.
S-1/A
333-86738
6/10/03
10.07
10
.08
Key Management Bonus Plan (2003).
S-1/A
333-86738
6/10/03
10.08.1
10
.09
Sales Incentive Plan (first half 2003).
S-1/A
333-86738
6/10/03
10.09.1
Table of Contents
Incorporated by Reference
Exhibit
Date of
Exhibit
Filed
Number
Exhibit Description
Form
File No.
First Filing
Number
Herewith
10
.10
Sales Incentive Plan (second half 2003).
S-1
333-109815
10/20/03
10.10
10
.11*
Key Management Bonus Plan (2004).
10-K
000-50307
3/22/04
10.11
10
.12*
Sales Incentive Plan (first half 2004).
10-K
000-50307
3/22/04
10.12
10
.13
Employment Offer Letter dated October 29, 1998 to Yoshikazu
Hatsukano.
S-1
333-86738
4/22/02
10.13
10
.14
Lease by and between Paul E. Iacono and the Registrant dated
June 26, 1995.
S-1
333-86738
4/22/02
10.14
10
.15
First Option to Extend Lease Term by and between Paul E. Iacono
and the Registrant dated October 4, 2002 for the Lease
between the parties dated June 26, 1995.
S-1/A
333-86738
12/18/02
10.12.1
10
.16
Lease by and between Paul E. Iacono and the Registrant dated
April 12, 1996.
S-1
333-86738
4/22/02
10.13
10
.17
First Option to Extend Lease Term by and between Paul E. Iacono
and the Registrant dated October 4, 2002 for the Lease
between the parties dated April 12, 1996.
S-1/A
333-86738
12/18/02
10.13.1
10
.18
Lease by and between Paul E. Iacono and the Registrant dated
November 20, 1996.
S-1
333-86738
4/22/02
10.14
10
.19
First Option to Extend Lease Term by and between Paul E. Iacono
and the Registrant dated October 4, 2002 for the Lease
between the parties dated November 20, 1996.
S-1/A
333-86738
12/18/02
10.14.1
10
.20
Lease by and between Paul E. Iacono and the Registrant dated
April 24, 1997.
S-1
333-86738
4/22/02
10.15
10
.21
First Option to Extend Lease Term by and between Paul E. Iacono
and the Registrant dated October 4, 2002 for the Lease
between the parties dated April 24, 1997.
S-1/A
333-86738
12/18/02
10.15.1
10
.22
Lease by and between Richard K. and Pamela K. Corbett, Robert
and Cheryl Rumberger, Connie Duke and the Registrant dated
March 12, 1998.
S-1
333-86738
4/22/02
10.16
Table of Contents
Incorporated by Reference
Exhibit
Date of
Exhibit
Filed
Number
Exhibit Description
Form
File No.
First Filing
Number
Herewith
10
.23
First Amendment to Standard Industrial/ Single Tenant
Lease Net by and between Richard K. Corbett and
Pamela K. Corbett, Robert Rumberger and Cheryl Rumberger, and
the Registrant dated April 30, 2003.
S-1/A
333-86738
5/21/03
10.16.1
10
.24
Lease by and between L One and the Registrant dated
March 25, 1998.
S-1
333-86738
4/22/02
10.17
10
.25
Pacific Corporate Center Lease by and between Greenville
Investors, L.P. and the Registrant dated May 3, 2001.
S-1/A
333-86738
6/10/03
10.18
10
.26
First Amendment to Pacific Corporate Center Lease by and between
Greenville Investors, L.P. and the Registrant dated
January 31, 2003.
S-1/A
333-86738
5/07/03
10.18.1
10
.27
Pacific Corporate Center Lease by and between Greenville
Investors, L.P. and the Registrant dated May 3, 2001.
S-1/A
333-86738
6/10/03
10.19
10
.28
First Amendment to Pacific Corporate Center Lease by and between
Greenville Investors, L.P. and the Registrant dated
January 31, 2003.
S-1/A
333-86738
5/07/03
10.19.1
10
.29
Pacific Corporate Center Lease by and between Greenville
Investors, L.P. and the Registrant dated May 3, 2001.
S-1/A
333-86738
6/10/03
10.20
10
.30
First Amendment to Pacific Corporate Center Lease by and between
Greenville Investors, L.P. and the Registrant dated
January 31, 2003.
S-1/A
333-86738
5/07/03
10.20.1
10
.31
Third Amended and Restated Loan and Security Agreement by and
between Comerica Bank California and the Registrant
dated February 21, 2003.
S-1/A
333-86738
5/07/03
10.29
10
.32
Basic Purchase Agreement by and among Infineon Technologies
Aktiengesellschaft, Whiteoak Semiconductor Partnership, Promos
Technologies Inc. and the Registrant dated July 9, 1999.
S-1/A
333-86738
6/10/03
10.22
10
.33
Letter Agreement by and between Infineon Technologies
Aktiengesellschaft and the Registrant dated July 19, 2002.
S-1/A
333-86738
5/07/03
10.22.1
Table of Contents
Incorporated by Reference
Exhibit
Date of
Exhibit
Filed
Number
Exhibit Description
Form
File No.
First Filing
Number
Herewith
10
.34
Letter Agreement by and between Infineon Technologies
Aktiengesellschaft and the Registrant dated July 1, 2003.
S-1
333-109815
10/20/03
10.22.2
10
.35
Letter Agreement by and between Infineon Technologies
Aktiengesellschaft and the Registrant dated December 10,
2003.
10-K
000-50307
3/22/04
10.35
10
.36
Authorized International Distributor Agreement by and between
Spirox Corporation and the Registrant dated June 1, 2000.
S-1/A
333-86738
6/10/03
10.23
10
.37
Amendment No. 1 to Authorized International Distributor
Agreement by and between Spirox Corporation and the Registrant
dated July 1, 2003.
S-1
333-109815
10/20/03
10.23.1
10
.38
Probecard Purchase Agreement by and between Samsung Electronics
Industries Co., Ltd. and the Registrant dated November 22,
2000.
S-1/A
333-86738
6/10/03
10.24
10
.39
Agreement by and between Samsung Electronics Industries Co.,
Ltd. and the Registrant dated October 31, 2001,Agreement by
and between Samsung Electronics Industries Co., Ltd. and the
Registrant dated January 10, 2002,and Agreement by and
between Samsung Electronics Industries Co., Ltd. and the
Registrant dated January 22, 2003.
S-1/A
333-86738
6/10/03
10.24.1
10
.40
Intel Corporation Purchase Agreement Capital
Equipment and Services by and between Intel Corporation and the
Registrant dated January 8, 2001, and as amended on
January 22, 2001, on March 1, 2001,and on
April 1, 2001.
S-1/A
333-86738
6/10/03
10.25
10
.41
Amendment to Intel Corporation Purchase Agreement by and between
Intel Corporation and the Registrant dated May 22, 2002.
S-1/A
333-86738
5/07/03
10.25.1
10
.42
Amendment to Intel Corporation Purchase Agreement by and between
Intel Corporation and the Registrant dated June 30, 2002.
S-1
333-109815
10/20/03
10.25.2
10
.43
Production and Development Materials and Services Purchase
Agreement by and between Harbor Electronics and the Registrant
dated April 17, 2002.
S-1/A
333-86738
6/10/03
10.27
Table of Contents
Incorporated by Reference
Exhibit
Date of
Exhibit
Filed
Number
Exhibit Description
Form
File No.
First Filing
Number
Herewith
10
.44
Production and Development Materials and Services Purchase
Agreement by and between NTK Technologies and the Registrant
dated June 25, 2002.
S-1/A
333-86738
6/10/03
10.28
10
.45*
Probe Card Purchase Agreement by and between Elpida Memory, Inc.
and the Registrant dated April 1, 2002 and Agreement by and
between Elpida Memory, Inc. and the Registrant dated
August 18, 2003.
10-K
000-50307
3/22/04
10.45
10
.46
Written description of material definitive agreement to increase
director compensation entered into on February 16, 2005.
8-K
000-50307
2/16/05
10
.47
Intel Agreement Amendment V.
X
10
.48
Form of Change of Control Severance Agreement.
X
10
.49
Joseph Bronson offer letter.
X
10
.50
Ronald Foster offer letter.
X
21
.01
List of Registrantss subsidiaries.
S-1
333-86738
4/22/02
21.01
23
.01
Consent of Independent Registered Public Accounting Firm.
X
31
.01
Certification of Chief Executive Officer pursuant to
15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
31
.02
Certification of Chief Financial Officer pursuant to
15 U.S.C. Section 7241, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
32
.01**
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
*
Confidential treatment has been requested for portions of this
exhibit. These portions have been omitted from this
Form 10-K and have been filed separately with the
Securities and Exchange Commission.
**
This exhibit shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934 or
otherwise subject to the liabilities of that section, nor shall
it be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
whether made before or after the date hereof and irrespective of
any general incorporation language in any filings.
Exhibit 10.47
AMENDMENT V TO THE
CAPITAL EQUIPMENT AND SERVICE AGREEMENT
between
INTEL CORPORATION
and
FORMFACTOR INC.
INTEL AGREEMENT NUMBER C-05673
Amendment Effective Date: 1/08/2005
WHEREAS , Intel Corporation and FormFactor, Inc. (Seller), have entered into a Capital Equipment and Service Agreement, Intel Agreement No. C-05673 (hereinafter called Agreement) dated 1/8/01, as amended by Amendment(s) O dated 1-22-01, Amendment P dated 4-23-01, Amendment Q dated 9-3-01, Amendment R dated 2/4/02, Amendment S dated 6/30/03; Amendment T dated 1/8/04, and by Amendment U dated 9/1/04 and
WHEREAS , the parties wish to amend the Agreement to extend the Term of the Agreement through 7/8/2005 as forth in this Amendment V.
THEREFORE , for valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties agree as follows:
1. | PRE-ESTABLISHED TERMS |
All Terms and conditions of the Agreement remain in full force and effect and apply to this Amendment, unless specifically modified below.
2. | AGREEMENT MODIFICATIONS |
The parties agree to extend the Term of the Agreement, including all of the aforementioned amendments thereto, through July 8, 2005.
AGREED:
INTEL CORPORATION | FORMFACTOR, INC. | |
By: /s/ MIKE DICKEN
|
By: /s/ PETER B. MATTHEWS | |
|
||
|
||
Mike Dicken
|
Peter B. Mathews | |
|
||
(Printed Name)
|
(Printed Name) | |
Commodity Manager
|
VP Worldwide Sales | |
|
||
(Title)
|
(Title) | |
Dec 13
th
, 2004
|
January 3 rd , 2005 | |
|
||
(Date)
|
(Date) |
Exhibit 10.48
FORMFACTOR, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement (the Agreement ) is made and entered into effective as of (the Effective Date ), by and between (the Employee ) and FormFactor, Inc., a Delaware corporation (the Company ).
R E C I T A L S
WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management personnel;
WHEREAS, the Board of Directors of the Company (the Board ) recognizes that, as is the case with many publicly-held corporations, the possibility of a Change in Control (as defined below) exists and that such possibility, and the uncertainty and questions which it may raise among management, could result in the departure or distraction of management personnel to the detriment of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Companys management, including the Employee, to their assigned duties without distraction in light of the possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows.
ARTICLES
1. Definitions . The following terms referred to in this Agreement shall have the following meanings.
Cause shall mean (i) any act of personal dishonesty taken by the Employee in connection with his or her responsibilities as an employee which is intended to result in substantial personal enrichment of the Employee and is reasonably likely to result in material harm to the Company, (ii) the Employees conviction of a felony, (iii) a willful act by the Employee which constitutes misconduct and is materially injurious to the Company, or (iv) continued willful violations by the Employee of the Employees obligations to the Company after the Employee has received a written demand for performance from the Company which describes the basis for the Companys belief that the Employee has not substantially performed his or her duties.
1
Change of Control shall mean the first to occur of any of the following events after the date hereof:
(i) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into or exchanged for voting securities of the surviving entity) more than sixty percent (60%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(ii) (A) any approval by the shareholders of the Company of a plan of complete liquidation of the Company, other than as a result of insolvency or (B) the consummation of the sale or disposition (or the last in a series of sales or dispositions) by the Company of all or substantially all of the Companys assets, other than a sale or disposition to a wholly-owned direct or indirect subsidiary of the Company and other than a sale or disposition which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (by being converted into or exchanged for voting securities of the entity to which such sale or disposition was made) more than sixty percent (60%) of the total voting power represented by the voting securities of the entity to which such sale or disposition was made after such sale or disposition; or
(iii) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the beneficial owner (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 40% or more of the total voting power represented by the Companys then outstanding voting securities; or
(iv) during any period of two consecutive years after the Effective Date, Incumbent Directors cease for any reason to constitute a majority of the Board.
Compensation Continuation Period shall mean the period of time commencing with the date of the Employees Involuntary Termination at any time within twelve (12) months after a Change of Control and ending with the expiration of twelve (12) months following the date of the Employees Involuntary Termination.
Good Reason shall mean the occurrence of any of the following: (i) without the Employees express written consent, a material reduction of the Employees duties, position or responsibilities relative to the Employees duties, position or responsibilities in effect immediately prior to the Change of Control; (ii) a reduction by the Company of the Employees base salary or bonus opportunity as in effect immediately prior to such reduction; (iii) a material reduction by the Company in the kind or level of employee benefits to which the Employee is entitled immediately prior to such reduction with the result that the Employees overall benefits package is materially reduced; (iv) without the
2
Employees express written consent, the relocation of the Employee to a facility or a location more than five (5) miles from his or her current facility and the new location is more than fifty (50) miles the Employees current residence; or (v) the failure of the Company to obtain the assumption of this Agreement by a successor.
Incumbent Directors shall mean directors who either (A) are directors of the Company as of the Effective Date, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors then still in office who either were directors on the Effective Date or whose election or nomination for election was so approved.
Involuntary Termination shall mean a termination of the Employee by the Company without Cause or a resignation by the Employee within 90 days of any event constituting Good Reason.
2. Term of Agreement . This Agreement shall be in effect for the period commencing on the Effective Date and ending on the third anniversary of the Effective Date provided that if a Change of Control shall have occurred during the term of this Agreement, this Agreement shall remain in effect to give effect to its provisions.
3. At-Will Employment . The Company and the Employee acknowledge that the Employees employment is and shall continue to be at-will, as defined under applicable law. If the Employees employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be established under the Companys then existing employee benefit plans or policies at the time of termination.
4. Change of Control and Severance Benefits; Non-solicitation .
(a) Involuntary Termination Following Change of Control . If the Employees employment with the Company terminates as a result of an Involuntary Termination at any time within twelve (12) months after a Change of Control, then the Employee shall be entitled to receive from the Company the following benefits, contingent upon the Employees execution of a release satisfactory to the Company.
(i) Cash Severance Payments . Employee shall receive an aggregate amount (the Severance Amount ) equal to one times the sum of (A) the Employees annual base salary in effect on the date of termination plus (B) the greater of (x) the Employees annual target bonus amount for the year of termination assuming a 100% payout on all objectives under the Companys bonus plan in effect on the date of termination or (y) such annual target bonus amount times the average rate of annual bonus paid to each executive officer (compared to such officers target bonus) covered under a change of control severance agreement substantially similar to this Agreement averaged over the two most recently completed fiscal years preceding the date of termination. The Company shall pay the Severance Amount to the Employee in a lump sum promptly following an execution of a release by the Employee.
(ii) Health Benefits Continuation . During the Compensation
3
Continuation Period, through COBRA or otherwise, the Company shall continue to make available to the Employee and Employees spouse and dependents covered under any group health plans of the Company on the date of such termination of employment, all group health insurance plans in which Employee or such Covered Dependents participate on the date of the Employees termination at the same cost to the Employee as the Employee paid for such benefits prior to termination of employment. To the extent the Company cannot continue to provide such benefits through COBRA or otherwise, it will pay the Employee an amount that would be sufficient to enable the Employee to purchase such benefits from a third party at the same cost to the Employee on an after-tax basis as the Employee paid for such benefits prior to the termination of employment.
(iii) Forfeiture upon Breach of Covenants . Notwithstanding any of the foregoing, if the Employee breaches his or her obligations under paragraph (e) or (f) of this Article 4, from and after the date of such breach, (x) the Employee will no longer be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Amount and (y) the Employee will no longer be entitled to, and the Company will no longer be obligated to make available to Employee or Employees spouse or dependents, any group health insurance plans or any payment in respect of such plans to the extent the Company cannot continue to provide such benefits.
(iv) Equity Acceleration . The vesting and exercisability of each option, restricted stock award, restricted stock unit or other stock based award (each, a Stock Award ) shall be automatically accelerated in full and the forfeiture provisions and/or Company right of repurchase of each Stock Award shall automatically lapse in full. If this clause (iv) would subject the Stock Awards to Section 409A of the Code (as defined below), the Company and the Employee will cooperate to take any such action that the Company deems appropriate to put the Employee in the same position as if Section 409A of the Code did not apply. In no event shall the Stock Awards be amended to reflect this clause (iv) unless and until there has been an Involuntary Termination after a Change of Control.
(b) Other Termination in Connection with a Change of Control. If the Employees employment with the Company terminates other than as a result of an Involuntary Termination at any time within twelve (12) months after a Change of Control, then the Employee shall not be entitled to receive the Severance Amount or other benefits hereunder, but may be eligible for those benefits (if any) as may then be established under the Companys then existing severance and benefits plans and policies.
(c) Termination Apart from a Change of Control . If the Employees employment with the Company terminates for any or no reason other than within twelve (12) months following a Change of Control, then the Employee shall not be entitled to receive the Severance Amount or other benefits hereunder, but may be eligible for those benefits (if any) as may then be established under the Companys then existing severance and benefits plans and policies at the time of such termination.
4
(d) Accrued Wages and Vacation; Expenses . Without regard to the reason for, or the timing of, Employees termination of employment: (i) the Company shall pay the Employee any unpaid base salary due for periods prior to the date of termination; (ii) the Company shall pay the Employee all of the Employees accrued and unused vacation through the date of termination; and (iii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the date of termination. These payments shall be made promptly upon termination and within the period of time mandated by law.
(e) Non-solicitation. In consideration of the benefits and protections conferred under this Agreement, Employee agrees that for the Non-solicit Period (as defined below), the Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Companys Personnel (as defined below) to leave their employment, or take away such Personnel, or attempt to solicit, induce, recruit, encourage or take away such Personnel, either for the Employee or for any other person or entity. Personnel means any of the Companys employees and any former employees who have terminated their employment with the Company within six months of the date of the purported solicitation, in each case excluding the Employees administrative assistant. Non-solicit Period means the period commencing on the date of a Change of Control and ending immediately after the end of the Compensation Continuation Period.
(f) Confidentiality . In consideration of the benefits and protections conferred under this Agreement, the Employee agrees that he or she will continue to abide by the confidentiality provisions in the Companys Employment, Confidential Information and Invention Assignment Agreement, as executed by the Employee.
5. Limitation on Benefits .
(a) Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, the Employee under any other employer plan or agreement (such payments or benefits are collectively referred to as the Benefits ) would be subject to the excise tax (the Excise Tax ) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the Code ), the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is hereinafter referred to as the Limited Benefit Amount ). Unless Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, the Company shall reduce or eliminate the Benefits, by first reducing or eliminating those payments or benefits which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by the Employee pursuant to the preceding sentence shall take precedence
5
over the provisions of any other plan, arrangement or agreement governing the Employees rights and entitlements to any benefits or compensation.
(b) A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by the Companys independent public accountants or another certified public accounting firm of national reputation designated by the Company (the Accounting Firm ) at the Companys expense. The Accounting Firm shall provide its determination (the Determination ), together with detailed supporting calculations and documentation to the Company and Employee within five (5) days of the date of termination of Employees employment, if applicable, or such other time as requested by the Company or by Employee (provided Employee reasonably believes that any of the Benefits may be subject to the Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable by Employee with respect to any Benefits, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Benefits. Within ten (10) days of the delivery of the Determination to the Employee, the Employee shall have the right to dispute the Determination (the Dispute ). If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Employee.
6. Successors .
(a) Companys Successors . Any successor to the Company (whether direct or indirect) to all or substantially all of the Companys business and/or assets shall assume the Companys obligations under this Agreement and agree expressly to perform the Companys obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term Company shall include any successor to the Companys business and/or assets.
(b) Employees Successors . Without the written consent of the Company, Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employees personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
7. Notices .
(a) General . Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him or her at the home address that he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its General Counsel, or to the Chief Financial Officer if the notice to the Company is from the
6
General Counsel.
(b) Notice of Termination . Any termination by the Company or by the Employee shall be communicated by a notice of termination to the other party hereto given in accordance with this Article.
8. Arbitration .
(a) Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in San Francisco, California, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the Rules ). The arbitrator(s) may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrators decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules. The arbitral proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. Employee hereby consents to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.
(c) EMPLOYEE HAS READ AND UNDERSTANDS THIS ARTICLE, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEES RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT
7
LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq.;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
9. Miscellaneous Provisions .
(a) No Duty to Mitigate . The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.
(b) Waiver . No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company other than the Employee. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(c) Integration . This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements, whether written or oral.
(d) Choice of Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.
(e) Severability . The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
(f) Withholding Taxes . All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.
[rest of page intentionally blank]
8
(g) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.
FORMFACTOR, INC. | ||||
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By: | |||
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[Name of Employee] |
9
Exhibit 10.49
[Letterhead of FormFactor, Inc.]
November 17, 2004
Joseph R. Bronson
6838 Rockview Ct.
San Jose, Ca. 95120
Dear Joe,
We welcome the opportunity to offer you a salaried, exempt position with FormFactor, Inc. (the Company) as President and a member of the Office of the CEO, starting Wednesday, November 17, 2004. We look forward to having you join us at this exciting time for the Company.
In your capacity as President, you will report to Igor Khandros, Chief Executive Officer, and will receive an annual salary of $300,000, which will be paid bi-weekly in accordance with, and subject to, the Companys normal payroll procedures. You will also be eligible to participate in the annual Key Management Bonus Plan at a target rate of 100% of your earned annual salary. This bonus is conditioned upon the companys performance and your individual achievement of objectives, and will be prorated based upon your start date through the end of the fiscal year.
The Company will pay you a $20,000 bonus, which you will receive as a separate check included with your first paycheck. This number is a gross dollar figure. Please be aware you will be responsible for all personal income taxes related to this sign-on bonus. We advise that you consult your tax consultant on this matter.
The Company will pay you a $3,000 per month housing allowance beginning when you start incurring expenses for housing in the local area and will continue as long as the housing expenses are incurred.
As long as you remain a regular full-time employee of the Company, you are eligible to receive certain employee benefits that are offered to our regular full-time employees, which may from time to time change at the Companys discretion. These currently include:
- | Medical, Dental and Vision Insurance Benefits | |||
- | Short-Term and Long-Term Disability Insurance Coverage | |||
- | Group Life Insurance | |||
- | Paid Time-Off | |||
- | 401k Plan with Company Match | |||
- | Section 125 Flex Spending Plan | |||
- | Employee Assistance Program | |||
- | Employee Stock Purchase Plan |
Coverage for the above-mentioned medical, dental, vision, disability and life insurance benefits begin on your date of hire. Dependent coverage is also available through this plan. Employee and dependent contributions to the plan are outlined in our employee benefits guide (Benefactor).
You will be entitled to fifteen days (15) of paid time-off annually. Paid time-off will accrue at the rate of 4.62 hours per pay period starting from your first day of employment. Paid time-off may be used for vacation or sick leave.
Employment Offer Letter
Joseph R. Bronson
November 17, 2004
Page 2
Following your employment commencement date, you will be granted a stock option, entitling you to purchase 200,000 shares of common stock of the Company. The exercise price of your option will be set at the fair market value of the Companys common stock as determined by the closing price on the Nasdaq National Market on the date of grant, which will be your date of hire. The Vesting Commencement Date will also be your date of hire. The option shall be subject to the terms and conditions of the Companys 2002 Equity Incentive Plan. The option vests over a four-year period. On the first anniversary of the Vesting Commencement Date, the option shall be vested as to twenty-five percent (25%) of the shares covered by the option. The remaining Shares subject to the option shall then vest on a monthly basis commencing one year after the Vesting Commencement Date in increments of 1/36 of the remaining shares subject to the option.
You will also be granted under the Plan, as of the date you commence employment with the Company, restricted stock units (RSUs) which represent the right to receive 38,432 shares of Company stock upon vesting. The RSUs shall vest in four equal installments on January 1 of each of 2006, 2007, 2008 and 2009.
Your agreement to accept this offer is contingent upon your ability to show proof of your legal right to work for the Company in the United States.
You should be aware that your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause. The Compensation Committee of the Board of Directors has decided to implement a change of control arrangement for the Executive Officers of the Company. As President, you will be entitled to receive the benefits of this change of control arrangement, which will be finalized on or about December 8, 2004.
I have enclosed our standard Agreement Regarding Employment, Confidential Information, Invention Assignment, and Arbitration as a condition of your employment. We will not be able to commence your employment until we have received a signed copy of this document. If you accept this offer, please return a signed copy to me. That Agreement requires, among other things, that in the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that all such disputes shall be fully and finally resolved by final and binding arbitration conducted by the American Arbitration Association in Alameda County, California. However, the parties shall continue to have the right to seek judicial relief in the form of injunctive and/or equitable relief, including but not limited to relief for threatened or actual misappropriation of trade secrets or other unfair competition.
Additionally, you will be required to comply at all times with the Companys various rules, policies and procedures, including those set forth in our Employee Handbook, our Statement of Corporate Code of Business Conduct (Corporate Code), and our Statement of Policy regarding Insider Trading (Insider Trading Policy). Copies of these three documents, and all our policies and procedures will be available in hard copy and on Zunou - our internal intranet site. Within 30 days of the commencement of your employment, you will be required to provide the Company with signed acknowledgements relating to the Employee Handbook, the Corporate Code and the Insider Trading Policy. You should understand that, while referenced in this offer letter, the Company rules, policies and procedures are not incorporated by reference into this offer letter, and they can be changed, replaced or withdrawn at any time at the discretion of the Company.
To indicate your acceptance of the Companys offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records. This offer, if not accepted, will expire ten (10) days from the offer date. This letter, along with the agreement relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior
Employment Offer Letter
Joseph R. Bronson
November 17, 2004
Page 3
representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you.
Joe, we look forward to your favorable reply and to a productive, fun and exciting working relationship.
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Sincerely, | |
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FormFactor, Inc. | |
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/s/ I GOR Y. K HANDROS | |
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Igor Khandros | |
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CEO | |
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FormFactor, Inc |
ACCEPTED AND AGREED TO this 17 th day of November , 2004
/s/ J
OSEPH
R. B
RONSON
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Joseph R. Bronson
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Exhibit 10.50
[Letterhead of FormFactor, Inc.]
January 27, 2005
Ronald C. Foster
1530 Hillview Drive
Los Altos, CA 94024
Dear Ron,
We welcome the opportunity to offer you a salaried, exempt position with FormFactor, Inc. (the Company) as Senior Vice President and Chief Financial Officer. We look forward to having you join us at this exciting time for the Company. We are very impressed with your background, demonstrated abilities, and fundamental understanding of the challenges involved in a fast paced, growing company, and look forward to your participation in meeting the opportunities ahead.
In your capacity as Chief Financial Officer, you will report to both members of the Office of the Chief Executive Officer (Igor Khandros, CEO and Joe Bronson, President) and will receive an annual salary of $275,000, which will be paid bi-weekly in accordance with, and subject to, the Companys normal payroll procedures. You will also be eligible to participate in the annual Key Management Bonus Plan at a target rate of 70% of your earned annual salary. This bonus is conditioned upon the companys performance and your individual achievement of objectives, and will be prorated based upon your start date through the end of the bonus period
The Company will pay you a $50,000 bonus, which you will receive as a separate check included with your first paycheck. This number is a gross dollar figure. Please be aware you will be responsible for all personal income taxes related to this sign-on bonus. We advise that you consult your tax consultant on this matter.
As long as you remain a regular full-time employee of the Company, you are eligible to receive certain employee benefits that are offered to our regular full-time employees, which may from time to time change at the Companys discretion. These currently include:
- | Medical, Dental and Vision Insurance Benefits | |||
- | Short-Term and Long-Term Disability Insurance Coverage | |||
- | Group Life Insurance | |||
- | Paid Time-Off | |||
- | 401k Plan with Company Match | |||
- | 401k Variable Contribution Plan | |||
- | Section 125 Flex Spending Plan | |||
- | Employee Assistance Program | |||
- | Employee Stock Purchase Plan |
Coverage for the above-mentioned medical, dental, vision, disability and life insurance benefits begin on your date of hire. Dependent coverage is also available through this plan. Employee and dependent contributions to the plan are outlined in our employee benefits guide (Benefactor).
You will be entitled to fifteen days (15) of paid time-off annually. Paid time-off will accrue at the rate of 4.62 hours per pay period starting from your first day of employment. Paid time-off may be used for vacation or sick leave.
Employment Offer Letter
Ronald C. Foster
January 27, 2005
Page 2 of 3
Following your employment commencement date, you will be granted a stock option, entitling you to purchase 110,000 shares of common stock of the Company. The exercise price of your option will be set at the fair market value of the Companys common stock as determined by the closing price on the Nasdaq National Market on the date of grant, which will be your date of hire. The Vesting Commencement Date will also be your date of hire. The option shall be subject to the terms and conditions of the Companys 2002 Equity Incentive Plan. The option vests over a four-year period. On the first anniversary of the Vesting Commencement Date, the option shall be vested as to twenty-five percent (25%) of the shares covered by the option. The remaining Shares subject to the option shall then vest on a monthly basis commencing one year after the Vesting Commencement Date in increments of 1/36 of the remaining shares subject to the option.
Your agreement to accept this offer is contingent upon your ability to show proof of your legal right to work for the Company in the United States.
You should be aware that your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause. The Compensation Committee of the Board of Directors has decided to implement a change of control arrangement for the Executive Officers of the Company. As Chief Financial Officer, you will be entitled to receive the benefits of this change of control arrangement.
I have enclosed our standard Agreement Regarding Employment, Confidential Information, Invention Assignment, and Arbitration as a condition of your employment. We will not be able to commence your employment until we have received a signed copy of this document. If you accept this offer, please return a signed copy to me. That Agreement requires, among other things, that in the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that all such disputes shall be fully and finally resolved by final and binding arbitration conducted by the American Arbitration Association in Alameda County, California. However, the parties shall continue to have the right to seek judicial relief in the form of injunctive and/or equitable relief, including but not limited to relief for threatened or actual misappropriation of trade secrets or other unfair competition.
Additionally, you will be required to comply at all times with the Companys various rules, policies and procedures, including those set forth in our Employee Handbook, our Statement of Corporate Code of Business Conduct (Corporate Code), and our Statement of Policy regarding Insider Trading (Insider Trading Policy). Copies of these three documents, and all our policies and procedures will be available in hard copy and on Zunou - our internal intranet site. Within 30 days of the commencement of your employment, you will be required to provide the Company with signed acknowledgements relating to the Employee Handbook, the Corporate Code and the Insider Trading Policy. You should understand that, while referenced in this offer letter, the Company rules, policies and procedures are not incorporated by reference into this offer letter, and they can be changed, replaced or withdrawn at any time at the discretion of the Company.
To indicate your acceptance of the Companys offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records. This offer, if not accepted, will expire ten (10) days from the offer date. This letter, along with the agreement relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you.
Employment Offer Letter
Ronald C. Foster
January 27, 2005
Page 3 of 3
Ron, we look forward to your favorable reply and to a productive, fun and exciting work relationship. To confirm your acceptance of this offer, please sign and date one copy of this letter and return to me. The other copy is for you to retain for your records. This offer, if not accepted, will expire ten (10) days from the offer date. Please call me if you have any questions.
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Sincerely, | |
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/s/ H ANK F EIR | |
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Hank Feir | |
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Vice President, Human Resources | |
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FormFactor, Inc |
ACCEPTED AND AGREED TO this 7th day of February, 2005
/s/ R
ONALD
C. F
OSTER
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Ronald C. Foster
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Exhibit 23.01
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8
(No.s 333-106043 and 333-115137) of FormFactor, Inc. of our report dated March 11, 2005
relating to the financial statements, financial statement schedule, managements assessment of
the effectiveness of internal control over financial reporting and the effectiveness of internal
control over financial reporting, which appears in this Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Jose, California
Exhibit 31.01
Certification of Chief Executive Officer Pursuant to 15 U.S.C. § 7241
I, Dr. Igor Y. Khandros, certify that:
1.
I have reviewed this annual report on Form 10-K of FormFactor, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4.
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
d)
disclosed in this report any change in the registrants internal control
over financial reporting that occurred during the registrants most recent fiscal
quarter that has materially affected, or is reasonably likely to materially affect,
the registrants internal control over financial reporting; and
5.
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions):
a)
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
b)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
By:
/
s
/ Dr. Igor Y. Khandros
Dr. Igor Y. Khandros
Chief Executive Officer
Exhibit 31.02
Certification of Chief Financial Officer Pursuant to 15 U.S.C. § 7241
I, Jens Meyerhoff, certify that:
1.
I have reviewed this annual report on Form 10-K of FormFactor, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4.
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
d)
disclosed in this report any change in the registrants internal control
over financial reporting that occurred during the registrants most recent fiscal
quarter that has materially affected, or is reasonably likely to materially affect,
the registrants internal control over financial reporting; and
5.
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions):
a)
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
b)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
By:
/
s
/ Jens Meyerhoff
Jens Meyerhoff
Chief Financial Officer
Exhibit 32.01
Certification Pursuant to 18 U.S.C. § 1350
The certification set forth below is being submitted in connection with this annual report on
Form 10-K of FormFactor, Inc. (the Annual Report) for the purpose of complying with Rule
13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the Exchange Act) and Section
1350 of Chapter 63 of Title 18 of the United States Code.
Dr. Igor Y. Khandros, the Chief Executive Officer and Jens Meyerhoff, the Chief Financial
Officer of FormFactor, Inc., each certifies that, to the best of their knowledge:
1.
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of
the Exchange Act; and
2.
the information contained in the Annual Report fairly presents, in all material
respects, the financial condition and results of operations of FormFactor, Inc.
/s/ D
R
. I
GOR
Y. K
HANDROS
Name: Dr. Igor Y. Khandros
Chief Executive Officer
/s/ J
ENS
M
EYERHOFF
Name: Jens Meyerhoff
Chief Financial Officer