(e) On December 3, 2008, Verigy's Compensation Committee determined the actual performance results for the performance measures under Verigy's incentive compensation bonus program and approved the amount of the bonus to which each plan participant is entitled under the terms of the program for the six-month period ended October 31, 2008.

Actual bonuses paid to the participants in the program for the second half of the fiscal year under the incentive compensation bonus program were earned based on the achievement of operating profit goals, short-term financial goals based on the company's second half fiscal 2008 financial plan, and relative total shareholder return. Individual target bonuses for the company's named executive officers ranged from 55% to 100% of base salary. The actual percent achieved by these participants for the six-month program period ended October 31, 2008, ranged from 53% to 76% of individual target bonuses.

The following table sets forth the semi-annual bonus amounts earned in the second half of fiscal year 2008 for the company's named executive officers.

                                                          Fiscal Year 2007
                                                             Semi-Annual
Name and Current Position                                   Bonus Amount
Keith Barnes, President and Chief Executive Officer       $         220,966
Robert Nikl, Chief Financial Officer                      $          88,427
Gayn Erickson, Vice President Memory Test                 $          42,921
Pascal Ronde, Vice President Sales, Service and Support   $          69,786
Kenneth Siegel, Vice President and General Counsel        $          57,311

Fiscal 2009 Executive Compensation

On December 3, 2008, Verigy's Compensation Committee approved executive compensation arrangements for fiscal 2009 for the chief executive officer and other executive officers of the company as part of their annual review process. The Compensation Committee did not make any changes to the base salary of any named executive officer. The Compensation Committee approved target bonus percentages and annual equity awards for the company's named executive officers, as follows:

                                                                                Aggregate
                                                         Target Bonus (as     Four-Tranche     Restricted
                                          Base              a % of Base       Stock Options      Shares
Name/Title of Executive             Compensation (1)     Compensation) (2)     Awarded (3)     Awarded (4)
Keith Barnes, President and
Chief Executive Officer             $         582,400                  100 %        250,000        100,000
Robert Nikl, Chief Financial
Officer                             $         335,000                   80 %        125,000         50,000
Gayn Erickson, Vice President,
Memory Test                         $         268,000                   60 %         35,000         14,000
Pascal Ronde, Vice President
Sales, Service and Support          $         362,009                   60 %         75,000         30,000
Kenneth Siegel, Vice President
and General Counsel                 $         278,000                   55 %         52,382         20,953

(2) Verigy's incentive compensation bonus program is designed to provide short-term incentive compensation based upon the achievement of operating profit goals and relative shareholder return. The program is administered in six-month performance periods that coincide with each half of Verigy's fiscal year and provides for cash bonuses to be paid semi-annually. The target bonus for each participant is equal to a stated percentage of the participant's base salary.

(3) The share numbers indicated are aggregate award levels for the executives. These awards were issued using the company's four-tranche option approach. For purposes of establishing the exercise price of the options, the option is divided into four tranches of 25% each. Except for awards granted to Pascal Ronde, the exercise price of the four tranches is determined as follows (1):

† The first tranche (25%) is priced at $9.20 per share, the closing price of the company's ordinary shares on December 3, 2008, the date of the award;

† The second tranche (25%) is priced at the fair market value (closing price) of the company's ordinary shares on the third business day following the public announcement of the company's financial results for the quarter ending January 31, 2009;

† The third tranche (25%) is priced at the fair market value (closing price) of the company's ordinary shares on the third business day following the public announcement of the company's financial results for the quarter ending April 30, 2009; and

† The fourth tranche (25%) is priced at the fair market value (closing price) of the company's ordinary shares on the third business day following the public announcement of the company's financial results for the quarter ending July 31, 2009.

In the case of Pascal Ronde, the first tranche will be priced at the earliest date allowable subsequent to November 26, 2008. Each of the remaining three tranches will be priced at the earliest date allowable subsequent to the release of the company's financial results for the quarters ending January 31, 2009, April 30, 2009 and July 31, 2009, in accordance with applicable French regulations regarding tax qualification for option grants. Generally, the pricing will occur on the 11th business day following the public announcement of the company's financial results, or on the 11th business day following a material announcement that occurs within that 11 day period. The option price will be the greater of (A) the fair market value (closing price) of the company's ordinary shares on the pricing date, or (B) 80% of the average of the fair market values (closing prices) for the twenty trading days preceding the pricing date.

(4) The restricted shares vest and are paid out quarterly over a four-year period from the grant date. Verigy has adopted an arrangement whereby the company deducts from the number of shares deliverable at each vesting date a number of shares with a fair market value equal to the employee's tax withholding obligation arising in connection with the vesting. The after-tax net shares are issued to the individual at each vesting event.