VERIGY LTD. 2006 EQUITY INCENTIVE PLAN NOTICE OF SHARE OPTION AWARD (THREE TRANCHE)

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

    VERIGY LTD.

TITLE:

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

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

This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan).

This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.

Notwithstanding the establishment of the pricing dates for the 2^nd and 3^rd tranches of the award as set forth in the Notice of Share Option Award, the exercise price of the 2^nd tranche and 3^rd tranches, if previously unpriced, shall be established in accordance with the following in the following circumstances:

Change of Control. In the event that prior to any pricing date the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defind in the Plan) of the Company, the per-share exercise price for each tranche of this option not already priced as of the date of such announcement, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding such announcement.

Termination of Employment. In the event that prior any pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for each tranche of this option not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding your last day of Service.

For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.

Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan.

If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.

You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify which tranche(s) of this option you are exercising.

If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

The text of the Plan is incorporated in this Agreement by reference.

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