DEF 14A 1 nc10020261x1_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒ Filed by a party other than the Registrant ☐

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☒	Definitive Proxy Statement

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☐	Soliciting Material under §240.14a-12

FormFactor, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Dear Fellow Stockholders,

All of us at FormFactor, together with the rest of the world, weathered an exceedingly challenging year in 2020. A global pandemic impacted our entire operations, heavy smoke from massive fires linked to the global climate crisis surrounded many of our facilities, and prevalent injustice afflicted our communities. As a result of these challenges, however, our company and its culture are stronger and more resilient today, with an even sharper focus on the opportunities ahead of us.

We are more conscious than ever of how our work facilitates critical infrastructure, essential businesses, and healthier communities by enabling key innovations and the volume production of devices for communications, computing and other vital applications. Last year and still today we have clearly witnessed the power of these technologies to keep us safe and fuel how we connect, work and learn. This heightened awareness helped motivate our employees to maintain the productivity, agility and creativity to achieve new records in revenue and profitability in 2020, including an 18% growth in revenue over the previous and also record-breaking year.

None of our successes in 2020 would have been possible without the continued support of FormFactor’s stockholders, and we express our sincere appreciation. We also convey our gratitude through our commitment to performance, integrity, and sustainability within a FormFactor culture of oversight, transparency, and accountability at every level. This includes our Board of Director’s and management’s continued focus upon our long-term strategic objectives:

•	Leadership in Core Markets: Increase market share in the advanced probe card market segment and in engineering systems, and leverage existing key roadmap technologies and investments across all markets.

•	Drive Profitability: Maintain and continuously improve efficiency by capitalizing on our leadership positions and economies of scale.

•	Enter and Develop in Adjacent Markets: Continue long-term diversification of revenue streams and customer mix through M&A and product extensions in semiconductor test and measurement.

COVID-19 Response. From the pandemic’s outset, our Board oversaw our COVID-19 response strategy, which focused on our actions to continue manufacturing while maintaining the safety of our employees to support our customers’ business continuity and critical infrastructure. We are proud of how well our employees supported our COVID-19 safety protocols and contributed to the efforts of local communities and healthcare providers.

Connecting with Stockholders. In the context of the pandemic and the uncertainty it created among investors, we enhanced our already robust investor relations program. We found that the adoption of virtual meeting formats actually helped us broaden our investor outreach as well. We maintained our strong existing relationships with semiconductor equipment sell-side analysts, which represents a rather broad coverage universe, and we attended substantially more virtual conferences and non-deal roadshows. In August, we also hosted an analyst day online at which we introduced our new target financial model based upon specific technology trends and market drivers.

Maintaining a Highly Qualified and Diverse Board. Our Board composition reflects an effective mix of industry knowledge, functional expertise, company experience, and diverse perspectives. We welcomed two new female members to our Board last year, and both delivered exemplary service to the company. In 2021, we will continue to pursue highly qualified and diverse board candidates as we move forward. The Board and its

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compensation committee continue to emphasize a strong pay-for-performance culture to remain solidly aligned with the interests of our stockholders. The Board also remains committed to regularly evaluating human capital management issues, including succession planning, talent development, employee engagement, and diversity and inclusion.

Sustainability and Corporate Responsibility. Our Board is committed to overseeing the integration of environmental and corporate social responsibility principles throughout FormFactor. We have increased the visibility of our dedication to corporate social responsibility through disclosures on our website regarding our internal Sustainable Leadership program, including the progress on our greenhouse gas (GHG) emissions goals and various other subjects with reference to global sustainability reporting standards.

Your vote is important. The agenda for our Annual Meeting of Stockholders is described in detail in the attached Notice of 2021 Annual Meeting of Stockholders and in the attached Proxy Statement. I strongly encourage you to attend online and participate. Whether or not you are able to attend the Annual Meeting, we urge you to vote your shares at your earliest convenience.

Thank you for your continued support and your participation in this year’s Annual Meeting of Stockholders.

Sincerely,

Michael D. Slessor

Chief Executive Officer

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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

When:	May 14, 2021 at 3:00 p.m., Pacific Daylight Time
Where:	The Annual Meeting will be a virtual meeting of stockholders, which will be conducted online via live webcast. Stockholders of record will be able to attend the Annual Meeting, submit questions, view the stockholder list, and vote online during the meeting by visiting www.virtualshareholdermeeting.com/FORM2021 and using the 16-digit control number included on their proxy card or Notice of Internet Availability. Beneficial owners should review the Proxy Statement as well as their voting instruction form or Notice of Internet Availability of Proxy Materials for how to vote in advance of and participate in the Annual Meeting. We believe a virtual meeting will enable expanded access and increased stockholder attendance and participation in light of the public health and travel concerns relating to COVID-19 and the related recommendations and protocols issued by federal, state and local governments.
Items of Business:	1.	Election of the two directors named in the Proxy Statement;
	2.	Advisory approval of the company’s executive compensation;
	3.	Ratification of the selection of KPMG LLP as FormFactor’s independent registered public accounting firm for fiscal year 2021; and
	4.	Action upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Who Can Vote:	Stockholders of FormFactor, Inc. Common Stock at the close of business on March 19, 2021. Your vote is important.
Record Date:	The record date for determining those stockholders of our company who will be entitled to notice of, and to vote at, the Annual Meeting, and at any adjournment or postponement thereof, is March 19, 2021.

Whether or not you are able to attend the Annual Meeting online, we urge you to vote your shares through the Internet in accordance with the instructions in the Notice of Internet Availability of Proxy Materials that you received in the mail, or by signing, dating and returning a proxy card or voting instruction form at your earliest convenience.

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the chair of the meeting will convene the meeting at 3:30 p.m. Pacific Daylight Time on the date specified above and at the Company’s address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the Investor Relations page of the company’s website at investors.formfactor.com.

By order of the Board of Directors,

Jason Cohen

Vice President, General Counsel and Secretary

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	INTERNET AVAILABILITY
	We are taking advantage of the Securities and Exchange Commission (the “SEC”) rules that allow companies to furnish proxy materials to their stockholders through the Internet. This Proxy Statement and our 2020 Annual Report on Form 10-K are available at http://proxyvote.com. We believe these rules allow us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. On or about March 31, 2021, we mailed to stockholders as of the record date a Notice of Internet Availability of Proxy Materials (the “Notice”). If you received a Notice by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. Instead, the Notice instructs you on how to access and review all the important information contained in this Proxy Statement and in our 2020 Annual Report on Form 10-K (which we posted on the Internet on the same date), as well as how to submit your proxy over the Internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you may request a printed copy of the proxy materials by following the instructions on the Notice. We will also provide, without charge, a copy of the 2020 Annual Report on Form 10-K, including the financial statements and the financial statement schedules, to any stockholder who submits a written request to us at our principal executive offices at FormFactor, Inc., Attn: General Counsel, 7005 Southfront Road, Livermore, CA 94551.

	CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
	Certain statements contained in this Proxy Statement and accompanying materials constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts are forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the company’s expectations or objectives regarding future financial and operational results, the company’s successful development and execution of strategic and operational plans and growth objectives, and the company’s achievement and execution of its corporate social responsibility objectives and standards, and other statements regarding the company’s business. Forward-looking statements also include statements regarding the company’s management, compensation or governance practices or policies that may indicate an intent or expectation to continue such practices in the future. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” and “continue,” the negative or plural of these words and similar expressions and include the assumptions that underlie such statements. Where forward-looking statements are expressions of an intent or expectation to continue any management or governance practices, such continuation is subject to future change or cessation except as may be otherwise required by law. The forward-looking statements included in this Proxy Statement and accompanying materials are based on our current beliefs and expectations and speak only as of the date hereof. These statements may also be based on standards for measuring progress that are still developing and on assumptions that are subject to change in the future. These statements are also aspirational and are not guarantees or indicators of future actions, targets or results. Important assumptions and other factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those risks, uncertainties and factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 26, 2020 and in our other filings with the SEC. We do not intend, and, except as required by law, we undertake no obligation, to update any of our forward-looking statements after the date of this Proxy Statement to reflect any future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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			Page
SUMMARY OF PROPOSALS			1

GENERAL INFORMATION			2

CORPORATE GOVERNANCE			8
Proposal No. 1 Election of Directors			8
Board of Directors			8
Board Leadership Structure			14
Annual Evaluation of CEO and Succession Planning			15
Board Assessment and Director Evaluation			15
Board’s Role in Risk Oversight			16
Corporate Governance Highlights			18
Corporate Governance Guidelines			19
Director Education			19
Stock Ownership Guidelines			20
Independence of Directors			20
Board Meetings			21
Committees of the Board of Directors			21
Director Compensation			23
Compensation Committee Interlocks and Insider Participation			25
Consideration of Director Nominees			25
Corporate Codes and Policies			26
Stockholder Communications with Our Board			26
Board Attendance at Annual Meetings			26
Stockholder Engagement			26
Corporate Social Responsibility			27

COMPENSATION MATTERS			28
Proposal No. 2 Advisory Approval of the Company’s Executive Compensation			28
Compensation Discussion and Analysis			30
Compensation Governance Practices			30
Compensation Framework			32
Peer Group			33
Compensation Decisions			34
Compensation Components			34
Stock Ownership Guidelines			38
Clawback Policy			38
Change of Control and Severance Benefits			38
Other Benefits and Perquisites			39
Tax Considerations			39
Equity Compensation Plans			39
Report of the Compensation Committee			41
Executive Compensation and Related Information			42
Executive Officers			42
Summary Compensation			42

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			Page
Grants of Plan-Based Awards in Fiscal Year 2020			43
Outstanding Equity Awards at Fiscal Year Ended December 26, 2020			44
Option Exercises and Stock Vested at Fiscal Year Ended December 26, 2020			45
Change of Control, Severance, Separation and Indemnification Agreements			45
CEO Pay Ratio			48

AUDIT MATTERS			49
Proposal No. 3 Ratification of Selection of Independent Registered Public Accounting Firm for Fiscal Year 2021			49
Principal Auditor Fees and Services			49
Pre-Approval of Audit and Non-Audit Services of Auditor			50
Report of the Audit Committee			51

ADDITIONAL INFORMATION			52
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			52
Beneficial Ownership of Our Securities			52
Certain Relationships and Related Person Transactions			54
Proposals for the 2022 Annual Meeting of Stockholders			55
Other Business			56
Annex A			A-1

The information in the Report of the Audit Committee and the Report of the Compensation Committee contained in this Proxy Statement shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically and expressly incorporate this information by reference into such filings. In addition, this information shall not otherwise be deemed to be “soliciting material” or to be filed under those Acts.

Please note that information on FormFactor’s website is provided for convenience only and is not incorporated by reference into this Proxy Statement.

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ABOUT FORMFACTOR

FormFactor, Inc., headquartered in Livermore, California, is a leading provider of semiconductor test and measurement technologies. We provide a broad range of high-performance probe cards, analytical probes, probe stations, metrology systems, and thermal subsystems to both semiconductor companies and scientific institutions. Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from research, through development to production. Customers use our products and services to lower production costs, improve yields, and enable development of their complex next generation products.

SUMMARY OF PROPOSALS

Below is a summary of the matters to be voted upon at our 2021 Annual Meeting of Stockholders. For more information about these items, please review FormFactor’s complete Proxy Statement and its Annual Report on Form 10-K for the year ended December 26, 2020.

PROPOSAL	DESCRIPTION	BOARD RECOMMENDATION
Proposal 1: Election of Directors (page 8)	We are asking our stockholders to elect two Class III directors. We recommend voting in favor of the nominees named in this Proxy Statement.	✔ FOR each nominee
Proposal 2: Advisory approval of the company’s executive compensation (page 28)	We are asking our stockholders to cast a non-binding advisory vote regarding the compensation of our named executive officers. We recommend that you review the “Compensation Discussion and Analysis” section in this Proxy Statement for additional details on FormFactor’s executive compensation.	✔ FOR
Proposal 3: Ratification of the selection of KPMG LLP as the company’s independent registered public accounting firm for fiscal year 2021 (page 49)	We are asking our stockholders to ratify our Audit Committee’s selection of KPMG LLP as our independent registered public accounting firm.	✔ FOR

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PROXY STATEMENT

FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

GENERAL INFORMATION

QUESTIONS AND ANSWERS REGARDING PROXY MATERIALS

Q:	Why am I receiving FormFactor’s proxy materials?

Our Board of Directors has made FormFactor’s proxy materials available to you on the Internet on or about March 31, 2021 or, upon your request, has delivered a printed set of the proxy materials to you by mail in connection with the solicitation of proxies by our Board for our 2021 Annual Meeting of Stockholders. FormFactor’s proxy materials are available on the Internet at http://proxyvote.com. We will hold the Annual Meeting on Friday, May 14, 2021, at 3:00 p.m., Pacific Daylight Time. The Annual Meeting will be a virtual meeting of stockholders, which will be conducted online via live webcast.

We believe a virtual meeting will enable expanded access and increased stockholder attendance and participation in light of the public health and travel concerns relating to COVID-19 and the related recommendations and protocols issued by federal, state and local governments. Our intention is to resume holding in-person meetings under normal circumstances.

Q:	What is included in the proxy materials?

The proxy materials include our company’s Notice of 2021 Annual Meeting of Stockholders, Proxy Statement and the 2020 Annual Report on Form 10-K, which includes our audited consolidated financial statements. If you requested a printed set of the proxy materials by mail, the proxy materials also included a proxy card for the Annual Meeting.

Q:	Why did I receive a notice in the mail regarding the Internet availability of the proxy materials?

We mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders of record and beneficial owners of our common stock on or about March 31, 2021 to notify you that you can access the proxy materials over the Internet. Instructions for accessing the proxy materials through the Internet are set forth in the Notice. As we did last year for our 2020 Annual Meeting of Stockholders, we sent the Notice instead of mailing a printed set of the proxy materials in accordance with the “Notice and Access” rules adopted by the U.S. Securities and Exchange Commission. If you wish to receive a printed set of the proxy materials, please follow the instructions set forth on the Notice.

Q:	How can I get electronic access to the proxy materials?

A:	The Notice contains instructions on how to review our company’s proxy materials on the Internet and instruct us to send future proxy materials to you by e-mail. Your election to receive future proxy materials by e-mail will remain in effect until you terminate it in writing.

Q:	What is “householding” and how does it affect me?

The proxy rules of the U.S. Securities and Exchange Commission permit companies and intermediaries, such as brokers and banks, to satisfy proxy statement delivery requirements for two or more stockholders sharing an address by delivering one proxy statement to those stockholders. This procedure, known as “householding,” reduces the amount of duplicate information that stockholders receive and lowers our printing and mailing costs.

Only one Notice may have been delivered to your address if multiple stockholders share that address unless we have received contrary instructions from you. Stockholders who wish to opt out of this procedure and receive separate copies of the Notice in the future, or stockholders who are receiving

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multiple copies and would like to receive only one copy, should contact their bank, broker or other nominee or us at the address, e-mail address or phone number below.

We will promptly send a separate copy of the Notice for the 2021 Annual Meeting if you send your request by mail to our Corporate Secretary at FormFactor, Inc., 7005 Southfront Road, Livermore, California 94551, by e-mail at corporatesecretary@formfactor.com or by phone at (925) 290-4000.

QUESTIONS AND ANSWERS REGARDING THE ANNUAL MEETING

Q:	Where will the Annual Meeting be held?

We will hold the Annual Meeting entirely online via live webcast on Friday, May 14, 2021, at 3:00 p.m., Pacific Daylight Time. You will not be able to physically attend the Annual Meeting. The webcast will begin promptly at 3:00 p.m. You are encouraged to access the Annual Meeting early and provide sufficient time for online check-in, which will begin 15 minutes before the Annual Meeting commences. Technical assistance will be available to assist with any difficulties encountered while accessing the Annual Meeting beginning 30 minutes prior to the meeting through the end of the meeting.

A replay of the Annual Meeting will be made available on our Investor Relations page of our website until the next Annual Meeting.

Stockholders may submit questions during the Annual Meeting at www.virtualshareholdermeeting.com/FORM2021. The company will try to answer as many questions as possible during the time scheduled. Additional information regarding the question and answer process, including the types and number of questions permitted, the time allotted for the question and answer session, and how questions will be addressed and disclosed, will be available in the Annual Meeting rules of conduct, which will be posted at the virtual Annual Meeting website during the Annual Meeting.

Q:	What specific proposals will be considered and acted upon at FormFactor’s 2021 Annual Meeting?

A:	The specific proposals to be considered and acted upon at the Annual Meeting are:

Proposal No. 1—Election of two Class III directors to our Board of Directors, each to serve on our Board for a term of three years or until a successor has been elected and qualified or until their earlier death, resignation or removal. The Class III director nominees are Rebeca Obregon-Jimenez and Kelley Steven-Waiss;

Proposal No. 2—Advisory approval of the company’s executive compensation; and

Proposal No. 3—Ratification of the selection of KPMG LLP as our independent registered public accounting firm for fiscal year 2021.

We will also consider any other matters that are properly presented for a vote at the Annual Meeting. As of March 31, 2021, we are not aware of any other matters to be submitted for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the enclosed proxy card or voting instruction form will vote the shares they represent using their best judgment.

Q:	What do I need to do to attend the Annual Meeting?

Stockholders of record as of the close of business on March 19, 2021 will be able to attend the Annual Meeting, submit questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/FORM2021 and using the 16-digit control number provided on their Notice or proxy card and following the instructions on the website. If your shares are held in street name and your voting instruction form or Notice indicates that you may vote those shares through the http://proxyvote.com website, then you may access, participate in, and vote at the Annual Meeting with the

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16-digit access code indicated on that voting instruction form or Notice. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting.

QUESTIONS AND ANSWERS REGARDING VOTING AND ANY PROXY SOLICITATION

Q:	Who can vote at the Annual Meeting?

Only stockholders of record of our common stock at the close of business on March 19, 2021, which is the record date, are entitled to notice of, and to vote at, the Annual Meeting. If you own shares of FormFactor common stock as of the record date, then you can vote at the Annual Meeting. At the close of business on the record date, we had 77,758,530 shares of our common stock outstanding and entitled to vote, which were held by 136 stockholders of record.

Q:	How many votes am I entitled per share of common stock?

A:	Holders of our common stock are entitled to one vote for each share held as of the record date.

Q:	What is the difference between holding FormFactor shares as a stockholder of record and a beneficial owner?

Most of our stockholders hold their shares of our common stock as a beneficial owner through a broker, bank or other nominee in “street name” rather than directly in their own name. As summarized below, there are some important distinctions between shares held of record and those owned beneficially in “street name.”

Stockholder of Record: If your shares of our common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and we delivered the Notice or proxy card directly to you. As the stockholder of record, you have the right to vote your shares online or by proxy at the Annual Meeting.

Beneficial Owner: If your shares of our common stock are held in an account with a broker, bank or other nominee, you are considered the beneficial owner of those shares held in “street name,” and the broker, bank or other nominee holding your shares on your behalf delivered the Notice or a voting instruction form to you. The nominee holding your shares is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares being held by them.

Q:	If I am a stockholder of record of FormFactor shares, how do I vote?

A:	Voting by Internet Before the Annual Meeting. You can vote through the Internet before the Annual Meeting by following the instructions provided in the Notice that you received. Go to http://proxyvote.com, follow the instructions on the screen to log in, make your selections as instructed and vote.

Voting by Mail Before the Annual Meeting. You can vote by mail before the Annual Meeting by requesting a printed set of the proxy materials, which will contain a proxy card, and then completing, dating, signing and returning the proxy card in the postage-paid envelope (to which no postage need be affixed if mailed in the United States) accompanying the proxy card.

Voting at the Annual Meeting. If you plan to attend and vote online at the Annual Meeting, you may vote by following the instructions provided on the proxy card or Notice to log in to www.virtualshareholdermeeting.com/FORM2021. Even if you plan to attend the Annual Meeting online, we encourage you also to vote by Internet or mail as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.

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Q:	If I am a beneficial owner of shares held in “street name,” how do I vote?

A:	Voting by Internet Before the Annual Meeting. You can vote over the Internet before the Annual Meeting by following the voting instruction form or Notice provided to you by your broker, bank or other nominee.

Voting by Mail Before the Annual Meeting. You can vote by mail by requesting a printed set of the proxy materials, which will contain a voting instruction form, and by completing, dating, signing and returning the voting instruction form in the postage-paid envelope (to which no postage need be affixed if mailed in the United States) accompanying the voting instruction form.

Voting at the Annual Meeting. If you plan to attend and vote online at the Annual Meeting, and your voting instruction form or Notice indicates that you may vote those shares through the http://proxyvote.com website, then you may access, participate in, and vote at the Annual Meeting with the 16-digit access code indicated on that voting instruction form or Notice. Otherwise, contact your broker, bank or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you also vote by Internet or mail as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.

Q:	What if I submit a proxy but I do not give specific voting instructions?

Stockholder of Record: If you are a stockholder of record of shares of our common stock, and if you indicate when voting through the Internet that you wish to vote as recommended by our Board of Directors, or if you sign and return a proxy without giving specific voting instructions, then the proxy holders designated by our Board, who are officers of our company, will vote your shares FOR the Class III nominees for director, FOR the advisory approval of the company’s executive compensation, and FOR the ratification of the selection of KPMG LLP as our independent registered public accounting firm for fiscal year 2021, all as recommended by our Board of Directors and as presented in this Proxy Statement.

Beneficial Owner: If you are a beneficial owner of shares of our common stock held in “street name” and do not present the broker, bank or other nominee that holds your shares with specific voting instructions, then the nominee may generally vote your shares on “routine” proposals but cannot vote on your behalf for “non-routine” proposals under the rules of various securities exchanges. If you do not provide specific voting instructions to the nominee that holds your shares with respect to a non-routine proposal, the nominee will not have the authority to vote your shares on that proposal. When a broker indicates on a proxy that it does not have authority to vote shares on a particular proposal, the missing votes are referred to as “broker non-votes.”

Q:	Which ballot measures are considered “routine” or “non-routine”?

The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2021 (Proposal No. 3) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal No. 3. The election of directors (Proposal No. 1) and the advisory approval of the company’s executive compensation (Proposal No. 2) are matters considered non-routine under applicable rules. A bank, broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposal Nos. 1 and 2.

Q:	What is the quorum requirement for the Annual Meeting?

A quorum is required for our stockholders to conduct business at the Annual Meeting. A majority of the shares of our common stock entitled to vote must be present online or represented by proxy at the Annual Meeting in order to hold the meeting and conduct business. We will count your shares for purposes of

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determining whether there is a quorum if you are present online at the Annual Meeting, if you have voted through the Internet, if you have voted by properly submitting a proxy card, or if the nominee holding your shares submits a proxy card. We will also count broker non-votes for the purpose of determining if there is a quorum.

Q:	What is the voting requirement to approve each of the proposals?

For Proposal No. 1, each of the two Class III directors will be elected if holders of shares of our common stock entitled to vote who are present online or represented by proxy at the Annual Meeting cast more votes “for” such nominee’s election than the votes “against” such nominee’s election. You may not cumulate votes in the election of directors. If a nominee for director is not elected, the director shall offer to tender his or her resignation to the Board of Directors. The Governance and Nominating Committee will make a recommendation to the Board of Directors to accept or reject the resignation or whether other action should be taken. The Board of Directors will act on the Governance and Nominating Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The director who has so tendered his or her resignation will not participate in the Board of Directors’ decision.

Approval of Proposal No. 2 requires the affirmative vote of a majority of the votes cast by the holders of shares of our common stock entitled to vote that are present online or represented by proxy at the Annual Meeting.

Approval of Proposal No. 3 requires the affirmative vote of a majority of the votes cast by the holders of shares of our common stock entitled to vote that are present online or represented by proxy at the Annual Meeting.

The effectiveness of any of the proposals is not conditioned upon the approval by our stockholders of any other proposal by our stockholders.

Q:	How are abstentions treated?

A:	Abstentions are counted for the purposes of determining whether a quorum is present at the Annual Meeting. Abstentions will not be counted either in favor of or against any of the proposals.

Q:	Can I change my vote or revoke my proxy after I have voted?

You may change your vote or revoke your proxy at any time before the final vote at the Annual Meeting: (a) through the Internet before the Annual Meeting at http://proxyvote.com (only your latest Internet proxy submitted prior to the Annual Meeting will be counted), (b) by signing and returning a new proxy card with a later date if you are a stockholder of record, or (c) by attending the Annual Meeting and voting online at www.virtualshareholdermeeting.com/FORM2021 if you are a stockholder of record, or if you are a beneficial owner and have received a control number in your Notice, or if you are a beneficial owner and have obtained a proxy from the nominee holding your shares giving you the right to vote your shares. Your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request in writing that your prior proxy be revoked.

Q:	What happens if there are insufficient votes in favor of the proposals?

In the event that sufficient votes in favor of the proposals are not received by the date of the Annual Meeting, the proxy holders, who are officers of our company, may propose one or more adjournments of the Annual Meeting to permit further solicitations of proxies. Any such adjournment would require the affirmative vote of holders of the majority of the shares of common stock present online or represented by proxy at the Annual Meeting.

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Q:	What happens if additional matters are presented at the Annual Meeting?

We are not aware of any other matters to be presented for a vote at the Annual Meeting. If you grant a proxy, the proxy holders, who are officers of our company, will have the authority in their discretion to vote your shares on any other matters that are properly presented for a vote at the Annual Meeting. If for any reason any of the Class III nominees are not available as a candidate for director, the proxy holders will vote your proxy for such other candidate or candidates as may be recommended by our Board of Directors.

Q:	Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within our company or to third parties, except (a) as necessary to meet applicable legal requirements, (b) to allow for the tabulation and certification of votes, and (c) to facilitate a successful proxy solicitation. If stockholders provide written comments on their proxy cards, we may forward the proxy card(s) to our company’s Corporate Secretary.

Q:	Who is making the solicitation?

A:	We are soliciting the enclosed proxy for use at our Annual Meeting to be held on May 14, 2021 at 3:00 p.m., Pacific Daylight Time or at any postponement or adjournment thereof for the purposes set forth in this Proxy Statement.

Q:	Who is paying for the cost of this proxy solicitation?

We will pay the entire cost for soliciting proxies to be voted at the Annual Meeting. We will pay brokers, banks and other nominees representing beneficial owners of shares of our common stock held in “street name” certain fees associated with delivering the Notice of Internet Availability of Proxy Materials, delivering printed proxy materials by mail to beneficial owners who request them and obtaining beneficial owners’ voting instructions. In addition, our directors, officers and employees may also solicit proxies on our behalf by mail, telephone, online or in person. We will not pay any compensation to our directors, officers and employees for their proxy solicitation efforts, but we may reimburse them for reasonable out-of-pocket expenses in connection with any solicitation.

QUESTIONS AND ANSWERS REGARDING THE VOTING RECOMMENDATIONS OF FORMFACTOR’S BOARD OF DIRECTORS AND VOTING RESULTS

Q:	What are the voting recommendations of our Board of Directors?

A:	Our Board of Directors recommends a vote FOR each of the nominees in Proposal No. 1 and FOR Proposal Nos. 2 and 3. Specifically, our Board recommends a vote:

FOR the election to our Board of Directors of Rebeca Obregon-Jimenez and Kelley Steven-Waiss as Class III directors;

FOR the advisory approval of the company’s executive compensation; and

FOR the ratification of the selection of KPMG LLP as our independent registered public accounting firm for fiscal year 2021.

Q:	Where can I find the voting results of the Annual Meeting?

A:	We intend to announce the voting results at the Annual Meeting and to report the results on a Form 8-K that we file with the U.S. Securities and Exchange Commission within four business days of the Annual Meeting.

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CORPORATE GOVERNANCE

PROPOSAL NO. 1—ELECTION OF DIRECTORS

The first proposal is to elect two Class III directors to our Board of Directors.

The Class III nominees are Rebeca Obregon-Jimenez and Kelley Steven-Waiss, who are both current directors of FormFactor. Rebeca Obregon-Jimenez was previously elected by stockholders at the 2020 Annual Meeting of Stockholders, and Kelley Steven-Waiss was previously elected by stockholders at the 2019 Annual Meeting of Stockholders.

Both Class III nominees have been duly nominated by our Board of Directors and have agreed to stand for election.

The proxy holders intend to vote all proxies received for the election of Mses. Rebeca Obregon-Jimenez and Kelley Steven-Waiss unless otherwise instructed. Proxies may not be voted for more than two directors.

In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies may be voted for a nominee designated by our Board of Directors to fill the vacancy. As of the date of this Proxy Statement, our Board of Directors is not aware that any nominee is unable or will decline to serve as a director of our company.

Our Board of Directors recommends a vote FOR the election to our Board of Directors of Rebeca Obregon-Jimenez and Kelley Steven-Waiss as Class III directors.

Board of Directors

Our Board of Directors currently consists of eight members and is divided into three classes, which we have designated as Classes I, II and III. Each director is elected for a three-year term of office, with one class of directors being elected at each annual meeting of stockholders. The Class III directors will be elected at this year’s Annual Meeting. The term of the Class I directors expires at our 2022 Annual Meeting of Stockholders, and the term of the Class II directors expires at our 2023 Annual Meeting of Stockholders. Each director holds office until their successor is duly elected and qualified or until their earlier death, resignation or removal. Sheri Rhodes, Raymond A. Link, Michael D. Slessor, and Thomas St. Dennis were previously elected by stockholders at the 2020 Annual Meeting of Stockholders, and Lothar Maier was previously elected by stockholders at the 2019 Annual Meeting of Stockholders.

Edward Rogas, Jr. is not standing for re-election. Accordingly, the Board has voted to reduce its size from eight to seven directors effective immediately following the expiration of Mr. Rogas’ term at the Annual Meeting. The Board thanks Mr. Rogas for his service and contributions. In connection with Mr. Rogas’ departure, the Board moved Kelley Steven-Waiss from Class I to Class III in March 2021.

Based upon the Board’s assessment of the continued and anticipated growth of the company and broad-based trends in corporate governance, our Board intends to remove the classified structure of our Board from our amended and restated certificate of incorporation and submit for stockholder approval related amendments to the certificate of incorporation at the 2022 annual meeting of stockholders. Under such amendments, beginning with the election of directors at our 2022 annual meeting of stockholders, all elections of directors starting in 2022 would be only for a one-year term.

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Information regarding our director nominees and our other current directors as of the record date of this Proxy Statement, including their names and positions with our company, is set forth below.

Mr. Raymond A. Link⁽¹⁾⁽³⁾

Director

June 2016

Mr. Lothar Maier⁽¹⁾⁽³⁾

Director

November 2006

Ms. Rebeca Obregon-Jimenez*⁽²⁾

III

Director

September 2019

Ms. Sheri Rhodes⁽³⁾

Director

December 2019

Mr. Edward Rogas, Jr.⁽²⁾

III

Director

October 2010

Dr. Michael D. Slessor

Director and Chief Executive Officer

October 2013

Ms. Kelley Steven-Waiss*⁽¹⁾⁽²⁾

III

Director

August 2015

Mr. Thomas St. Dennis

Director and Chairperson

September 2010

*	Current nominee for election.

(1)	Current member of the Governance and Nominating Committee.

(2)	Current member of the Compensation Committee.

(3)	Current member of the Audit Committee.

Based upon the information and discussion of qualifications and experience described in this Proxy Statement, the Board of Directors as a whole, and the Governance and Nominating Committee, has determined that each of the nominees, and our continuing directors, are qualified to serve as a director of the company.

The following will represent the percentage composition of our Board of Directors after the Annual Meeting if stockholders approve the proposed elections of directors.

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Raymond A. Link

Raymond A. Link has served as a director since June 2016. Mr. Link is currently a Lecturer at the University of California, Santa Barbara, on finance and accounting subjects in the Technology Management program. Mr. Link was a director of Cascade Microtech from February 2005 through June 2016. Mr. Link has served on the Board of Directors of nLight Inc., a manufacturer of high-power semiconductor lasers, since December 2010. Mr. Link served on the Board of Directors of Electro-Scientific Industries, a supplier of laser-based solutions for the microelectronics industry, from August 2015 through February 2019. From July 2005 to April 2015, Mr. Link served as Executive Vice President and Chief Financial Officer of FEI Company, a leading supplier of scientific and analytical instruments for nanoscale imaging. Prior to this, Mr. Link was the Chief Financial Officer of TriQuint Semiconductor, Inc., a manufacturer of electronic signal processing components for wireless communications from July 2001 to June 2005. Mr. Link received an M.B.A. from the Wharton School at the University of Pennsylvania and a B.S. degree from the State University of New York at Buffalo. Mr. Link is a licensed Certified Public Accountant and a fellow with the National Association of Corporate Directors.

Mr. Link is a source of continuity and oversight, and provides extensive knowledge of our company, including from his previous service as a board member of Cascade Microtech, which we acquired in 2016. Mr. Link is a licensed Certified Public Accountant and has over 35 years of sophisticated management experience. Mr. Link also has extensive background in our industry, and a broad base of financial reporting and corporate governance expertise. In addition, Mr. Link provides our Board with extensive public company board experience. The Board has determined that Mr. Link is an audit committee financial expert as defined under the regulations of the Securities and Exchange Commission and meets the financial sophistication requirements of the Nasdaq’s listing standards. Mr. Link’s top three skills identified in our Board skills assessment are Financial and Risk Management, Mergers & Acquisitions, and Board Practices of Public Companies.

Lothar Maier

Lothar Maier has served as a director since November 2006. Mr. Maier served as the Chief Executive Officer and a member of the board of directors of Linear Technology Corporation, a supplier of high performance analog integrated circuits, from January 2005 to March 2017. Prior to that, Mr. Maier served as Linear Technology’s Chief Operating Officer from April 1999 to December 2004. Before joining Linear Technology, Mr. Maier held various management positions at Cypress Semiconductor Corporation, a provider of high-performance, mixed-signal, programmable solutions, from July 1983 to March 1999, most recently as Senior Vice President and Executive Vice President of Worldwide Operations. Mr. Maier holds a B.S. in chemical engineering from the University of California at Berkeley.

Mr. Maier brings to our Board significant semiconductor industry and leadership experience as the former Chief Executive Officer and a former member of the board of directors of Linear Technology Corporation. Mr. Maier has considerable experience in semiconductor chip manufacturing, including a strong understanding of the drivers of customer demand for our products. Mr. Maier also provides expertise in financial accounting and reporting for publicly held companies as a result of his public company executive experience. The Board has determined that Mr. Maier meets the financial sophistication requirements of the Nasdaq’s listing standards. Mr. Maier’s top three skills identified in our Board skills assessment are Manufacturing Operations, Board Practices of Public Companies, and Engineering & Product Development.

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Rebeca Obregon-Jimenez

Rebeca Obregon-Jimenez has served as a director since September 2019. Ms. Obregon-Jimenez currently serves as Corporate Vice President of the Advanced System in Package Business Unit for Amkor Technology, Inc., one of the world’s largest providers of outsourced semiconductor packaging and test services. From August 2014 to January 2020, Ms. Obregon-Jimenez served as Corporate Vice President of Sales, and as a Senior Vice President in sales, strategic program management, and in operations finance at Amkor Technology, Inc. From May 1999 to August 2014, Ms. Obregon-Jimenez held executive and senior management positions at Integrated Device Technology, Inc., and Integrated Circuit Systems, Inc., in test operations, test engineering and product engineering. From June 1990 to May 1999, she served in the Semiconductor Products Sector of Motorola, Inc., where she held roles of increasing responsibility in a variety of engineering positions. Ms. Obregon-Jimenez earned her M.S. in electrical engineering from the National Technological University and her B.S. in electrical engineering from Arizona State University.

Ms. Obregon-Jimenez brings to our Board strong executive and operational experience from within the semiconductor industry, particularly within the semiconductor manufacturing and semiconductor test sectors, including an extensive understanding of the drivers of customer demand for our products from her experience as Corporate Vice President of the Advanced System in Package Business Unit for Amkor Technology, Inc. and other positions. Ms. Obregon-Jimenez’s top three skills identified in our Board skills assessment are Leadership and Senior Management, Sales & Marketing, and Engineering & Product Development.

Sheri Rhodes

Sheri Rhodes has served as a director since December 2019. Since April 2019, Ms. Rhodes has served as the Chief Information Officer overseeing the global information technology organization at Workday, Inc., a leading provider of enterprise cloud applications for finance, human resources, and planning. Prior to joining Workday, Ms. Rhodes served as Chief Technology Officer at Western Union Company, a worldwide financial services and communications company, from May 2017 to April 2019. Ms. Rhodes served as the Chief Information Officer at Electronics for Imaging, Inc., a digital imaging technology company, from December 2015 to May 2017. Ms. Rhodes also held roles of increasing responsibility at Symantec Corporation, from December 2009 to December 2015, including as Vice President of Global Applications from 2012 to 2015. Ms. Rhodes held management positions at Providian Financial Corporation and its successor Washington Mutual, Inc., from 1999 to 2008, including as a First Vice President from 2005 to 2008. From 1990 to 1999, Ms. Rhodes held management positions at KPMG US LLP, and Wells Fargo & Company. Ms. Rhodes earned an M.B.A. and a B.S. in Business Administration from San Diego State University.

Ms. Rhodes brings to our Board extensive executive-level management expertise in technology companies, as well as a deep understanding of complex global organizations and information technology management. Ms. Rhodes also brings to our Board a broad base of financial reporting and corporate governance expertise. The Board has determined that Ms. Rhodes meets the financial sophistication requirements of the Nasdaq’s listing standards. Ms. Rhodes’ top three skills identified in our Board skills assessment are Information Technology & Cybersecurity, Engineering & Product Development, and Mergers & Acquisitions.

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Michael D. Slessor

Michael D. Slessor has served as a director since October 2013. Dr. Slessor became our Chief Executive Officer on December 28, 2014. Dr. Slessor served as our President from October 2013 to December 2014, and as Senior Vice President and General Manager, MicroProbe Product Group from October 2012 to October 2013. Before joining FormFactor, Dr. Slessor was President and Chief Executive Officer of MicroProbe Incorporated from July 2008 through the October 2012 closing of FormFactor’s acquisition of MicroProbe. Prior to joining MicroProbe, he held various management, product-marketing, and applications-engineering positions in the semiconductor industry, primarily with KLA-Tencor. Dr. Slessor received his Ph.D. in Aeronautics and Physics from the California Institute of Technology and holds a B.A.Sc. in Engineering Physics from the University of British Columbia.

Dr. Slessor provides extensive knowledge and experience in the semiconductor equipment industry, particularly within the semiconductor equipment manufacturing and semiconductor test sectors. Dr. Slessor also provides the Board with vision and insight from his years of service as the company’s Chief Executive Officer, and from his service as the former President and Chief Executive Officer of MicroProbe. Dr. Slessor’s top three skills identified in our Board skills assessment are Engineering & Product Development, Human Capital Management, and Mergers & Acquisitions.

Kelley Steven-Waiss

Kelley Steven-Waiss has served as a director since August 2015. Ms. Steven-Waiss has been the Founder and Chief Executive Officer of Hitch Works Inc., a SaaS-based enterprise talent mobility platform, since July 2020. Prior to that, Ms. Steven-Waiss served as the EVP, Chief Innovation Officer from February 2020 to July 2020 and EVP, Chief Human Resources Officer from April 2016 to February 2020, at HERE Technologies Global B.V., a software location intelligence company. She previously served as the Executive Vice President and Chief Human Resources Officer of Extreme Networks, Inc., a software and services-led networking solutions company, from March 2014 to March 2016. Ms. Steven-Waiss also served as the Vice President of Worldwide Human Resources for Integrated Device Technology, Inc., a provider of semiconductor products, from 2009 through 2012, and prior to that, as the Vice President of Worldwide Human Resources for PMC-Sierra, Inc., a fabless semiconductor company. Ms. Steven-Waiss also serves as the Chair of the Advisory Board for the Silicon Valley Education Foundation. Ms. Steven-Waiss earned her M.A. in human resources and organization development from the University of San Francisco and a B.A. in journalism from the University of Arizona.

Ms. Steven-Waiss brings to the Board years of executive-level management expertise in technology companies, as well as a deep understanding of complex global organizations and human capital management. Ms. Steven-Waiss has substantial leadership experience from her roles as the Founder and Chief Executive Officer of Hitch Works Inc., Chief Human Resources Officer of HERE Technologies Global B.V., and her previous executive roles, including as a chief human resources officer and other executive human resources positions at public technology companies. Ms. Steven-Waiss’s top three skills identified in our Board skills assessment are Human Capital Management, Sales & Marketing, and International Business Operations.

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Thomas St. Dennis

Thomas St. Dennis has served as a director since September 2010. Mr. St. Dennis served as our Executive Chairperson of the Board of Directors from October 23, 2013 until February 2016, after which he has served as the Chairperson of the Board of Directors. Mr. St. Dennis served as our Chief Executive Officer from September 2010 through December 2014. Mr. St. Dennis has served as a director of Axcelis Technologies, Inc., a semiconductor company, since May 2015. Mr. St. Dennis has served as a director of Veeco Instruments Inc. since May 2016, including as a member of the Compensation Committee. Mr. St. Dennis also served on the board of directors of Mattson Technology, Inc., a semiconductor manufacturing company, from September 2013 to May 2016. Mr. St. Dennis previously held various positions at Applied Materials, Inc. from 1992 to 1999 and again from 2005 to 2009, most recently as its Senior Vice President and General Manager of the Silicon Systems Group. He also served at Novellus Systems, Inc. as Executive Vice President of Sales and Marketing from 2003 to 2005. From 1999 to 2003 Mr. St. Dennis was President and Chief Executive Officer of Wind River Systems, Inc. Mr. St. Dennis holds an M.S. in Physics and a B.S. in Physics from the University of California, Los Angeles.

Mr. St. Dennis provides extensive semiconductor industry and leadership experience as the past Chief Executive Officer of the company, as well as from having served as Senior Vice President and General Manager of the Silicon Systems Group at Applied Materials, and as the President and Chief Executive Officer of Wind River Systems, Inc. He maintains a valuable network of customer and industry relationships, and vital perspectives on corporate governance from his service on several public company boards. Mr. St. Dennis’s top three skills identified in our Board skills assessment are Sales & Marketing, Board Practices of Public Companies, and International Business Operations.

All Board members and nominees are expected to fully participate in Board activities, including preparation for, attendance at and active participation in meetings of our Board of Directors, and to have a high degree of personal integrity and interpersonal skills. Each is also expected to represent the best interests of all of our stockholders.

We have determined that Messrs. Link, Maier, St. Dennis, and Rogas, and Mses. Steven-Waiss, Obregon-Jimenez and Rhodes are currently independent directors under applicable Nasdaq Stock Market and SEC rules. Our Chief Executive Officer, Dr. Slessor, is a member of our Board and is not independent. There are no family relationships among any of the director nominees, directors or any of our executive officers. In addition, no nominee has an arrangement or understanding with another person under which he or she was or is to be selected as a director or nominee.

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Summary of Board Skills

The Governance and Nominating Committee conducts a Board skills assessment annually in order to evaluate the expertise of the Board, and to provide focus for Board development and education activities. This process has required a ranking of Board member skills based upon their level of qualifications and experience so that each director could only have one specified skill at expert level and only two skills specified as highly experienced. Other listed skills were specified for each Board member as representing established qualifications in addition to their top three ranked skills, which are identified in the director biographies above for each director. The resulting skills matrix is reviewed at a meeting of the Governance and Nominating Committee with all directors present. For each of the following skills, our Board includes members who identified as experts or as highly experienced.

	Leadership and Senior Management Directors who have served in senior leadership roles understand strategy and risk management and have the experience and perspective to evaluate and oversee the execution of operational and policy issues.			International Business Operations Experience in a variety of geographic, political, economic, and cultural environments outside of the U.S. is important in understanding and overseeing our global business and strategies.
	Board Practices of Public Companies Depth of experience in public companies and boards provides insight on existing and emerging trends and issues important to maintaining excellent board performance.			Financial and Risk Management Directors with an outstanding background in complex financial and accounting matters supports effective capital management, and oversight of financial reporting and internal controls.
	Sales & Marketing Expertise in sales and marketing, with knowledge of customer relationships and demands, enables Board-level guidance to oversee and enable important customer-related strategies and market dynamics.			Information Technology & Cybersecurity Extensive skills in information systems and network security is important to assessing and guiding our continuous investments in information technologies and infrastructure.
	Manufacturing Operations Knowledge of the unique challenges presented in developing and operating manufacturing technologies and volume production capabilities with precision and efficiency is highly valued in the oversight of our operations and strategies.			Human Capital Management Managing talent is key to supporting our continued success, and directors with human resources and human capital management expertise also bring important guidance to our talent acquisition and succession planning.
	Engineering & Product Development Directors with experience in engineering and developing new products and technologies provide critical perspectives for the oversight of our R&D projects and investments to address rapidly changing customer technology requirements.			Mergers & Acquisitions Directors with experience in providing timely and objective financial and commercial analyses of prospective mergers and acquisitions provide significant advantages, including in the structuring transactions and the integration of businesses.

Board Leadership Structure

Our Corporate Governance Guidelines state our policy that the positions of Chairperson of the Board of Directors and Chief Executive Officer are to be held by separate persons. The roles of Chief Executive Officer and Chairperson have remained continuously separate since 2015. Under our Corporate Governance Guidelines, when our Chairperson is an independent director, as is presently the case, the Chairperson also acts as our lead independent director, responsible for coordinating the activities of the other independent directors. The Board believes this structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.

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Annual Evaluation of CEO and Succession Planning

At each quarterly meeting of the Board, the CEO reports to the Board regarding achievement of previously established goals and objectives. The annual evaluation of the CEO begins with a self-evaluation by the CEO presented to the non-management directors. The non-management directors then meet separately in executive session annually to conduct a formal evaluation of the CEO. This evaluation is then communicated to the CEO by the Chairman. The evaluation is based on both objective and subjective criteria, including, but not limited to: the company’s financial performance; accomplishment of ongoing initiatives in furtherance of the company’s long-term strategic objectives; and development of the company’s top management team. The results of the evaluation are considered by the Compensation Committee in its deliberations when determining the compensation of the CEO as further described under “Executive Compensation and Related Information” below.

One of the key responsibilities of our Board is to oversee that the Company has a high-performing management team in place. Our full Board has responsibility for management succession planning, with specific responsibilities also delegated to the Compensation Committee and the Governance and Nominating Committee. The Board manages a succession planning process and, on an annual basis, reviews succession plans for the CEO and other senior executives. This process is designed to identify the pool of qualified internal candidates who can assume top management positions and identify positions that would most likely require an external search to fill. To assist the Board, the CEO annually provides and discusses with our Board an assessment of senior managers and discusses the potential of managers to succeed to the CEO position.

Board Assessment and Director Evaluation

The Board, as overseen by the Governance and Nominating Committee, conducts an annual Board assessment and individual director evaluations. These processes help provide that the Board and its committees function effectively and in the best interest of our stockholders and other stakeholders. We believe these processes are well designed to promote good governance and to set expectations for the relationships and interactions of the Board and management.

The annual Board assessment involves the following steps:

The Governance and Nominating Committee reviews the prior year’s process of Board assessment and director evaluation for Board feedback, including in relation to current trends and best practices. This involves review of directors’ responses to a written questionnaire designed to solicit feedback on a range of issues, including among other topics:
	•	Meetings (mechanics, clarity, processes)
	•	Membership (efficiency, skills, fit, composition, orientation)
	•	Structure (committees, reports, leadership)
	•	Compensation (adequacy, alignment, risks)
	•	Culture and Ethics (confidentiality, collegiality, candor)
	•	Roles and Responsibilities (strategies, financial, operational, budgetary, risk oversight, governance, M&A, succession)
	•	Relationship with Management (supportive, challenging, constructive)
The Governance and Nominating Committee adjusts the substance and process as appropriate to take into account all feedback received for any additions or changes to the prior year’s Board assessment process or questionnaire and implements the questionnaire process with each member of the Board.
The results of the written questionnaires are compiled to be made anonymous by the Corporate Secretary and summaries are provided for review by the full Board.

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	The summary of the Board assessment questionnaire responses and related topics and observations are discussed at the following meeting of the Governance and Nominating Committee with all members of the Board present, including suggestions for updating policies and Board practices in accordance with the results of the assessment.
	Taking into account the results of the Board assessment, each committee of the Board conducts an annual evaluation of its charter and performance under its charter.

The annual individual director assessment involves the following steps:

Each director submits to the Chairperson a written summary of their performance, including within four attributes:
	•	Functional Expertise (remaining current and well-informed in relevant areas of committee and Board responsibilities)
	•	Engagement (investing time in addition to Board proceedings to be knowledgeable about the company, including its financial performance, organization, products, markets, customers, and competitors)
	•	Communication (contributing critically and constructively during meetings and in writing to the Board and management)
	•	Enthusiasm (demonstrating strong interest in continuing to serve as a director of the company)
The Chairperson completes a one-on-one feedback session with each director regarding their summary of performance and other observations.
The Chairperson presents an aggregated summary of the director evaluations and provides any resulting recommendations to the full Board.

Board’s Role in Risk Oversight

We operate within the semiconductor test and measurement equipment industry. We sell products to integrated circuit manufacturers and others within the broader semiconductor and electronics industry. Our business necessarily involves many operational and market-driven risks. A list of risk factors associated with our business can be found in our Annual Report on Form 10-K for our fiscal year ended December 26, 2020, as filed with the SEC.

Practically all activities of the company’s senior management have an aspect of risk management. Executives are required to treat the assessment and management of risks in their activities as an integral part of their management duties. That can have differing levels of implicit or explicit identification and handling of risks to suit the overall management of the activity. As part of the risk management process, each of the company’s business units and functions is responsible for identifying key risks that could affect the achievement of business goals and strategies or impact the company’s customers, the environment or other stakeholders. Each business unit and corporate function assesses and prioritizes risks to the achievement of objectives and determines appropriate actions to be taken to manage and mitigate such risks.

The company’s annual risk assessment process is designed to support both the Board’s role in risk oversight and the effective assessment and management of risks by management. This involves the compilation of responses to an executive management review conducted with reference to the prior year’s risk assessment, and a mapping of important risks to specific topics presented at Board and committee meetings in order to support Board oversight of the pertinent risks. The company recently expanded this risk assessment to identify, assess and prioritize areas of risk to the company’s achievement of its sustainability goals, including its environmental and social objectives, and an assessment of cybersecurity risks.

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The Board uses these risk assessments to confirm alignment between the Board’s prioritization of specific risks, when and how identified risks are reviewed by the Board or its committees, the frequency of such reviews and identifying the management lead most responsible for addressing each identified risk. This process also supports analyses at the management and Board level of the factors which drive the:

•	amount of risk that the company should be willing to accept in the pursuit of its business plans and strategies;

•	ability of the company to withstand the negative occurrences arising out of risks;

•	company’s approaches to the transfer of risks to third parties; and,

•	ongoing attention and resources that the company devotes to risk assessment and mitigation.

Our Board exercises these risk oversight activities explicitly and as part of its other oversight activities. At its regularly scheduled meetings, the Board receives reports from executives and senior managers who have primary responsibility for the company’s activities, such as for manufacturing, research and development, sales and marketing, finance, and compliance. Analyses of pertinent risks to the company’s achievement of its objectives is integral to Board proceedings.

The Board also exercises its risk oversight function through the three committees of the Board.

Audit Committee Risk Oversight. As prescribed in its charter, the Audit Committee oversees the company’s accounting and financial reporting processes and the audits of the company’s financial statements, including oversight of risks presented in the company’s internal controls over financial reporting and disclosure controls and procedures, fraud risks and risks of non-compliance with legal and regulatory requirements that pertain to accounting and financial reporting. The Audit Committee is responsible for reviewing and discussing with management and the company’s independent registered public accounting firm any guidelines and policies relating to risk assessments and risk management within the scope of the Audit Committee’s activities. This includes the measures that management takes to monitor, control and minimize the company’s major financial risk exposures.

Compensation Committee Risk Oversight. As part of its oversight of the company’s compensation programs, the Compensation Committee oversees risks presented by the company’s compensation and benefits plans, policies and programs. The Compensation Committee also oversees and interacts with the Board and the Audit Committee regarding the management of risks arising from our company’s executive and employee compensation practices. This includes helping the company avoid creating incentives for management to take risks that are not adequately justified with reference to stockholders’ and other stakeholders’ interests. This compensation risk assessment is aided by a specific evaluation of the subject performed by the independent compensation consultant to the Compensation Committee. In addition, the Compensation Committee oversees the company’s compliance with regulations governing executive and director compensation and sound compensation governance, and oversees other risks related to the company’s human capital management.

Governance and Nominating Committee Risk Oversight. As prescribed in its charter, the Governance and Nominating Committee oversees the company’s corporate governance practices, including Board risk oversight and the governance of risk management. As part of this, the Committee oversees the Board’s processes for assessing and managing the risks associated with governance issues, such as the independence of the Board, key executive succession, environmental, health and safety policies and programs, human rights policies and practices, and the company’s sustainability and environmental, social and governance (“ESG”) programs.

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Corporate Governance Highlights

Our commitment to good corporate governance includes the following practices:

•	7 of 8 independent directors

•	Diversity of Board skills, experience and background

•	Stock ownership guidelines for directors and executive officers

•	Independent Chairperson, separate from Chief Executive Officer

•	Thoughtful Board refreshment, with half the Board added in the past six years

•	Voting rights proportional to economic interests - one share equals one vote

•	No stockholder rights plan/poison pill

•	Succession planning process

•	Majority voting with director resignation policy for uncontested elections

•	Resignation policy in uncontested elections if a director fails to receive a majority of votes

•	Board and committee oversight of sustainability and corporate social responsibility, including human capital management

•	Annual Board, committee and director evaluations

•	Board risk oversight and assessment

•	Strict policy prohibiting the pledging or hedging of company shares or similar transactions

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Corporate Governance Guidelines

The company monitors developments in the area of corporate governance and regularly reviews its processes and procedures in light of such developments. This includes review of federal and state laws affecting corporate governance, as well as rules promulgated by the SEC and the Nasdaq Stock Market. The company believes that it has sound governance procedures and practices in place which are designed to enhance and protect the interests of its stockholders.

The Board has approved Corporate Governance Guidelines for the company. The Corporate Governance Guidelines, which can be found on the company’s website at www.formfactor.com, address, among other matters, the following:

•	Size of the Board

•	Requirement that the Board be comprised of a majority of independent directors

•	Limits on the number of other public company boards on which directors may serve

•	Tender of resignation in the event of change in principal occupation or position

•	Requirement that each committee of the Board be comprised entirely of independent directors

•	Annual CEO performance assessments

•	Stock holding requirements for directors and executive officers

•	Individual director performance reviews

•	Other matters germane to the structure, operation and responsibilities of the Board

Director Education

The company’s Corporate Governance Guidelines encourage directors to participate in continuing education provided by external organizations relevant to their service on our Board with reimbursement from the company. Individual directors benefit from a variety of sources of director continuing education, and share relevant information and insights with the Board from attendance at presentations and seminars sponsored by governance organizations and service providers. Our directors also circulate a variety of publications of interest on corporate governance with the Board. In addition, the Governance and Nominating Committee conducts a process of polling Board members to select key corporate governance topics for circulation of relevant educational information followed by discussion at the next scheduled quarterly meeting.

Specific director education subjects discussed at meetings of the Governance and Nominating Committee in the past year have included topics on cybersecurity, ESG program oversight and reporting, mergers and acquisitions, and the evolution of the expectations and duties of public company directors.

Continuing education of the Board also involves creating Board agendas and management presentations that are sufficiently detailed and pertinent to the company’s strategy, operations, products, and other matters that enable Board members to acquire current background necessary to oversee the company’s activities. The Governance and Nominating Committee regularly reviews the adequacy of these communications and materials as part of the annual Board assessment.

All new directors are provided substantial orientation which commences before a new director attends their first Board meeting. The Governance and Nominating Committee oversees this orientation process to on-board new directors through the preparation of company-specific information and other background materials and meetings with senior management. This onboarding also includes tours of one or more company manufacturing facilities. Solid orientation enables new directors to rapidly become familiar with the company’s business and strategic plans, significant financial matters, risks, values, sustainability, ethics, compliance programs and corporate governance practices.

2021 Proxy Statement

SEC Form DEF 14A filed by FormFactor, Inc.