<p align= justify >According to the Company’s Form 10-Q for the quarterly period ended March 29, 2008, three [similar] actions have been consolidated. The plaintiffs filed these actions following the Company’s restatement of its financial statements for the fiscal year ended December 30, 2006, for each of the fiscal quarters for that year, and for the fiscal quarters ended March 31 and June 30, 2007. In April 2008, the designated lead plaintiffs filed a Consolidated Amended Complaint. The plaintiffs claim violations of Sections 10(b) and 20(a), and Rule 10b-5 of the Securities Exchange Act of 1934, alleging that the defendants knowingly issued materially false and misleading statements regarding the Company’s business and financial results prior to the restatements. The plaintiffs seek to recover unspecified monetary damages, equitable relief and attorneys’ fees and costs. On or about May 5, 2008, the Company filed a motion to dismiss the Consolidated Amended Complaint. The Court has set a hearing date of July 18, 2008; a ruling date has not been set.</p> <p align= justify > </p>
<p align= justify >The original Complaint charges that FormFactor and certain of its officers and directors violated federal securities laws by issuing materially false and misleading statements regarding FormFactor’s business and financial results. Specifically, during the Class Period, the defendants concealed the following facts: (i) the Company failed to properly account for its obsolete inventory; and (ii) the Company was experiencing production constraints related to its new Harmony product which would significantly increase its costs and expenses in order to accelerate its production capabilities. Furthermore, the production constraints would significantly raise the risk that customers with older generation products would seek alternative sources, such as the Company’s competitors, or seek to renegotiate their contracts with FormFactor placing serious pressure on the Company’s future revenue.</p>
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<p align= justify >The complaint further alleges that on October 24, 2007, after the market closed, the Company announced that adjustments to inventory valuations may be required with respect to periods prior to the third quarter of 2007. On this news, FormFactor’s stock declined $7.70 per share to close at $35.54 per share, a one-day decline of nearly 20%. During the Class Period, FormFactor traded as high as $49.45 per share on August 30, 2006.</p>