KULICKE AND SOFFA INDUSTRIES, INC. Performance Share Unit Award Agreement
Exhibit
10.3
KULICKE
AND ▇▇▇▇▇ INDUSTRIES, INC.
2009
EQUITY PLAN
This
Performance Share Unit Award Agreement (the “Agreement”) between Kulicke and
▇▇▇▇▇ Industries, Inc. (the “Company”) and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Participant”)
pursuant to the Kulicke and ▇▇▇▇▇ Industries, Inc. 2009 Equity Plan (the
“Plan”). Capitalized terms that are not defined herein shall have the
same meanings given to such terms in the Plan.
WHEREAS,
on October 29, 2009 the Committee granted to the Participant Performance Share
Units in accordance with the provisions of the Plan, a copy of which is attached
hereto; and
WHEREAS,
the Participant and the Company desire to enter into this Agreement to evidence
and confirm the grant of such Performance Share Units on October 29, 2009 on the
terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the legal sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Performance Share
Units. The Company granted to the Participant an Award of
33,500 Performance Share Units on October 29, 2009. Upon fulfillment
of the requirements set forth below, the Participant shall have the right to
receive one share of Common Stock of the Company (“Share”) for each earned
Performance Share Unit. This grant is in all respects limited and
conditioned as hereinafter provided, and is subject in all respects to the terms
and conditions of the Plan now in effect and as it may be amended from time to
time (but only to the extent that such amendments apply to outstanding grants of
Performance Share Units). Such terms and conditions are incorporated
herein by reference, made a part hereof, and shall control in the event of any
conflict with any other terms of this Agreement.
2. Performance Share Unit
Vesting. The performance period for this Award shall commence
on October 1, 2009 and shall end on September 30, 2012. The Award
shall be subject to performance vesting requirements based upon the achievement
of Performance Goals as set forth in Appendix A to this Agreement.
3. Payment of Earned
Performance Share Units. For each earned Performance Share
Unit, one Share shall be delivered to the Participant during the period from
October 1 to December 15 following the end of the performance period,
except as otherwise provided herein.
4. Termination of
Service. Entitlement to the Award is also subject to the Participant
remaining continuously employed through the last day of the performance
period. Notwithstanding the foregoing, if the Participant terminates
employment during the performance period due to Retirement, Disability, death or
involuntary termination without Cause, the Participant (or in the event of
death, the Participant’s beneficiary) shall be entitled to a pro rata portion of
the Award the Participant would otherwise have earned based on the actual
achievement of the Performance Goals as determined at the end of the performance
period had he or she remained employed to the end of the performance period. The
pro rata portion will be calculated by multiplying the number of Performance
Share Units by a fraction, the numerator of which is the number of full vesting
months of the Participant’s employment in the performance period and the
denominator of which is thirty-six. Vesting months are measured from
the first day of the performance period to the corresponding day of each
succeeding month. If the Participant terminates employment with the
Company and Related Corporations for any other reason, all unvested Performance
Share Units at the time of such termination of employment shall be
forfeited.
5. Adjustment in
Capitalization. In the event any stock dividend, stock split,
or similar change in the capitalization of the Company affects the number of
issued Shares such that an adjustment is required in order to preserve, or to
prevent the enlargement of, the benefits or potential benefits intended to be
made available under this Award, then the number of Performance Share Units
shall be proportionately adjusted as provided under the terms of the
Plan. Unless the Committee determines otherwise, the number of
Performance Share Units subject to this Award shall always be a whole
number.
6. Certain Corporate
Transactions. In the event of a corporate transaction (as, for
example, a merger, consolidation, acquisition of property or stock, separation,
reorganization, or liquidation), each outstanding Award shall be assumed by the
surviving or successor entity; provided, however, that in the event of a
proposed corporate transaction, the Committee may terminate all or a portion of
any outstanding Award, if it determines that such termination is in the best
interests of the Company.
If the Participant will, following the
corporate transaction, be employed by or otherwise providing services to an
entity which is a surviving or acquiring entity in such transaction or an
affiliate of such an entity, the Committee may, in lieu of the action described
above with respect to outstanding Awards, arrange to have such surviving or
acquiring entity or affiliate grant to the Participant a replacement award
which, in the judgment of the Committee, is substantially equivalent to the
Award.
7. Change in
Control. Notwithstanding any other provisions of this
Agreement, in the event a Change in Control (as defined in the Plan) occurs and
the surviving or successor entity does not agree to assume the Performance Share
Unit Award, the performance requirements under any outstanding Performance Share
Units are waived and the Participant will vest in such Units if he or she is
employed on the last day of the performance period. A cash payment
will be made as if “target” performance had been attained based on the value of
Shares on the date of the Change in Control. Such payment shall be
made during the period from January 1 to March 15 following the end of
the performance period. If the surviving or successor entity agrees
to assume the outstanding Performance Share Unit Award and the Participant is
terminated without Cause (as defined in the Plan) prior to the twenty-four (24)
month anniversary of the Change in Control, the Participant shall be entitled to
a pro rata portion of the Award the Participant would otherwise have earned
based on the actual achievement of the Performance Goals as determined at the
end of the performance period had he or she remained employed to the end of the
performance period. The pro rata portion will be calculated by multiplying the
number of Performance Share Units by a fraction, the numerator of which is the
number of full vesting months of the Participant’s employment in the performance
period and the denominator of which is thirty-six. Vesting months are
measured from the first day of the performance period to the corresponding day
of each succeeding month.
8. Restrictions on
Transfer. Performance Share Units may not be sold, assigned,
hypothecated, pledged or otherwise transferred or encumbered in any manner
except by will or the laws of descent and distribution.
9. Withholding of
Taxes. The obligation of the Company to deliver Shares shall
be subject to applicable Federal, state and local tax withholding
requirements. The Participant, subject to the provisions of the Plan
and the Withholding Rules may satisfy the withholding tax, in whole or in part,
by electing to have the Company withhold Shares (or by returning previously
acquired Shares to the Company). Such election must be made in
compliance with and subject to the Withholding Rules, and the Company may limit
the number of Shares withheld to satisfy the minimum tax withholding
requirements to the extent necessary to avoid adverse accounting
consequences.
10. No Rights as a
Shareholder. Until Shares are issued, if at all, in
satisfaction of the Company’s obligations under this Award, in the time and
manner specified above, the Participant shall have no rights as a
shareholder.
11. No Right to Continued
Employment. Neither the execution and delivery hereof nor the
granting of the Award shall constitute or be evidence of any agreement or
understanding, express or implied, on the part of the Company or any of its
Related Corporations to employ or continue the employment of the Participant for
any period.
12. Governing
Law. The Award and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania (without reference to the principles of conflicts
of law).
13. Signature in
Counterpart. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signature
thereto and hereto were upon the same instrument.
14. Binding Effect;
Benefits. This Agreement shall be binding upon and inure to the benefit
of the Company and the Participant and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended
or shall be construed to give any person other than the Company or the
Participant or their respective successors or assigns any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision
contained herein.
15. Amendment. This
Agreement may not be altered, modified or amended except by a written instrument
signed by the Company and the Participant.
16. Sections and Other
Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the Company, by its
duly authorized officer, and the Participant has executed this Agreement in
duplicate as of the day and year first above written.
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KULICKE
AND ▇▇▇▇▇ INDUSTRIES, INC.
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By:
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/s/
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
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VP & General Counsel
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By:
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/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Participant
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Date:
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January 28,
2010
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Exhibit
10.3
Appendix
A
Kulicke
& ▇▇▇▇▇ Industries
Performance
Share Plan
October
2009
The
Management Development and Compensation Committee of the Board of Directors has
established the following Performance Share Plan terms for the 2009 Performance
Share grants. All Performance Share Award grants are made pursuant to
the Kulicke & ▇▇▇▇▇ Industries 2009 Equity Plan.
Performance
Metric: Relative Total Shareholder Return
Performance
for the purposes of determining the vesting of the performance share awards will
be based on Relative Total Shareholder Return (TSR). Relative TSR
measures the K&S share price movement over a performance period relative to
the share price movement of peer companies.
TSR =
End of Period Share
Price – Beginning of Period Share Price + Dividend
Beginning
of Period Share Price
2009
Performance Share Awards
The terms
of the grant are stated below:
|
Grant
Date
|
October
29, 2009
|
|
|
Performance
Period
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October
1, 2009 to September 30, 2012
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|
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Vesting
|
3-year
▇▇▇▇▇ ▇▇▇▇ on September 30, 2012
|
|
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Peer
Companies
|
Philadelphia
Semiconductor Index (SOXX) companies at grant
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Target
Performance
|
Median
of the Peer Companies
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|
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Payout
Range
|
0%
to 200% of Target Performance
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|
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Stock
Averaging Period
|
90
calendar
days
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Peer
Companies
The
companies of the Philadelphia Semiconductor (SOXX) Index as of the Grant Date
will comprise the Peer Companies for the determination of the Relative TSR
results of K&S at Vesting.
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Altera
Corporation
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National
Semiconductor Corporation
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Applied
Materials, Inc
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Novellus
Systems
|
|
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Advanced
Micro Devices, Inc
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SanDisk
Corporation
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|
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Broadcom
Corporation
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STMicroelectronics
N.V.
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Intel
Corporation
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Teradyne
|
|
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KLA-Tencor
Corporation
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Taiwan
Semiconductor Manufacturing Co.
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Linear
Technology Corporation
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Texas
Instruments, Inc
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|
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Marvell
Technology Inc
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MEMC
Electronic Materials
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|
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Micron
Technology Inc
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Xilinx,
Inc
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The Peer
Companies may change over the Performance Period as follows:
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·
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In
the event of a merger, acquisition or business combination transaction of
a Peer Company with or by another Peer Company, the surviving entity will
remain a Peer Company, without adjustment to its financial or market
structure.
|
|
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·
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In
the event of a merger of a Peer Company with an entity that is not a Peer
Company, or the acquisition or business combination transaction by or with
a member of the peer group, or with an entity that is not a Peer Company,
in each case, where the Peer Company is the surviving entity and remains
publicly traded, the surviving entity will remain a Peer
Company.
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·
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In
the event of a merger or acquisition or business combination transaction
of a Peer Company by or with an entity that is not a Peer Company, a
‘going private’ transaction involving a Peer Company or the liquidation of
a Peer Company, where the Peer Company is not a surviving entity or is
otherwise no longer publicly traded, the company shall no longer be a Peer
Company.
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Changes
to the companies comprising the SOXX Index over the Performance Period will not
change the Peer Companies for the 2009 Performance Share Awards.
Target
Performance
TSR for
each of the Peer Companies is calculated and ranked highest to
lowest. The Median TSR performance of the Peer Companies is the TSR
at which half the Peer Companies’ TSR results are below and half the Peer
Companies’ TSR results are above.
Payout
Range
Grants of
Performance Share Awards will be made at the Target Performance amount defined
as the Median performance of the Peer Companies. The amount vested at
Vesting will range from 0% to 200% of the Target Performance amount depending
upon the final positioning of KLIC’s TSR to the median of the Peer Companies at
the end of the Performance Period.
-2-
The
payout scale below shows the Award vesting percentage at percentile performance
points from <25th to
99th
at 5 percentile point increments. Final Vesting of Performance Share
Awards will be expressed as a full percentage point ranging from 0% to
200%.
|
Percentile Performance
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Payout
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|||
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99th
|
200 | % | ||
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95th
|
190 | % | ||
|
90th
|
180 | % | ||
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85th
|
170 | % | ||
|
80th
|
160 | % | ||
|
75th
|
150 | % | ||
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70th
|
140 | % | ||
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65th
|
130 | % | ||
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60th
|
120 | % | ||
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55th
|
110 | % | ||
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Median
50%
|
100 | % | ||
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45th
|
90 | % | ||
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40th
|
80 | % | ||
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35th
|
70 | % | ||
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30th
|
60 | % | ||
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25th
|
50 | % | ||
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<25th
|
0 | % | ||
-3-