KULICKE AND SOFFA INDUSTRIES, INC. Performance Share Unit Award Agreement
Exhibit
10.4
KULICKE
AND XXXXX INDUSTRIES, INC.
2009
EQUITY PLAN
This
Performance Share Unit Award Agreement (the “Agreement”) dated as
of ________________ is between Kulicke and Xxxxx Industries, Inc. (the
“Company”) and Name (the
“Participant”) pursuant to the Kulicke and Xxxxx 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,
the Committee has authorized the grant to the Participant of 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 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 hereby grants to the Participant an Award
of # of units
Performance Share Units. 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 3, 2010 and shall end on September 28, 2013. 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 as soon as
administratively practicable following the vesting date, but no later than the
fifteenth day of the third month following the end of the calendar year in which
such vesting date occurs.
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 or death,
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
based on vesting months as measured from the day of the month on which the Grant
was made 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.
Notwithstanding
the foregoing, in the event of a Participant’s involuntary termination without
Cause, the Committee may, in its sole discretion, upon the occurrence of such
event, entitle the Participant 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 based on vesting months as measured from the day
of the month on which the Grant was made to the corresponding day of each
succeeding month. The vesting date for this purpose shall be the date
of the Committee’s decision to accelerate vesting. There is no
entitlement to such accelerated vesting and the Committee shall exercise such
discretion only in limited and special circumstances.
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.
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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 Committee may require the Participant to remit to
the Company an amount sufficient to satisfy the withholding requirements or may,
in its discretion, permit or require the Participant, subject to the provisions
of the Plan and withholding rules established by the Committee, to 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.
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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 XXXXX INDUSTRIES, INC.
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By:
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Name: Xxxxx
X. Xxxxxxxx
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Title: VP
& General Counsel
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By:
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Participant
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Appendix
A
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Kulicke
& Xxxxx Industries
Performance
Share Plan
FY2011
through FY2013
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Kulicke
& Xxxxx Industries
Performance
Share Plan
FY2011
through FY2013
The
Management Development and Compensation Committee of the Board of Directors has
established the following Performance Share Plan terms for performance share
unit grants. All Performance Share Award grants are made pursuant to
the Kulicke & Xxxxx 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
October-December
Performance Share Awards
The terms
of the grant are stated below:
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Grant
Date
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Various
Grant Dates from October 2010 through September 2011
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Performance
Period
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October
3, 2010 to September 28, 2013
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Vesting
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3-year
xxxxx xxxx from Xxxxx Date
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Peer
Companies
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Philadelphia
Semiconductor Index (SOXX) companies at Grant
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Target
Performance
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Median
of the Peer Companies
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Payout
Range
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0%
to 200% of Target Performance
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Stock
Averaging Period
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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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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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Marvell
Technology Inc
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MEMC
Electronic Materials
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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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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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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 Performance Share Awards made under this
plan.
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.
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 interpolated will be expressed as a full percentage point ranging
from 0% to 200%.
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Percentile
Performance
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Payout
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99th
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200%
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95th
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190%
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90th
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180%
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85th
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170%
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80th
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160%
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75th
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150%
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70th
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140%
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65th
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130%
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60th
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120%
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55th
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110%
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Median 50%
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100%
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45th
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90%
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40th
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80%
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35th
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70%
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30th
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60%
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25th
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50%
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<25th
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0%
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