Exhibit 10.1

 

 

LOGO [g72461image001.jpg]

 

  Number:   HR-   Rev:               Date:       Sheet:   1 of 4  

HUMAN RESOURCES POLICY

OFFICER SEVERANCE PAY

RECORD OF DOCUMENT APPROVALS FOR INITIAL RELEASE

 

     Originator    Checked    End User    Q.A.    Approved    Approved   
Approved   NAME                      BY   TITLE                        DATE   
                 

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1.0 SCOPE

This policy applies to all Officers of Kulicke & Soffa Industries, Inc.
(“Kulicke & Soffa”)

 

2.0 OBJECTIVES

Payment and benefit policy for Officers.

 

3.0 RESPONSIBILITY

The Management Development and Compensation Committee of the Board has the
primary responsibility for this policy. Any request for administrative
clarification must be presented to the Committee Chairperson. There shall be no
deviation from this policy without authorization from the Management Development
and Compensation Committee of the Board.

 

4.0 APPLICABLE DOCUMENTATION

None

 

5.0 DEFINITIONS

“Cause” shall mean: (i) theft or embezzlement, (ii) indictment for a felony,
(iii) material breach of Kulicke & Soffa’s Code of Ethics, Code of Business
Conduct or any written agreement between Kulicke & Soffa and the Officer,
(iv) any act of dishonesty or misconduct (whether in connection with
responsibilities as an Officer or otherwise) that either substantially impairs
Kulicke & Soffa’s business, goodwill or reputation or substantially compromises
the Officer’s ability to represent Kulicke & Soffa with employees, customers,
investors, or the public, or (v) failure to perform assigned lawful duties in a
satisfactory manner after five (5) business days’ written notice (such notice in
reasonable detail and making specific reference to the definition of “Cause” and
to this paragraph 5.0) and opportunity to cure during such period.

“Disability” means the Officer’s incapacity due to physical or mental illness
which would render the Officer unable to perform the essential functions of his
position (including with any reasonable accommodation required by applicable
law). Any question as to the Officer’s incapacity due to physical or mental
illness referred to above to which Kulicke & Soffa and the Officer cannot agree
shall be determined by a qualified independent physician selected jointly by
Kulicke & Soffa and the Officer or, if Kulicke & Soffa and the Officer cannot
agree, a physician selected jointly by two physicians, one selected by Kulicke &
Soffa and one selected by the Officer. The determination of such a physician
made in writing to Kulicke & Soffa and the Officer shall be final and conclusive
for purposes of this Agreement.

“Good Reason” shall mean: without the Officer’s consent, (i) any substantial
diminution in the position or authority of the Officer which is (are)
inconsistent with the Officer’s then current position or authority,
(ii) reduction of the Officer’s base salary (other than a percentage reduction
applicable to all other Officers) or exclusion of the Officer from compensation
or benefit plans made available to other Officers in his or her salary grade,
(iii) any requirement by Kulicke & Soffa that the Officer relocate his primary
office or location to any office or location more than 30 more miles away from
the Officer’s then current primary residence, except for relocations in
connection with termination of expatriate assignments, (iv) termination of this
policy, (v) amendment or modification of this policy that materially and
adversely affects the Officer’s rights hereunder, (vi) failure by any successor
to Kulicke & Soffa to expressly adopt this policy;

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“Officers” shall mean the Chief Executive Officer and all other employees of
Kulicke & Soffa salary grade 18 and above.

“Termination Date” shall mean the Officer’s last day of employment with
Kulicke & Soffa.

 

6.0 POLICY

 

  6.1 Kulicke & Soffa shall provide the following severance payments and
benefits to Officers who (i) are terminated by Kulicke & Soffa (A) without
“Cause” or (B) because of Disability, or (ii) voluntarily terminate their
employment for Good Reason:

 

  •  

An amount equal to six (6) months of base salary, at the rate paid as of the
Termination Date, less legally required deductions and employee authorized
deductions.

 

  •  

In addition, an amount equal to twelve (12) months of base salary, at the rate
paid as of the Termination Date, less legally required deductions and employee
authorized deductions; provided that, the Officer and Kulicke & Soffa have
entered into and not revoked a severance agreement and general release in favor
of Kulicke & Soffa, in the form provided to the Officer by Kulicke & Soffa (the
“Release”).

 

  •  

Kulicke & Soffa shall pay severance payments in the form of salary continuation
payable on such Officer’s regularly scheduled pay dates during the period
beginning on the Termination Date and ending on March 1 of the calendar year
following the Termination Date. On March 1, Kulicke & Soffa shall pay the unpaid
balance of the severance payments to the Officer in a lump sum amount.

 

  •  

Continuation of participation in medical, prescription drug, dental, and vision
benefit programs for six (6) months after the Termination Date, and for an
additional twelve (12) month period provided that the Officer and Kulicke &
Soffa have entered into the Release. Participation would be at the same rate of
premium payment by Officer applicable to current employees.

 

  •  

Continuation of eligibility to participate in life insurance program to a
maximum of six (6) months after the Termination Date, subject to the agreement
of the life insurance provider

 

  •  

The right to make contributions to the Kulicke & Soffa 401(k) Plan and vesting
under the Kulicke & Soffa 401(k) Plan shall cease effective on the Termination
Date.

 

  •  

No stock options shall vest after the Termination Date and the former Officer
shall have three (3) months after the Termination Date to exercise vested stock
options, unless different terms apply under the applicable stock option plan(s)
if the Officer is eligible to retire under the terms of such plan(s). Any
entitlement to Performance Share awards shall be determined in accordance with
the terms of the applicable plan.

 

  •  

An Officer is eligible for a quarterly cash incentive award for a fiscal quarter
(if awards are granted) under the Officer Incentive Plan only if the Officer’s
Termination Date is on or after the last day of such fiscal quarter. Payment, if
any, will take place on payment date determined for that award period for
Officers.

 

  6.2

Notwithstanding anything to the contrary set forth in this Policy, Kulicke &
Soffa will not pay any severance payment or benefit of any kind to an Officer
terminated by Kulicke & Soffa in connection with a divestiture of a business of
Kulicke & Soffa if the Officer receives an offer of employment from the
purchaser of the divested business (or an affiliate of the purchaser) which
includes targeted annual cash compensation of at least 90% of his or her
targeted annual cash

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compensation at Kulicke & Soffa on the Termination Date. For purposes of this
calculation, Kulicke & Soffa targeted annual cash compensation shall not include
any special bonus or other amount payable or paid to Officer in connection with
the disposition of the of the divested business.

 

  6.3 Notwithstanding anything to the contrary set forth in this policy, if an
Officer breaches any provision of a written agreement between such Officer and
Kulicke & Soffa, including an employment agreement, after the Officer’s
Termination Date and during the period that such agreement remains in effect,
Kulicke & Soffa will make no further severance payments to such Officer and such
Officer shall promptly return all prior severance payments paid to such Officer.

 

7.0 APPENDIX

None