Exhibit 10.7                
EXECUTION VERSION
 
EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), is made and entered into as of
October 3, 2008, by and between Kulicke & Soffa Industries, Inc. (“Employer”), a
Pennsylvania corporation, and Jason M. Livingston (the “Executive”).

BACKGROUND

A.           On the date hereof, Employer and an affiliate of Employer, acquired
substantially all of the assets (the “Acquisition”) of Orthodyne Electronics
Corporation, a California corporation (the “Company”) related to and used in
connection with its business of designing, manufacturing and selling equipment
and tooling for the semiconductor and microelectronics industries, through an
asset purchase agreement, dated as of July 31, 2008, by and among Employer and
the Company, among others (the “Purchase Agreement”).  Any terms used but not
otherwise defined herein shall have the meaning set forth in the Purchase
Agreement.

B.           Immediately prior to the Acquisition, Executive was an executive of
the Company and employed by the Company in such capacity.

C.           Employer wishes to employ Executive pursuant to the terms and
conditions and for the consideration set forth in this Agreement, and Executive
wishes to accept employment with Employer pursuant to such terms and conditions
and for such consideration.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:

SECTION 1.  CAPACITY AND DUTIES
 
1.1                         Employment; Acceptance of Employment.  Employer
shall employ Executive and Executive hereby accepts employment by Employer for
the period and upon the terms and conditions hereinafter set forth.
 
1.2                         Capacity and Duties.
 
(a)                      Executive shall be employed by Employer generally as
Vice President of Finance, Orthodyne Division of Employer, and shall report
initially to the President of Orthodyne Division of Employer.  Executive shall
perform such other duties and shall have such authority as may from time to time
reasonably be specified by the Employer; provided, however, that Employer shall
delegate to Executive authority and duties consistent and commensurate with the
authority and duties of a Vice President of Finance.  Executive shall perform
his duties for Employer principally at Employer’s office located in Irvine,
California, except for periodic travel to Employer’s or its affiliates’ offices
worldwide and other travel that may be necessary or appropriate in connection
with the performance of Executive’s duties hereunder.

 
 

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(b)                      Executive shall devote his full working time, energy,
skill and best efforts to the performance of his duties hereunder, in a manner
that will faithfully and diligently further the business and interests of the
Employer.  Notwithstanding the foregoing, for so long as he complies with the
covenants provided in Section 5 of this Agreement and solely in connection with
passive investments or charitable activities, Executive may participate as a
Board member or advisor in the management or operation of any enterprise or
organization other than Employer; provided, however, that such activity does not
interfere with the performance of his responsibilities to Employer without the
prior written consent of the Board of Directors of the Employer.
 
SECTION 2.  TERM OF EMPLOYMENT
 
2.1                         Term.  The initial term (the “Initial Term”) of
Executive’s employment hereunder shall commence on the date hereof and shall
expire three years thereafter.   Upon expiration of the Initial Term, the
Executive shall be an “at will” employee of Employer.
 
SECTION 3.  COMPENSATION
 
3.1                        Compensation.  As compensation for Executive’s
services hereunder, Employer shall pay to Executive a salary at the annual rate
of $307,200 (the “Base Salary”), payable in periodic installments in accordance
with Employer’s regular payroll practices in effect from time to
time.  Following the first anniversary of the date of this Agreement and on each
successive anniversary thereof during the Term, the Company may adjust the Base
Salary upward based on such factors as it deems appropriate in its sole
discretion.  Executive shall participate in Employer’s Executive Incentive
Compensation Plan, which will be based 80% on the Orthodyne Division’s quarterly
performance and 20% on quarterly individual objectives with such individual
objectives to be administered by the President of such Orthodyne
Division.  Executive shall not be entitled to participate in any other bonus
plan or in any equity compensation plan of Employer under this Agreement.
 
3.2                         Executive Benefits.  In addition to the compensation
provided for in Section 3.1, Executive shall be entitled during the term of his
employment to participate in such employee benefit plans and benefit programs
(including, without limitation, vacation time and sick leave) as may from time
to time be provided for other employees of Employer whose duties,
responsibilities, and compensation are reasonably comparable to those of
Executive.  Executive acknowledges and agrees that Employer may amend, diminish
or enlarge any such benefits for its employees and executives generally in its
sole discretion from time to time without notice.  In addition, during the
entire term of this Agreement, Employer shall provide Executive with life
insurance on terms comparable to such life insurance (including, without
limitation, the cost to Executive of maintaining such life insurance) provided
by Employer to similarly situated employees.
 
3.3                         Expense Reimbursement.  During the term of his
employment, Employer shall reimburse Executive for all reasonable expenses
incurred by him in connection with the performance of his duties hereunder,
including travel expenses, in accordance with its regular reimbursement policies
applicable to other employees of Employer whose duties, responsibilities, and
compensation are reasonably comparable to those of Executive as in effect from
time to time and upon receipt of itemized vouchers therefor and such other
supporting information as Employer may reasonably require.

 
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SECTION 4.  TERMINATION OF EMPLOYMENT
 
4.1                         Death of Executive.  Executive’s employment
hereunder shall immediately terminate upon his death, upon which Employer shall
not thereafter be obligated to make any further payments hereunder other than
amounts (including salary, expense reimbursement, etc.) accrued as of the date
of Executive’s death.
 
4.2                         Disability of Executive.  If Executive is unable,
for any reason due to his physical, mental or emotional illness or condition to
perform substantially his normal duties hereunder with reasonable accommodation
as required under applicable laws, for a period of 120 consecutive days, or 180
days within a period of 12 consecutive months, then Employer shall have the
right to suspend Executive’s employment upon written notice to Executive at any
time during the continuation of such inability, in which event Employer shall
not thereafter be obligated to make any further payments hereunder other than
amounts (including salary, expense reimbursement, etc.) accrued under this
Agreement as of the date of such suspension.  If, after the suspensions, the
disability shall continue for more than 360 days (including therein the 120 day
or 180 day period, as the case may be), the Employer shall have the right to
terminate the Executive.
 
4.3                         Termination for Cause. Executive’s employment
hereunder shall terminate immediately upon notice that the Employer is
terminating Executive for “Cause” (as defined herein), in which event Employer
shall not thereafter be obligated to make any further payments hereunder other
than amounts (including salary, expense reimbursement, etc.) accrued under this
Agreement as of the date of such termination.  As used herein, “Cause” shall
include the following:
 
(i)                      fraud committed in connection with Executive’s
employment, theft or misappropriation or embezzlement of the funds of the
Employer or any of its affiliates (hereinafter referred to collectively with the
Employer as the “Employer Companies”);
 
(ii)                     conviction of any felony, crime involving fraud or
misrepresentation, or of any other crime the effect of which would adversely
affect any of the Employer Companies;
 
(iii)                    willful breach of Executive’s material obligations
under this Agreement, which breach (if curable) is not cured within 30 days
after written notice to Executive is provided by Employer;
 
(iv)                    repeated and consistent failure of Executive to be
present at work during normal business hours more frequently than executive’s
practice during his employment by the Company;
 
(v)                     willful violation of any express direction or any
material rule or regulation established by the Employer including, without
limitation, Employer’s Corporate Code of Business Conduct and Code of Ethics
which violation (if curable) is not cured within 30 days after written notice to
Executive is provided by Employer; or

 
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(vi)                    willful misconduct in the performance of, or willful
neglect of, Executive’s duties hereunder, which (if curable) is not cured within
30 days after written notice to Executive is provided by Employer.
 
Any notice required to be given by Employer pursuant to Sections 4.3(iii), (v)
or (vi) above shall state the specific nature of the claimed breach and, if such
breach is curable, the manner in which Employer reasonably requires such breach
(if curable) to be cured.

4.4                         Resignation for Good Reason; Termination without
Cause; Resignation without Good Reason.
 
(a)                      Prior to the end of the Initial Term, in the event (i)
Executive resigns for Good Reason (as defined below) or (ii) Employer terminates
Executive’s employment other than (A) for Cause as specified in Section 4.3, (B)
due to the death of Executive, or (C) due to the disability of Executive as
specified in Section 4.2, then Employer shall continue to pay on regularly
scheduled payroll dates Executive’s then current salary as severance payments
(the “Severance Payments”) commencing on the date provided below and continuing
until the number of salary installments remaining in the Initial Term are paid
(the “Severance Period”); provided, however, that the obligation to make
Severance Payments for Executive is subject to Executive’s execution and
non-revocation of a release of all employment and related claims against
Employer, and its officers, directors and stockholders.  Such release shall be
provided to Executive on or prior to the date of his termination of employment
(“Termination Date”) and must be executed on or before the 21st day following
receipt of such release.  Provided such release is not revoked within seven days
following execution, severance payments shall commence on the first regularly
scheduled payroll date following the 29th day after the Termination Date.  Each
salary installment payment shall be a separate payment for purposes of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”).  Termination
of employment for purposes of this Section 4.4 shall mean separation from
service as defined in Treas. Reg. section 1.409A-1(h).  The remedy in this
Section 4.4(a) shall be Executive’s sole remedy for the Employer’s termination
of Executive without Cause or Executive’s resignation for Good Reason.
 
(b)                      In the event that prior to the end of the Initial Term
(i) Executive resigns without Good Reason or (ii) Employer terminates
Executive’s employment (A) for Cause as specified in Section 4.3, (B) due to the
death of Executive, or (C) due to the disability of Executive as specified in
Section 4.2, then Executive shall not be eligible to receive any Severance
Payments.

 
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(c)                      As used herein, “Good Reason” shall mean the occurrence
of any of the following without Executive’s prior consent: (i) the Employer’s
breach of any material provision of this Agreement, (ii) a material reduction in
Executive’s Base Salary, (iii) a material change in the location of Executive’s
principal place of employment, provided that any relocation must exceed 30 miles
in the location or (iv) an assignment to Executive of any title or duties
materially inconsistent with his position, duties, responsibilities and status
with the Employer as set forth in this Agreement; provided, however, that in no
event shall Executive’s resignation be for “Good Reason” unless (A) an event or
circumstance set forth in clauses (i) through (iv) shall have occurred and
Executive provides the Employer with written notice thereof within 30 days after
the Executive has knowledge of the occurrence or existence of such event or
circumstance, which notice specifically identifies the event or circumstance
that Executive believes constitutes Good Reason, (B) the Employer fails to
substantially cure or correct the circumstance or event so identified within 30
days after receipt of such notice, and (C) the Executive resigns within 90 days
after the date of delivery of the notice referred to in clause (A) above.
 
(d)                      Notwithstanding anything to the contrary herein, if, on
the date that Executive’s employment terminates in accordance with Section
4.4(a), and the Employer or any entity considered to be a single employer with
the Employer as provided in Treas. Reg. section 1.409A-1(g) has stock which is
publicly traded on an established securities market or otherwise (separately or
jointly a “Publicly Traded Company”), then any Code Section 409A Severance Pay
Amounts, as defined below, shall not be made or commence to be made before the
first business day following the six-month anniversary of the Executive’s
Termination Date.  Any salary installment payments which are Code Section 409A
Severance Pay Amounts that otherwise would have been made in such six-month
period shall accumulate without interest and be paid in one lump sum on the
first business day following the six-month period.  To the extent severance
amounts to be paid to Executive prior to the six-month anniversary of his
Termination Date are not paid within a short-term deferral period as defined in
Treas. Reg. section 1.409A-1(b)(4) and to the extent not paid in a short-term
deferral period exceed two time the lesser of (i) the sum of the Executive’s
annualized compensation based upon his annual rate of pay for the calendar year
preceding the calendar year of his termination of employment (adjusted for any
increase during such year that was expected to continue indefinitely if such
termination of employment had not occurred) or (ii) the Code section 401(a)(17)
limit for the year in which termination of employment occurs, such amounts are
Code Section 409A Severance Payment Amounts.
 
SECTION 5.  RESTRICTIVE COVENANTS
 
5.1                         Confidentiality.
 
(a)                      Executive shall not, either during or after his
employment with Employer, directly or indirectly use, publish or otherwise
disclose or divulge to any third party any trade secrets, confidential or
proprietary information of any of the Employer Companies, other than as required
by law or in the ordinary course of Employer business (including without
limitation any such information concerning customers, vendors, services,
products, software, processes, pricing policies, business plans or records, any
technical or financial information or data, or any information relating to the
history or prospects of the Employer Companies or any of their stockholders).

 
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(b)                      Executive shall not, either during or after his
employment with Employer, directly or indirectly copy, reproduce or remove from
the premises of Employer, except in the ordinary course of Employer’s business,
trade secrets, confidential or proprietary information of Employer (in any
medium) or any documents, files or records of Employer (including without
limitation software, source code, program documentation, new product plans,
invoices, customer correspondence, business cards, orders, computer records, or
mailing, telephone or customer lists).  All such documents, files and records,
and all other memoranda, notes, files, records, lists and other documents made,
compiled or otherwise acquired by Executive in the course of his employment with
Employer are and shall remain the sole property of the Employer Companies and
all originals and copies thereof shall be delivered to the Employer Companies
upon termination of employment for whatever reason.
 
5.2                         Inventions and Discoveries.  The parties agree that
any idea, invention, design, discovery, development, technique, improvement,
source code, data or other work product related to Employer’s business as then
conducted, or as reasonably anticipated to be conducted (whether patentable or
subject to copyright, or not, and hereinafter collectively called “Discovery”),
that Executive has made or may make, discover, invent, develop or reduce to
practice during the term of his employment shall be the sole and complete
property of Employer.  The provisions of this Section shall also apply, to the
maximum extent permitted by Section 2870 of the California Labor Code, to
Discoveries that are conceived by Executive based  on knowledge acquired in the
course of Executive’s employment by the Company, Employer during or after
regular working hours, whether on or off the job, and whether or not within the
specific realm of Executive’s duties.  Executive agrees that he shall have no
proprietary interest in any work product developed or used by Executive and
arising out of his employment by Employer.  Executive shall upon receipt of
written demand from Employer, during the period of this Agreement and continuing
for a period of one year after the termination hereof for any cause, give,
grant, assign or transfer to Employer, any right, title or interest of Executive
in and to any Discovery without additional compensation to Executive.  To the
end that the provisions of this Section may be effectively carried out,
Executive agrees that he shall promptly and fully inform Employer of any
Discovery which he now has or may hereafter have, whereupon Employer shall, at
its own cost and expense, take such action as it may consider appropriate.  In
the event Employer determines to obtain copyright protection for any of
Executive’s work product, or to prepare and prosecute applications for letters
patents, whether in the United States or any foreign country, Executive shall,
at Employer’s sole expense, fully and completely cooperate with Employer as may
be reasonably required, including, but not limited to, assisting in the
preparation of all documents required to obtain patents or copyright protection
and in the enforcement by Employer of its rights to the Discoveries.
 
5.3                         Injunctive and Other Relief.  Executive acknowledges
and agrees that the covenants contained herein are fair and reasonable in light
of the consideration paid hereunder and in order to protect the investment made
by Employer in the Acquisition, and that damages alone shall not be an adequate
remedy for any breach by Executive of his covenants contained herein and
accordingly expressly agrees that, in addition to any other remedies which the
Employer Companies may have, including damages, the Employer Companies shall be
entitled to injunctive relief in any court of competent jurisdiction for any
breach or threatened breach of any such covenants by Executive.  Nothing
contained herein shall prevent or delay Employer from seeking, in any court of
competent jurisdiction, specific performance or other equitable remedies in the
event of any breach or intended breach by Executive of any of his obligations
hereunder.

 
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5.4                         Noncompetition.  In consideration of the
compensation to be paid to Executive, during the term of Executive’s employment,
Executive will not, directly or indirectly without the prior written consent of
Employer: (i) engage in, or (ii) control, advise, manage, assist, perform
services for, establish or open, or have any equity interest (other than
ownership of 1.0% or less of the outstanding stock of any corporation whose
securities are listed on any national securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended, or any successor law) in any firm, corporation, or business entity
(whether as an employee, officer, director, agent, security holder, creditor,
consultant or otherwise) that engages in any activity anywhere in the world
which is the same as, similar to, or competitive with the business of Employer.
 
5.5                         Nonsolicitation.  During the period beginning on the
date hereof and ending on the second anniversary of the termination of
Executive’s employment, the Executive will not (i) directly or indirectly
contact, approach, or solicit for the purpose of offering employment to or
hiring (whether as an employee, consultant, agent, independent contractor or
otherwise) any person employed by Employer or any of its affiliates at any time
before the termination of such employment, without the prior written consent of
Employer, or (ii) induce or attempt to induce any customer, vendor or other
business relation of Employer or any of its affiliates (A) into any business
relationship which might materially harm Employer or any of its affiliates or
(B) to refrain from doing business with Employer or any of its affiliates.
 
SECTION 6.  MISCELLANEOUS
 
6.1                         Prior Employment.  Executive represents and warrants
that he is not a party to any other employment, non-competition or other
agreement or restriction which could interfere with his employment with Employer
or Employer’s rights and obligations hereunder; and that his employment with
Employer and the performance of his duties hereunder will not breach the
provisions of any contract, agreement, or understanding to which he is party or
any duty owned by him to any other person.
 
6.2                         Severability.  The invalidity or unenforceability of
any particular provision or part of any provision of this Agreement shall not
affect the other provisions or parts hereof.  If any provision hereof is
determined to be invalid or unenforceable by a court of competent jurisdiction
by reason of the duration or geographical scope of the covenants contained
therein, such duration or geographical scope, or both, may be reduced to a
duration or geographical scope to the minimum extent necessary to cure such
invalidity.
 
6.3                         Assignment.  This Agreement shall not be assignable
by Executive, and shall be assignable by Employer to any person or entity which
may become a successor-in-interest (by purchase of assets or equity interests,
or by merger, or otherwise) to Employer.  Subject to the foregoing, this
Agreement and the rights and obligations set forth herein shall inure to the
benefit of, and be binding upon, the parties hereto and each of their respective
permitted successors, assigns, heirs, executors and administrators.

 
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6.4                         Notices.  All notices hereunder shall be in writing
and shall be sufficiently given if hand-delivered, sent by documented overnight
delivery service or registered or certified mail, postage prepaid, return
receipt requested or by facsimile (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or to such other person and/or at
such other address as may be furnished in writing by any party hereto to the
other.  Any such notice shall be deemed to have been given as to the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases.  Any and all service of process
and any other notice in any such action, suit or proceeding shall be effective
against any party if given as provided in this Agreement; provided, however,
that nothing herein shall be deemed to affect the right of any party to serve
process in any other manner permitted by law.
 
(a)                        If to Employer:
 
Kulicke and Soffa Industries, Inc.
1005 Virginia Drive
Fort Washington, Pennsylvania 19034
Attention:  General Counsel
Facsimile:  (215) 784-6001

With a copy (which shall not constitute notice) to:

Drinker Biddle & Reath LLP
1000 Westlakes Drive
Berwyn, PA 19312-2409
Attn:  Walter J. Mostek, Esq.
Telephone: (610) 993-2233
Facsimile:  (610) 993-8585

(b)                        If to Executive:
 
16700 Red Hill Avenue
Irvine, CA 92606-4802
Telephone: (949) 660-0440
Facsimile: (949) 660-8963

6.5                         Entire Agreement and Modification.  This Agreement
constitutes the entire agreement between the parties hereto with respect to the
matters contemplated herein and supersedes all prior agreements and
understandings with respect thereto (except with respect to Sections 5.4 and
5.5.  Any amendment, modification, or waiver of this Agreement shall not be
effective unless in writing.  Neither the failure nor any delay on the part of
any party to exercise any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of any right, remedy, power, or privilege
with respect to any other occurrence.
 
6.6                         Survival.  Section 5 (except for Section 5.4) shall
survive the termination of this Agreement.

 
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6.7                        Governing Law.  This Agreement is made pursuant to,
and shall be construed and enforced in accordance with, the internal laws of the
State of California, without giving effect to otherwise applicable principles of
conflicts of law.
 
6.8                         Headings; Counterparts.  The headings of paragraphs
in this Agreement are for convenience only and shall not affect its
interpretation.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which, when taken
together, shall be deemed to constitute but one and the same Agreement.
 
6.9                         Further Assurances.  Each of the parties hereto
shall execute such further instruments and take such other actions as any other
party shall reasonably request in order to effectuate the purposes of this
Agreement.
 
6.10                       Third Party Beneficiary.  The Employer Companies
shall be third party beneficiaries of this Agreement and shall have the right to
enforce the terms hereof against the Executive.
 
[Signature page follows]

 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

KULICKE & SOFFA INDUSTRIES, INC.
 
By:
/s/ Maurice Carson
Name: Maurice Carson
Title: Senior Vice President and Chief Financial Officer
   
EXECUTIVE
   
/s/ Jason Livingston
Jason M. Livingston

[signature page to Livingston Employment Agreement]

 

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