Exhibit 10.3
KULICKE AND SOFFA INDUSTRIES, INC.
2009 EQUITY PLAN

Performance Share Unit Award Agreement

This Performance Share Unit Award Agreement (the “Agreement”) between Kulicke
and Soffa Industries, Inc. (the “Company”) and Christian Rheault (the
“Participant”) pursuant to the Kulicke and Soffa 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.

 
 

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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.

 
 

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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 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.
 

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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.

KULICKE AND SOFFA INDUSTRIES, INC.
   
By:
/s/ David J. Anderson
Name:
    David J. Anderson
Title:
    VP & General Counsel
   
By:
/s/ Christian Rheault
 
 Participant
Date:
January 28, 2010

 
 
 

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Exhibit 10.3       

Appendix A
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Kulicke & Soffa 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 & Soffa 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
 
October 1, 2009 to September 30, 2012
Vesting
 
3-year cliff vest on September 30, 2012
Peer Companies
 
Philadelphia Semiconductor Index (SOXX) companies at grant
Target Performance
 
Median of the Peer Companies
Payout Range
 
0% to 200% of Target Performance
Stock Averaging Period
 
90 calendar days

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
 
National Semiconductor Corporation
Applied Materials, Inc
 
Novellus Systems
Advanced Micro Devices, Inc
 
SanDisk Corporation
Broadcom Corporation
 
STMicroelectronics N.V.
Intel Corporation
 
Teradyne
KLA-Tencor Corporation
 
Taiwan Semiconductor Manufacturing Co.
Linear Technology Corporation
 
Texas Instruments, Inc
Marvell Technology Inc
 
MEMC Electronic Materials
Micron Technology Inc
 
Xilinx, Inc

The Peer Companies may change over the Performance Period as follows:
 
·
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.

 
·
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.

 
·
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.

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.

 
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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
 
Payout
 
99th
        200 %
95th
    190 %
90th
    180 %
85th
    170 %
80th
    160 %
75th
    150 %
70th
    140 %
65th
    130 %
60th
    120 %
55th
    110 %
Median 50%
    100 %
45th
    90 %
40th
    80 %
35th
    70 %
30th
    60 %
25th
    50 %
<25th
    0 %

 
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