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                                                                Exhibit 10(xxvi)

                       KULICKE AND SOFFA INDUSTRIES, INC.
                  1999 NONQUALIFIED EMPLOYEE STOCK OPTION PLAN
                         (Effective September 28, 1999)

                                    Article 1
                                     Purpose

       This KULICKE AND SOFFA INDUSTRIES, INC. 1999 NONQUALIFIED EMPLOYEE STOCK
OPTION PLAN ("Plan") is intended to provide a means whereby KULICKE AND SOFFA
INDUSTRIES, INC. ("Company") and any Subsidiary (as hereinafter defined) may,
through the grant of nonqualified stock options ("Options") to Employees (as
defined in Section 3), attract and retain Employees and motivate such Employees
to exercise their best efforts on behalf of the Company and of any Subsidiary.

       The term "Subsidiary" means any corporation (whether or not in existence
at the time the Plan is adopted) which, at the time an Option is granted, is a
subsidiary of the Company under the definition of "subsidiary corporation"
contained in section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). The term Subsidiary shall also mean any trade or business (whether
or not incorporated and whether or not in existence at the time the Plan is
adopted) in which, at the time the Option is granted, the Company owns a more
than 50% equity interest.

                                    Article 2
                                 Administration

       The Plan shall be administered by the Company's Compensation Committee
("Committee"), which shall consist solely of not fewer than two (2)
"non-employee directors" (within the meaning of Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934, or any successor thereto) of the Company who
are also "outside directors" (within the meaning of Treas. Reg.
(S)1.162-27(e)(3), or any successor thereto), who shall be appointed by, and
shall serve at the pleasure of, the Company's Board of Directors ("Board"). Each
member of such Committee, while serving as such, shall be deemed to be acting in
his or her capacity as a director of the Company.

       The Committee shall have full and final authority in its absolute
discretion, subject to the terms of the Plan, to select the persons to be
granted Options under the Plan, to grant Options on behalf of the Company, and
to set the date of grant and the other terms of such Options. The Committee may
correct any defect, supply any omission and reconcile any inconsistency in the
Plan and in any Option granted hereunder in the manner and to the extent it
shall deem desirable. The Committee also shall have the authority to establish
such rules and regulations, not inconsistent with the provisions of the Plan,
for the proper administration of the Plan, and to amend, modify or rescind any
such rules and regulations, and to make such determinations and interpretations
under, or in connection with, the Plan, as it deems necessary or advisable. All
such rules, regulations, determinations and interpretations shall be binding and
conclusive upon the Company, its Subsidiaries and shareholders and all officers
and employees and former officers and employees, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them. The Committee may employ a
third-party administrator to assist in administration of the Plan.

       No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option granted
hereunder.

                                    Article 3
                                   Eligibility

       The class of employees who shall be eligible to receive Options under the
Plan shall be the

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employees, excluding officers and directors, of the Company or of a Subsidiary
("Employees"). More than one Option may be granted to an Employee under the
Plan.

                                    Article 4
                                      Stock

       The number of shares of common stock of the Company, no par value
("Common Shares"), that may be subject to Options under the Plan shall be
500,000 shares, subject to adjustment as hereinafter provided. Shares issuable
under the Plan may be authorized but unissued shares or reacquired shares, as
the Company may determine from time to time. Any Common Shares subject to an
Option which expires or otherwise terminates for any reason whatever (including,
without limitation, the Employee's surrender thereof) without having been
exercised shall continue to be available for the granting of Options under the
Plan.

                                    Article 5
                                     Options

A.  Granting of Options. From time to time until the expiration or earlier
    suspension or discontinuance of the Plan, the Committee may, on behalf of
    the Company, grant to Employees under the Plan such Options as it determines
    are warranted, subject to the limitations of the Plan. The granting of an
    Option under the Plan shall not be deemed either to entitle the Employee to,
    or to disqualify the Employee from, any participation in any other grant of
    Options under the Plan. In making any determination as to whether an
    Employee shall be granted an Option and as to the number of shares to be
    covered by such Option, the Committee shall take into account the duties of
    the Employee, the Committee's views as to his or her present and potential
    contributions to the success of the Company or a Subsidiary, and such other
    factors as the Committee shall deem relevant in accomplishing the purposes
    of the Plan. Moreover, the Committee may determine that the Grant Letter (as
    defined below) shall provide that said Option may be exercised only if
    certain conditions, as determined by the Committee, are fulfilled.

B.  Terms and Conditions of Options. The Options granted pursuant to the Plan
    shall include expressly or by reference the following terms and conditions,
    as well as such other provisions not inconsistent with the provisions of
    this Plan as the Committee shall deem desirable:

1.  Number of Shares. A statement of the number of Common Shares to which the
    Option pertains.

2.  Price. A statement of the Option exercise price, which shall be determined
    and fixed by the Committee in its discretion at the time of grant, but shall
    not be less than 100% of the Fair Market Value of the optioned Common Shares
    on the date the Option is granted. The term "Fair Market Value" shall mean
    the value of the Common Shares arrived at by a good faith determination of
    the Committee and shall be:

(1)                                          The quoted closing price, if there
    is a market for and there are sales of Common Shares on a registered
    securities exchange or in an over the counter market, on the date specified;

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(2)                                 The weighted average of the quoted closing
    prices on the nearest date before and the nearest date after the specified
    date, if there are no sales of Common Shares on the specified date but there
    are such sales on dates within a reasonable period both before and after the
    specified date;

(3)                                 The mean between the bid and asked prices,
    as reported by the National Quotation Bureau on the specified date, if
    actual sales are not available during a reasonable period beginning before
    and ending after the specified date; or

(4)                                 Such other method of determining Fair Market
    Value as shall be authorized by the Code, or the rules or regulations
    thereunder, and adopted by the Committee.

                Where the Fair Market Value of Common Shares is determined under
(B) above, the average of the closing prices on the nearest sales date before
and the nearest date after the specified date shall be weighted inversely by the
respective numbers of trading days between the dates of reported sales and the
specified date (i.e., the valuation date), in accordance with Treasury
Regulation (S) 20.2031-2(b)(1), or any successor thereto, under the Code.

3.  Term. Subject to earlier termination as provided in Subsections (5) through
    (8) below, the term of each Option shall be not more than 10 years from the
    date of grant, unless otherwise provided in the applicable Grant Letter.

4.  Exercise.

(1)                                 General. Options shall be exercisable in
    such installments and on such dates, commencing not less than 12 months from
    the date of grant, as the Committee may specify, provided that:

(a)                   In the case of new Options granted to an Employee in
    replacement for options (whether granted under this Plan or otherwise) held
    by the Employee, the new Options may be made exercisable, if so determined
    by the Committee, in its discretion, at the earliest date the replaced
    options were exercisable; and

(b)                   The Committee may accelerate the exercise date of any
    outstanding Options in

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    its discretion, if it deems such acceleration to be desirable.

                Any Common Shares the right to the purchase of which has accrued
under an Option may be purchased at any time up to the expiration or termination
of the Option. Exercisable Options may be exercised, in whole or in part, from
time to time by giving written notice of exercise to the Company at its
principal office, specifying the number of Common Shares to be purchased and
accompanied by payment in full of the aggregate Option exercise price for such
shares (or by following any other procedure prescribed for this purpose by the
Committee or its appointed third-party administrator). Options may not be
exercised in installments of less than ten shares, unless such Option is
exhausted upon its exercise. Only full shares shall be issued under the Plan,
and any fractional share which might otherwise be issuable upon the exercise of
an Option granted hereunder shall be forfeited.

(2)                                 Manner of Payment. The Option price shall be
    payable in cash or its equivalent.

5.  Termination of Employment. If an Employee's employment by the Company (and
    Subsidiaries) is terminated by either party prior to the expiration date
    fixed for his or her Option for any reason other than death, disability,
    Retirement or Cause (as hereinafter defined), such Option may be exercised,
    to the extent of the number of shares with respect to which the Employee
    could have exercised it on the date of such termination, or to any greater
    extent permitted by the Committee, by the Employee at any time prior to the
    earlier of:

(1)                                 The expiration date specified in such
    Option; or

(2)                                 Three months after the date of such
    termination of employment.

                If an Employee's employment by the Company (and Subsidiaries) is
terminated for Cause, all Options held by the Employee shall terminate
concurrently with receipt by the Optionee of oral or written notice that his or
her employment has been terminated. For purposes of this Plan, termination for
Cause shall include termination by reason of any dishonest or illegal act, or
any willful refusal or failure to perform duties properly assigned.

6.  Exercise upon Retirement of Employee. If an Employee' s employment is
    terminated prior to the expiration date fixed for his or her Option by
    reason of Retirement (as hereinafter defined), such Option shall accelerate
    and may be exercised, to the extent it remains unexercised on the date of
    such Retirement, by the Employee at any time prior to the earlier of:

(1)                                 The expiration date specified in such
    Option; or

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(2)                                 One year after the date of such Retirement.

                For purposes of this Plan, Retirement shall mean an Employee's
retirement from the Company or one of its Subsidiaries at or after the customary
retirement age for the Employee's country (as determined by the Company, in its
sole discretion), or before such age if expressly agreed to by the Company.

7.  Exercise upon Disability of Employee. If an Employee shall become disabled
    (within the meaning of any applicable short-term disability or long-term
    disability program of the Company or a Subsidiary, or as otherwise
    determined by the Committee) during his or her employment and, prior to the
    expiration date fixed for his or her Option, his or her employment is
    terminated as a consequence of such disability, such Option shall accelerate
    and may be exercised, to the extent it remains unexercised on the date of
    such termination, by the Employee at any time prior to the earlier of:

(1)                                 The expiration date specified in such
    Option; or

(2)                                 One year after the date of such termination
    of employment.

                In the event of the Employee's legal disability, such Option may
be so exercised by the Employee's legal representative.

8.  Exercise upon Death of Employee. If an Employee shall die during his or her
    employment and prior to the expiration date fixed for his or her Option, or
    if an Employee whose employment is terminated for any reason shall die
    following his or her termination of employment but prior to the earliest of:

(1)                                 The expiration date fixed for his or her
    Option;

(2)                                 The expiration of the period determined
    under Subsections (5), (6) (if applicable), and (7) above;

his or her Option shall accelerate and may be exercised, to the extent it
remains unexercised on the date of his or her death, by the Employee's estate,
personal representative or beneficiary who acquired the right to exercise such
Option by bequest or inheritance or by reason of the death of the Employee, at
any time prior to the earlier of:

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(a)             The expiration date specified in such Option; or

(b)             One year after the date of death.

9.  Rights as a Shareholder. An Employee shall have no rights as a shareholder
    with respect to any shares covered by his or her Option until the issuance
    of a stock certificate to him or her for such shares.

C.  Grant Letters. Options granted under the Plan shall be evidenced by written
    documents ("Grant Letters") in such form as the Committee shall, from time
    to time, approve, which Grant Letters shall contain such provisions, not
    inconsistent with the provisions of the Plan, for Options granted pursuant
    to the Plan as the Committee shall deem advisable. Each Employee shall be
    bound by the terms of the Grant Letter.

                                    Article 6
                               Capital Adjustments

       The number of shares which may be issued under the Plan, as stated in
Section 4 hereof, and the number of shares issuable upon exercise of outstanding
Options under the Plan (as well as the Option exercise price per share under
such outstanding Options) shall, subject to the provisions of section 424(a) of
the Code, be adjusted, as may be deemed appropriate by the Committee, to reflect
any stock dividend, stock split, share combination, or similar change in the
capitalization of the Company.

       In the event of a corporate transaction (as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), each outstanding Option shall be
assumed by the surviving or successor corporation; provided, however, that in
the event of a proposed corporate transaction, the Committee may terminate all
or a portion of the outstanding Options if it determines that such termination
is in the best interests of the Company. If the Committee decides to terminate
outstanding Options, the Committee shall give each Employee holding an Option to
be terminated not less than ten days' notice prior to any such termination by
reason of such a corporate transaction, and any such Option which is to be so
terminated shall become fully exercisable and may be exercised up to, and
including the date immediately preceding such termination.

       The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such corporate transaction.

                                    Article 7
                                Change in Control

       All Options shall become fully vested and exercisable upon a Change in
Control of the Company. "Change in Control" shall mean any of the following
events:

A.  An acquisition (other than directly from the Company) of any voting
    securities of the Company

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    ("Voting Securities") by any "Person" (as such term is used for purposes of
    section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
    (the "1934 Act")) immediately after which such Person has "Beneficial
    Ownership" (within the meaning of Rule 13d-3 promulgated under the 1934 Act)
    of 50% or more of the combined voting power of all then outstanding Voting
    Securities, provided, however, that any such acquisition approved by
    two-thirds of the Incumbent Board (as hereinafter defined) shall not be
    deemed to be a Change in Control;

B.  The individuals who, as of September 28, 1999, are members of the Company's
    Board of Directors (the "Incumbent Board") cease for any reason to
    constitute at least two-thirds of the Board of Directors; provided, however,
    that if the election, or nomination for election by the shareholders, of any
    new director was approved by a vote of at least two-thirds of the members of
    the Board of Directors who constitute Incumbent Board members, such new
    directors shall for all purposes be considered as members of the Incumbent
    Board as of September 28, 1999; provided further, however, that no
    individual shall be considered a member of the Incumbent Board if such
    individual initially assumed office as a result of either an actual or
    threatened "Election Contest" (as described in Rule 14a-11 promulgated under
    the 1934 Act) or other actual or threatened solicitation of proxies or
    consents by or on behalf of a Person other than the Board of Directors (a
    "Proxy Contest") including by reason of any agreement intended to avoid or
    settle any Election Contest or Proxy Contest;

C.  Approval by shareholders of the Company of (1) a merger or consolidation
    involving the Company if the shareholders of the Company immediately before
    such merger or consolidation do not own, directly or indirectly, immediately
    following such merger or consolidation more than 50% of the combined voting
    power of the outstanding Voting Securities of the corporation resulting from
    such merger or consolidation in substantially the same proportion as their
    ownership of the Voting Securities immediately before such merger or
    consolidation or (2) a complete liquidation or dissolution of the Company or
    an agreement for the sale or other disposition of all or substantially all
    of the assets of the Company; or

D.  Acceptance of shareholders of the Company of shares in a share exchange if
    the shareholders of the Company immediately before such share exchange do
    not own, directly or indirectly, immediately following such share exchange
    more than 50% of the combined voting power of the outstanding Voting
    Securities of the corporation resulting from such share exchange in
    substantially the same proportion as their ownership of the Voting
    Securities outstanding immediately before such share in exchange
    substantially the same proportion as their ownership of the Voting
    Securities outstanding immediately before such share exchange.

                                   Article 8
                     Amendment or Discontinuance of the Plan

       At any time and from time to time, the Board may unilaterally suspend or
terminate the Plan or amend it, and the Committee may amend any outstanding
Options, in any respect whatsoever, provided, however, that no such suspension,
discontinuance or amendment shall materially impair the rights of any holder of
an outstanding Option without the consent of such holder.

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                                    Article 9
                               Termination of Plan

       Unless earlier terminated as provided in the Plan, the Plan and all
authority granted hereunder shall terminate absolutely at 12:00 midnight on
September 27, 2009, which date is within ten years after the date the Plan was
adopted by the Board, and no Options hereunder shall be granted thereafter.
Nothing contained in this Section 9, however, shall terminate or affect the
continued existence of rights created under Options issued hereunder and
outstanding on September 27, 2009 which by their terms extend beyond such date.

                                   Article 10
                                 Effective Date

       This Plan became effective on September 28, 1999 (the date the Plan was
adopted by the Board).

                                   Article 11
                                  Miscellaneous

A.  Governing Law. The Plan and the Grant Letters entered into, and the Options
    granted thereunder, shall be governed by the applicable Code provisions to
    the maximum extent possible. Otherwise, the operation of, and the rights of
    Employees under, the Plan, the Grant Letters, and the Options shall be
    governed by applicable United States federal law and otherwise by the laws
    of the Commonwealth of Pennsylvania.

B.  Rights. Neither the adoption of the Plan nor any action of the Board or the
    Committee shall be deemed to give any individual any right to be granted an
    Option, or any other right hereunder, unless and until the Committee, in its
    sole discretion, shall have granted such individual an Option, and then his
    or her rights shall be only such as are provided by this Plan and the Grant
    Letter.

       Any Option under the Plan shall not entitle the holder thereof to any
rights as a shareholder of the Company prior to the exercise of such Option and
the issuance of the shares pursuant thereto. Further, notwithstanding any
provisions of the Plan or any Grant Letter with an Employee, the Company shall
have the right, in its discretion, to retire an Employee at any time pursuant to
its retirement rules or otherwise to terminate his or her employment at any time
for any reason whatsoever.

C.  No Obligation to Exercise Option. The granting of an Option shall impose no
    obligation upon an Employee to exercise such Option.

D.  Non-Transferability. Except as otherwise provided by the Committee, no
    Option shall be assignable or transferable by the Employee otherwise than by
    will or by the laws of descent and distribution, and subject to the
    preceding clause, during the lifetime of the Employee, any Options shall be
    exercisable only by him or her or by his or her guardian or legal
    representative. If an Employee is married at the time of exercise of an
    Option and if the Employee so requests at the time of exercise, the
    certificate or certificates issued shall be registered in the name of the
    Employee and the Employee's spouse, jointly, with right of survivorship.

E.  Withholding to Satisfy Tax Obligations. The obligation of the Company to
    deliver Common Shares

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    to an Employee pursuant to any Option under the Plan shall be subject to
    applicable tax withholding requirements.

F.  Listing and Registration of Shares. Each Option shall be subject to the
    requirement that, if at any time the Committee shall determine, in its
    discretion, that the listing, registration or qualification of the shares
    covered thereby upon any securities exchange or under any state or federal
    law, or the consent or approval of any governmental regulatory body, is
    necessary or desirable as a condition of, or in connection with, the
    granting of such Option or the purchase or vesting of shares thereunder, or
    that action by the Company or by the Employee should be taken in order to
    obtain an exemption from any such requirement, no such Option may be
    exercised, in whole or in part, unless and until such listing, registration,
    qualification, consent, approval, or action shall have been effected,
    obtained, or taken under conditions acceptable to the Committee. Without
    limiting the generality of the foregoing, each Employee or his or her legal
    representative or beneficiary may also be required to give satisfactory
    assurance that shares purchased upon exercise of an Option are being
    purchased for investment and not with a view to distribution, and
    certificates representing such shares may be legended accordingly.