Exhibit 10(vi)
KULICKE AND SOFFA INDUSTRIES, INC.
1988 EMPLOYEE INCENTIVE STOCK OPTION
AND NON-QUALIFIED STOCK OPTION PLAN
(As Amended and Restated Effective October 8, 1996)
Section 1. Purpose
The purpose of the 1988 Employee Stock Option and Non-qualified
Stock Option Plan (the "Plan") of Kulicke and Soffa Industries,
Inc. (the "Company") is to encourage stock ownership by officers
and employees of the Company by issuing options to purchase
shares of the Company's stock ("Options," and individually an
"Option"), enabling such employees to acquire or increase their
proprietary interest in the Company and thereby encouraging them
to remain in the employ of the Company. The Options issued
pursuant to the Plan are intended to constitute either incentive
stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified
stock options, at the discretion of the Board of Directors at the
time of grant.
Section 2. Administration
The Plan will be administered by a Committee of the Board of
Directors (the "Committee"), appointed by the Board of Directors
(the "Board") of the Company. The Committee will consist of at
least three directors not employed by the Company who will serve
at the pleasure of the Board. The Committee will hold meetings
when a quorum is present at such times and places as it may
determine. A quorum shall consist of a majority of the
Committee. A majority of the Committee present and voting at a
meeting at which a quorum is present, or acts reduced to and
approved in writing by a majority of the members of the Committee
at any other time, will be valid acts of the Committee. The
Committee may, from time to time at its discretion, recommend to
the Board which, if any, officers and employees will be granted
Options, the type of Option to be granted, the amount of stock to
be subject to each such Option, and the option price of any non-
qualified stock option. Options shall be granted only by the
Board of Directors, provided that no member of the Board eligible
to receive options under the Plan shall participate in any action
of the Board with respect to the Plan.
The interpretation and construction by the Committee of any
provision of the Plan or of any Option granted under it will be
final unless otherwise determined by the Board. Anything herein
to the contrary notwithstanding, no member of the Board or the
Committee will be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under
it.
Section 3. Eligibility
Officers and employees of the Company and its majority owned
subsidiaries (as defined in section 424(f) of the Code)
("Subsidiaries") who are expected to make significant
contributions to the long term success of the Company are
eligible to receive incentive stock options or non-qualified
stock options under the Plan, as the Board may select from time
to time either on its own motion or from among those nominated by
the Committee. An officer or employee who is granted an Option
is an Optionee (which term also includes the Optionee's legal
representative under Section 5(g) hereof). An Optionee may be
granted more than one Option.
Section 4. Stock
The stock subject to an Option will be shares of the Company's
authorized but unissued or reacquired Common Stock, without par
value (the "Shares"). Options shall not be issued with respect
to more than 500,000 Shares, subject, however, to adjustment as
provided in Section 5(h) hereof.
Section 5. Terms and Conditions of Options
Each Option granted pursuant to the Plan will be authorized by
the Board and will be evidenced by an Option Notice in such form
as the Committee or the Board may from time to time determine.
Each Option Notice will include the information required in
subparagraphs (a), (b) and (c) of this Section 5 and will be in
conformity with and will incorporate by reference all other terms
and conditions of the Plan, including the following terms and
conditions:
(a) Number of Shares. The number of Shares subject to the
Option will be stated in the Option Notice.
(b) Option Price. The price per Share payable on the
exercise of the Option will be stated in the Option Notice and
(i) with respect to non-qualified stock options, will be at such
price as the Board of Directors shall determine; and (ii) with
respect to incentive stock options, will be at a price not less
than 100% of the fair market value per share of the outstanding
shares of Common Stock of the Company on the date the Option is
granted, without regard to any restriction other than a
restriction which will never lapse. So long as the Company's
Common Stock is quoted on NASDAQ, the fair market value, for the
purpose of compliance with the foregoing sentence with respect to
incentive stock options, shall be the representative closing
price of the stock as obtained from NASDAQ on the date of the
grant of the Option.
(c) Form of Option. The Option Notice will state whether
the Option granted is to be treated as an incentive stock option
or a non-qualified stock option, and will constitute a binding
determination as to the form of Option granted.
(d) Payment. The price payable on the exercise of the
Option in whole or in part will be equal to the Option price
multiplied by the number of Shares as to which the Option is
exercisable, and shall be paid in full upon exercise of any
Option, either in cash or by delivering to the Company shares of
the Company's Common Stock having a fair market value, as of the
close of business on the day preceding such delivery, equal to
the aggregate exercise price of the Shares being purchased on
exercise of the Options, or by a combination of such cash and
shares.
(e) Notwithstanding any other provision of this Plan:
(i) No option shall be granted under this Plan after
December 13, 1998.
(ii) No Option granted under this Plan shall be
exercisable later than ten years from the date of grant.
(iii) No Option granted to any Optionee shall be
treated as an incentive stock option under the Code, to the
extent such Option would cause the aggregate fair market value
(determined as of the date of grant of each such option) of the
Shares with respect to which incentive stock options are
exercisable by such Optionee for the first time during any
calendar year to exceed $100,000. For purposes of determining
whether an incentive stock option would cause the optionee to
exceed the $100,000 limitation, such incentive stock options
shall be taken into account in the order granted. For purposes
of this subsection, incentive stock options include all incentive
stock options under all plans of the Company and its Subsidiaries
that are incentive stock option plans within the meaning of
Section 422 of the Code.
(iv) Options granted pursuant to this Plan may be
exercised in any order elected by the Optionee whether or not the
Optionee holds any unexercised Options under this Plan or any
other Plan of the Company, its parent or any of its subsidiaries.
(v) No incentive stock option shall be granted under
this Plan to any person who, at the time of the grant of such
Option, owns stock possessing more than 10% of the total combined
voting power of all classes of the Company's stock, unless the
option price at the time the Option is granted is at least 110
percent (110%) of the fair market value of the stock, and subject
to the condition that the Option expires five years from the
option grant date.
(f) Term and Exercise of Options. Subject to the
provisions of Section 5(c)(i), (ii) and (v) hereof, Options
granted hereunder may be exercisable in whole or in part at such
time or times as the Board shall designate when granting such
Options.
No Option may be exercised for less than 25 shares or for any
fractional shares, unless such Option is exhausted upon its
exercise.
Unless sooner terminated as provided in this Plan, each Option
shall expire no later than ten years from the date of grant, and
shall be void and unexercisable thereafter. No incentive stock
option and, except as otherwise provided by the Board or the
Committee, no non-qualified stock option shall be assignable or
transferrable by the Optionee otherwise than by will or by the
laws of decent and distribution, and, subject to the preceding
clause, an Option may be exercised only by the Optionee and may
not be exercised by any other person except as provided in
Section 5(g) hereof.
(g) Termination of Options. Except as provided herein,
Options shall terminate when the option holder ceases to be
employed either by the Company or one of its Subsidiaries.
Upon the death of an Optionee while in the employ of the Company
or a Subsidiary, Options held by such Optionee which are
exercisable on the date of his or her death shall be exercisable
by his or her executor(s) or administrator(s) for a period of one
year from the date of such Optionee's death. Notwithstanding the
foregoing, with respect to Options granted on and after October
8, 1996, if an Optionee shall die while in the employ of the
Company or a Subsidiary and prior to the expiration date fixed
for his or her Option, such Option shall accelerate and may be
exercised, to the extent it remains unexercised on the date of
his or her death, by the Optionee'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 Optionee, at any time prior to the earlier of: (1) the
expiration date specified in such Option; or (2) one year after
the date of death.
Upon termination of an Optionee's employment with the Company or
a Subsidiary for any reason other than Cause, Options exercisable
by such Optionee on the date of termination of employment shall
be exercisable by the Optionee (or in the case of the Optionee's
death subsequent to termination of employment, by the Optionee's
executor(s) or administrator(s)), for a period of three months
from the date of such Optionee's termination of employment. With
respect to Options granted on or after October 8, 1996, the
preceding sentence shall apply in the event of termination of
employment for any reason other than death, disability,
Retirement or Cause.
Upon the termination of an Optionee's employment for Cause, all
Options held by such Optionee shall terminate concurrently with
receipt by the Optionee of oral or written notice that his or her
employment has been terminated. For the 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.
With respect to Options granted on or after October 8, 1996, if
an Optionee shall become disabled (within the meaning of section
22(e)(3) of the Code) 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
Optionee 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 an Optionee's
legal disability, such Option may be so exercised by the
Optionee's legal representative.
With respect to Options granted on or after October 8, 1996, if
an Optionee'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 Optionee 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 Retirement. For purposes of
this Plan, Retirement shall mean an Optionee's retirement from
the Company and its Subsidiaries at or after age 65, or before
age 65 if expressly agreed to by the Company.
Options may be terminated at any time by agreement between the
Company and the Optionee.
(h) Recapitalization. Subject to any required action by
the stockholders, if any, the number of Shares as to which
Options may be granted under this Plan and the number of Shares
subject to outstanding options and the option prices thereto will
be adjusted proportionately for any increase or decrease in the
number of outstanding shares of Common Stock of the Company
resulting from stock splits and reverse stock splits, but not for
stock dividends. The number of shares will be adjusted to the
nearest whole share. Any stock dividend resulting in an increase
of 20% or more in the outstanding Common Stock shall be deemed a
stock split.
If the Company is a party to any merger in which the Company is
not the surviving entity, any consolidation or dissolution (other
than the merger or consolidation of the Company with one or more
of its wholly-owned Subsidiaries), all Options outstanding
hereunder shall terminate (1) in the case of such a merger or
consolidation, on the date that such merger or consolidation
becomes effective, and (2) in the case of dissolution, on the
date that the Articles of Election to Dissolve are filed with the
Secretary of the Commonwealth of Pennsylvania. If Options are
terminated pursuant to the provisions of the foregoing sentence,
Optionees shall receive in cash from the Company an amount equal
to the fair market value of the Shares which are subject to then
exercisable Options, determined as of the close of business on
the day preceding the event cancelling all outstanding Options
under this Plan, less the amount which would be required to
exercise the then exercisable Options. Optionees shall have no
rights to compensation or other consideration with respect to the
cancellation of Options not subject to exercise on the date of
cancellation.
Except as expressly provided above in this Section 5(h), the
Optionee will have no rights by reason of (1) any subdivision or
consolidation of shares of stock of any class of the Company; (2)
payment of any stock dividend by the Company; (3) any other
increase or decrease in the number of shares of stock of any
class of the Company; or (4) by reason of any dissolution,
liquidation, merger, consolidation or spin-off of assets or stock
of another corporation.
The grant or existence of any Option shall not affect in any way
the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes of its capital or
business structure, or to merge, consolidate, dissolve,
liquidate, sell or transfer all or any part of its stock or
assets.
(i) Rights as a Stockholder. The Optionee will have no
rights as a stockholder of the Company with respect to any Shares
subject to an Option until such Option has been exercised and a
certificate with respect to the Shares purchased upon exercise
has been issued to him or her. No adjustment will be made for
dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the
record date is prior to the date the Shares so purchased have
been issued.
(j) Modification, Extension and Renewal of Option.
Subject to the terms and conditions of the Plan, the Board may
modify, extend or renew an Option, or accept the surrender of an
Option (to the extent not theretofore exercised).
Notwithstanding the foregoing, no modification of an Option which
adversely affects the Optionee shall be made without the consent
of the Optionee.
(k) Purchase for Investment. The issuance of Shares on
exercise of the Option will be conditioned on obtaining
appropriate representations and warranties of the Optionee that
the purchase of Shares thereunder will be for investment, and not
with a view to the public resale or distribution thereof, unless
the Shares subject to the Option are registered under the
Securities Act of 1933, as amended (the "Act"), and comply with
any other law, regulation or rule applicable thereto. Unless the
Shares are registered under the Act, the Optionee shall
acknowledge that the Shares purchased on exercise of the Option
are not registered under the Act and may not be sold or otherwise
transferred unless the Shares have been registered under the Act
in connection with the sale or other transfer, or that counsel
satisfactory to the Company is of the opinion that the sale or
other transfer is exempt from registration under the Act, and
unless said sale or transfer is in compliance with any other
applicable law, including all applicable state securities laws.
(l) No Rights to Employment. Officers or employees
granted Options under this Plan shall not have any right to
continue in the employment of the Company or any Subsidiary by
nature of the existence of such Options. An Optionee whose
employment is terminated shall have no rights against the Company
by reason of the termination of such Option whether the
termination of the employment be with or without Cause.
(m) Other Provisions. The Option Notice may contain such
other provisions as the Board in its discretion deems advisable
and which are not inconsistent with the provisions of this Plan,
including, without limitation, restrictions upon the exercise of
the Option.
Section 6. Term of Plan
Options may be granted from time to time within a period of ten
years from the date the Plan is effective as described in Article
10 hereof.
Section 7. Amendment of the Plan
Insofar as permitted by law and the Plan, the Board may from time
to time suspend or discontinue the Plan or revise or amend it in
any respect whatsoever with respect to any Shares at the time not
subject to an Option; provided, however, that without approval of
the stockholders, no such revision or amendment may change the
aggregate number of Shares for which options may be granted
hereunder, change the designation of the class of employees
eligible to receive Options, decrease the price at which Options
may be granted, remove the administration of the Plan from the
Committee, or render any member of the Committee eligible to
receive an Option under the Plan while serving thereon.
Any other provision of this Section 7 notwithstanding, the Board
specifically is authorized to adopt any amendment to this Plan
deemed by the Board to be necessary or advisable to assure that
the incentive stock options or the non-qualified stock options
available under the Plan continue to be treated as such,
respectively, under the law.
Section 8. Application of Funds
The proceeds received by the Company from the sale of Shares
pursuant to the exercise of Options will be used for general
corporate purposes.
Section 9. No Obligation to Exercise Option
The granting of an Option will impose no obligation upon the
Optionee to exercise such Option.
Section 10. Approval of Stockholders
This Plan shall become effective on the date that it is adopted
by the Board, provided, however, that it shall become null and
void if it is not approved by a majority of the holders of the
Company's Common Stock present in person or by proxy at a meeting
held within one year (365 days) of its adoption by the Board.
The Board may grant Options hereunder prior to approval of the
Plan by the holders of such a majority of the Common Stock;
provided, however, that no Option so granted shall be exercisable
within 365 days of the date of the adoption of the Plan, and all
Options so granted shall terminate and become null and void if
the Plan is not approved by a majority of the holders of the
Company's Common Stock present in person or by proxy at a meeting
of the shareholders held within 365 days of its adoption by the
Board.
Date Plan adopted by Board of Directors: December 6, 1988