<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
KULICKE AND SOFFA INDUSTRIES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________________
3) Filing Party:
______________________________________________________________________
4) Date Filed:
______________________________________________________________________
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
[Kulicke and Soffa Industries, Inc. logo]
2101 Blair Mill Road, Willow Grove, PA 19090
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 13, 1996
___________________
The Annual Meeting of Shareholders of Kulicke and Soffa
Industries, Inc. (the "Company") will be held on Tuesday, February 13,
1996, at 4:30 p.m. at the offices of the Company, 2101 Blair Mill
Road, Willow Grove, Pennsylvania, for the following purposes:
1. Election of directors;
2. Ratification of the appointment of Price Waterhouse LLP as the
Company's independent accountants for the year ending
September 30, 1996; and
3. Transaction of such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on
December 15, 1995 as the record date for the determination of holders
of Common Shares entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the meeting, but
whether or not you expect to attend the meeting in person, please sign
and date the enclosed proxy and return it promptly in order that your
stock may be voted. If you attend the meeting, you may revoke your
proxy and vote in person.
By Order of the Board of Directors
SUSAN WATERS
Secretary
January 9, 1996
<PAGE>
[Kulicke and Soffa Industries, Inc. logo]
2101 Blair Mill Road, Willow Grove, PA 19090
_______________
PROXY STATEMENT
_______________
January 9, 1996
The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy is revocable at any time prior to its use by delivering a subsequently
executed proxy or written notice of revocation to the Secretary of the Company.
The Board of Directors has fixed the close of business on December 15, 1995
as the record date for determination of the shareholders entitled to vote at the
Annual Meeting. As of the record date, there were 19,315,450 Common Shares
outstanding. Each such share is entitled to one vote on all matters to be
presented to the meeting, except that cumulative voting is permitted in the
election of directors. See "ELECTION OF DIRECTORS." This proxy statement and the
enclosed proxy are being mailed on or about January 9, 1996.
The only persons or groups of persons shown by the Company's latest records
to own of record, or by Securities and Exchange Commission ("SEC") records to
own beneficially, more than 5% of the outstanding Common Shares of the Company
are as follows:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES CLASS
- - ---------------- --------- ----------
<S> <C> <C>
Target Investors, Inc. ............................. 1,143,900 5.9%
15 River Road
Wilton, CT 06897
Gardiner Lewis Asset Management..................... 1,016,300 5.3%
285 Wilmington-West Chester Pike
Chadds Ford, PA 19317
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors currently consists of eight directors, divided into
four classes of two directors each. The Board intends to cause Messrs. Frederick
W. Kulicke, Jr. and Larry D. Striplin, Jr., the members of the class whose terms
expire at the 1996 Annual Meeting, to be nominated for re-election at the 1996
Annual Meeting to serve until the 2000 Annual Meeting and until their successors
have been duly elected and qualified. Each shareholder who so chooses may
multiply the number of votes the shareholder is entitled to cast by the total
number of directors to be elected (i.e., two) and cast the whole number of votes
for one candidate or distribute them among some or all candidates. The proxy
agents reserve the right to vote the proxies cumulatively, if necessary, in
order that one or both of Messrs. Kulicke and Striplin will be re-elected to the
Board of Directors. If either of the nominees should be unavailable at the time
of the election, the persons named in the proxy may vote the proxies for such
other persons as they may choose, unless the Board of Directors reduces the
number of the directors to be elected.
Assuming a quorum is present, the two nominees receiving the highest number
of votes cast at the annual meeting will be elected directors. For such
purposes, the withholding of authority to vote or the specific direction not to
cast a vote, such as a broker non-vote, will not constitute the casting of a
vote in the election of directors.
The following table provides certain information concerning (i) Messrs.
Kulicke and Striplin, (ii) the persons whose terms as directors will continue
after the Annual Meeting, and (iii) the executive officers named in the Summary
Compensation Table herein, including their ages, principal occupations and, as
of November 30, 1995, beneficial shareholdings. Each of the persons listed below
has sole voting and investment power with respect to the beneficial
shareholdings set forth, unless otherwise indicated.
<TABLE>
<CAPTION>
PRESENT COMMON SHARES
DIRECTOR TERM BENEFICIALLY OWNED
NAME, AGE AND OCCUPATION SINCE EXPIRES ON NOVEMBER 30, 1995
- - ------------------------ -------- ------- --------------------
NUMBER PERCENT
------ -------
<S> <C> <C> <C> <C>
James W. Bagley (56), 1993 1999 11,000/(1)/ /(2)/
Vice Chairman of the Board of
Directors of Applied Materials,
Inc., the largest supplier of
wafer fabrication systems to the
semiconductor industry. Director
of Tencor Instruments, a
manufacturer of wafer defect
inspection and metrology systems,
and of Extraction Systems, Inc.,
a manufacturer of carbon filters.
C. Scott Kulicke (46), 1975 1999 585,661/(3)/ 3.0
Chairman of the Board and Chief
Executive Officer of the Company.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PRESENT COMMON SHARES
DIRECTOR TERM BENEFICIALLY OWNED
NAME, AGE AND OCCUPATION SINCE EXPIRES ON NOVEMBER 30, 1995
- - ------------------------ -------- ------- --------------------
NUMBER PERCENT
------ -------
<S> <C> <C> <C> <C>
Frederick W. Kulicke, Jr. (78), 1956 1996 -- --
retired co-founder of the
Company, Co-Chairman of the
Board of Directors and senior
executive officer from 1951
until his retirement in 1979.
Father of C. Scott Kulicke.
John A. O'Steen (51), 1988 1998 8,000/(4)/ /(2)/
Chairman and Chief Executive
Officer of Cinmar, L.P., a mail
order catalog company since 1991.
Formerly, President, Chief
Executive Officer and a
director of Cincinnati Micro-
wave, Inc., a manufacturer of
electronic products.
Allison F. Page (72), 1962 1997 5,520/(5)/ /(2)/
retired partner in the Philadelphia
law firm of Pepper, Hamilton &
Scheetz.
MacDonell Roehm, Jr. (56), 1984 1998 7,000/(5)/ /(2)/
Chairman, President and Chief
Executive Officer of Bill's Dollar
Stores, Inc., a chain of retail
convenience stores, since 1994.
Formerly, Managing Director of
AEA Investors, Inc., a private
investment firm.
Larry D. Striplin, Jr. (66), 1995 1996 21,000 /(2)/
Chairman of the Board and Chief
Executive Officer of Nelson-Brantley
Glass Contractors, Inc., a glass
contractor, and Clearview Properties, a real
estate rental company. Chairman of Circle "S"
Industries, Inc. and AFW (as defined) prior
to their acquisition by the Company.
Director of Capstone Capital
Corporation, a real estate trust, and
MedPartners/Mullikin, Inc., a physician
practice management company. Mr. Striplin
was elected a director of the Company by
the Board on December 12, 1995.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRESENT COMMON SHARES
DIRECTOR TERM BENEFICIALLY OWNED
NAME, AGE AND OCCUPATION SINCE EXPIRES ON NOVEMBER 30, 1995
- - ------------------------ -------- ------- --------------------
NUMBER PERCENT
------ -------
<S> <C> <C> <C> <C>
C. William Zadel (52), 1989 1997 5,000/(5)/ /(2)/
former President and Chief Executive
Officer of Ciba-Corning Diag-
nostics Corp., a manufacturer and
distributor of medical diagnostic
products. Director of Matritech,
Inc., a developer and manufacturer
of cancer diagnostic equipment.
Morton K. Perchick (58), - - 15,007/(6)/ /(2)/
Executive Vice President of the
Company.
Clifford G. Sprague (52), - - 18,743/(7)/ /(2)/
Senior Vice President and Chief
Financial Officer of the Company.
Asuri Raghavan (43),
Senior Vice President, Marketing
of the Company. - - 5,631/(5)/ /(2)/
Walter E. Von Seggern (55), - - 9,768/(8)/ /(2)/
Vice President, Engineering
and Technology of the Company.
All directors and executive officers
as a group (20 persons) - - 743,966/(9)/ 3.8
</TABLE>
______________________
(1) Includes 1,000 shares subject to options that are currently exercisable.
(2) Less than 1.0%.
(3) Includes 383,557 shares jointly held with Mr. Kulicke's wife and 108,160
shares subject to options that are currently exercisable.
(4) Consists of 8,000 shares jointly held with Mr. O'Steen's wife.
(5) Includes 5,000 shares subject to options that are currently exercisable.
(6) Includes 10,200 shares subject to options that are currently exercisable.
(7) Includes 6,400 shares jointly held with Mr. Sprague's wife and 12,014
shares subject to options that are currently exercisable.
(8) Includes 6,520 shares subject to options that are currently exercisable.
(9) Includes 192,484 shares subject to options that are currently exercisable.
See footnotes (1) and (3) through (8) above.
4
<PAGE>
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
In the absence of instructions to the contrary, proxies will be voted in
favor of ratification of the reappointment of Price Waterhouse LLP as
independent accountants of the Company for the year ending September 30, 1996.
The election of independent accountants by the shareholders is not required by
law or by the Company's By-laws. Traditionally, the Company has submitted this
matter to the shareholders for ratification and believes that it is good
practice to continue to do so. A majority of the votes cast in favor of the
election of Price Waterhouse LLP is necessary to approve this matter. For such
purposes, the withholding of authority to vote or the specific direction not to
cast a vote, such as a broker non-vote, will not constitute the casting of a
vote in favor of the election. If a majority of the votes cast on this matter
are not cast in favor of the election of Price Waterhouse LLP, the Company will
appoint other independent accountants as soon as is practical and before the
close of the 1996 fiscal year.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting to make a statement if desired and will be available to respond
to any appropriate questions.
ADDITIONAL INFORMATION
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons who own more
than ten percent of a registered class of the Company's equity securities
(collectively, the "reporting persons") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and to furnish the
Company with copies of these reports.
Based on the Company's review of the copies of these reports received by
it, and written representations, if any, received from reporting persons with
respect to the filing of reports on Form 3, 4 and 5, the Company believes that
all filings required to be made by the reporting persons for Fiscal 1995 were
made on a timely basis, with the exception of the late filing of a Form 4 for
(i) a trust of which Messrs. C. Scott Kulicke, Frederick W. Kulicke, Jr. and
Allison F. Page are three of the five trustees and (ii) Herbert D. Benjamin,
which was filed late to report a transaction that Mr. Benjamin had engaged in
after leaving the employ of the Company. Mr. Benjamin has since rejoined the
Company as a Vice President.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
received by the Chief Executive Officer and the four most highly compensated
executive officers of the Company (together with the Chief Executive Officer,
the "named executive officers") for the fiscal year ended September 30, 1995
("Fiscal 1995"), as well as the compensation paid to each such individual for
the Company's previous two fiscal years ("Fiscal 1994" and "Fiscal 1993,"
respectively).
5
<PAGE>
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------------------------ ------------
AWARDS ALL
------
OTHER SECURITIES OTHER
ANNUAL UNDERLYING COMPEN-
NAME AND FISCAL SALARY BONUS COMPEN- OPTIONS SATION
PRINCIPAL POSITION YEAR ($) ($)/(1)/ SATION($)/(2)/ (#)/(3)/ ($)/(4)/
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Scott Kulicke 1995 $260,000 $268,268 $4,926 55,400 $ 3,608
Chairman of the Board and 1994 240,000 50,000 3,277 10,000 3,571
Chief Executive Officer 1993 220,000 180,000 1,831 9,200 3,531
Morton K. Perchick 1995 $189,750 $119,808 $4,371 30,600 $ 1,386
Executive Vice President 1994 172,500 27,000 4,543 7,800 1,349
1993 160,000 89,000 2,980 6,600 1,309
Clifford G. Sprague 1995 $157,500 $ 99,445 $4,058 24,600 $ 1,386
Senior Vice President and 1994 150,000 25,000 3,807 6,600 1,349
Chief Financial Officer 1993 136,000 75,700 2,977 5,600 1,149
Asuri Raghavan 1995 $140,000 $ 68,992 $3,276 14,000 $ 1,299
Senior Vice President, 1994 126,539 12,000 3,657 4,400 1,349
Marketing 1993 107,778 41,500 2,692 4,600 957
Walter E. Von Seggern/(5)/ 1995 $150,000 $ 54,912 $4,218 15,000 $ 1,386
Vice President, Engineering 1994 140,000 14,500 4,630 5,400 830
and Technology 1993 130,000 54,900 860 12,200 103,111
</TABLE>
______________________
(1) These amounts represent incentive payments to the named executive officers
as participants in the Company's Executive Incentive Compensation Plan
(with respect to the fiscal year indicated). See "Compensation Committee
Report on Executive Compensation" herein.
(2) These amounts represent reimbursement for taxes paid by the named executive
officers on Company-provided automobiles.
(3) The amount listed for Mr. Von Seggern in Fiscal 1993 includes options
granted in connection with his acceptance of employment with the Company.
(4) Amount indicated for Mr. Kulicke for Fiscal 1995 includes the Company's
matching contribution to the 401(k) Incentive Savings Plan, and $2,222 of
forgiveness of interest and principal on a loan made by the Company
pursuant to a 1978 loan program which was established to permit certain
officers of the Company to purchase Common Shares. This column also
includes for Fiscal 1995 the Company's matching contribution to the 401(k)
Incentive Savings Plan with respect to Messrs. Perchick, Sprague, Raghavan
and Von Seggern.
(5) Mr. Von Seggern joined the Company on August 24, 1992. The last column for
Fiscal 1993 for Mr. Von Seggern includes relocation benefits paid to him in
connection with his joining the Company.
STOCK OPTIONS
Pursuant to the Company's 1994 Employee Stock Option Plan (the "1994
Plan"), incentive stock options ("ISOs") designed to qualify under Section 422A
of the Internal Revenue Code and nonqualified stock options ("NQSOs") to
purchase up to an aggregate of 1,700,000 shares of the Company's Common Shares
may be issued by the Company to key employees of the Company and its
subsidiaries. A "key employee" is an officer or employee who occupies a
responsible executive, professional, managerial or administrative position and
who the Committee administering the 1994 Plan believes has the capacity to
contribute to the long-term success of the Company and its subsidiaries. The
1994 Plan is currently administered by the Compensation Committee of the Board
of Directors, which has the authority to select the persons to whom options will
be granted, the number of option shares, the exercise price, the date of grant
and the term of options granted under the 1994 Plan. The 1994 Plan requires
that, in the case of
6
<PAGE>
ISOs, the exercise price may not be less than 100% of the fair market value of
the Company's Common Shares on the date of grant. Options may be exercised in
such installments and on such dates as the Compensation Committee may specify.
Upon the termination of an optionee's employment for any reason other than
death, disability or cause, options held by an optionee may be exercised, to the
extent exercisable on the date of termination (or to the greater extent
permitted by the Compensation Committee), until the earlier of the expiration
date in the option or three months after the date of termination of employment.
If an optionee's employment terminates because of death or disability, the
three-month period is extended to twelve months under most circumstances. If
the key employee is terminated due to cause, all options held by the key
employee will terminate concurrently upon receipt by the optionee of his or her
notice of termination due to cause.
The Company also had two Employee Incentive Stock Options Plans meeting the
requirements of Section 422A of the Code, the "1980 Plan" and the "1983 Plan"
and one Employee Incentive Stock Option and Non-Qualified Stock Option Plan, the
"1988 Plan." No further options may be granted under the 1980 and 1983 Plans.
As of the end of Fiscal 1995, approximately 231,770 shares remained available
for the granting of options under the 1988 Plan.
Options to purchase the Company's Common Shares under the 1980 plan were
granted to certain key employees and officers of the Company and its
subsidiaries at 100% of the market price of the shares on the date of grant.
Options under the 1980 Plan are exercisable at such time or times before the
tenth anniversary of the date of grant as the Board of Directors determined when
granting the options. The terms of the 1983 Plan are essentially the same as
the 1980 Plan except that the persons eligible to receive options were only such
senior executive officers of the Company as were expected to make significant
contributions to the long-term success of the Company. Options under the 1983
Plan are exercisable at such time or times after the first and before the tenth
anniversary of the date of grant as the Board of Directors determined when
granting the options.
Options to purchase the Company's Common Shares under the 1988 Plan were
granted to officers and employees of the Company who were expected to make
significant contributions to the long-term success of the Company at an exercise
price, in the case of ISOs, of not less than 100% of the fair market value of
the Company's Common Shares on the date of grant.
STOCK OPTION TABLES
The following tables provide information with respect to stock option
grants by the Company to the named executive officers in Fiscal 1995, and the
number of unexercised options and the value of unexercised in-the-money options
at the Fiscal 1995 year-end, respectively. All share data have been adjusted to
reflect the two-for-one stock split of the Company's Common Shares in July 1995.
7
<PAGE>
OPTION GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES OF
-----------------------------------------
% OF TOTAL STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED EXERCISE OPTION TERM /(2)/
----------------------------
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR/(1)/ PER SHARE DATE 5% 10%
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Scott Kulicke 55,400 15.83% $8.0625 10-11-04 $280,904 $711,865
Morton K. Perchick 30,600 8.74% $8.0625 10-11-04 $155,156 $393,196
Clifford G. Sprague 24,600 7.03% $8.0625 10-11-04 $124,733 $316,099
Asuri Raghavan 14,000 4.00% $8.0625 10-11-04 $ 70,986 $179,894
Walter E. Von Seggern 15,000 4.29% $8.0625 10-11-04 $ 76,057 $192,743
</TABLE>
________________________
(1) The Company granted options to employees to purchase a total of 349,960
shares during Fiscal 1995.
(2) These amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their
expiration date.
AGGREGATED OPTION EXERCISES IN FISCAL 1995 AND 1995 FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR-END AT FISCAL YEAR-END/(2)/
-------------------- -----------------------
ACQUIRED ON EXERCIS- UNEXERCIS- EXERCIS- UNEXERCIS-
NAME EXERCISE VALUE REALIZED /(1)/ ABLE ABLE ABLE ABLE
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Scott Kulicke....... -- -- 91,840 74,000 $2,935,868 $2,129,183
Morton K. Perchick..... 10,660 $116,384 -- 44,480 -- $1,281,288
Clifford G. Sprague.... 15,026 $171,512 3,454 36,520 $ 104,697 $1,053,373
Asuri Raghavan......... 5,760 $112,540 -- 22,440 -- $ 650,230
Walter E. Von Seggern.. 5,960 $126,208 -- 26,640 -- $ 780,428
</TABLE>
________________________
(1) Calculated on the basis of the closing price of the underlying Common
Shares on the date of exercise minus the exercise price.
(2) In-the-money options are those where the fair market value of the
underlying securities exceeds the exercise price of the option. The
closing price of the Company's Common Shares on September 30, 1995, the end
of its 1995 fiscal year, was $36.50 per share.
PENSION PLAN TABLE
The Company has maintained a tax-qualified defined benefit pension plan,
which covered U.S. employees who had reached age 21 and completed one year of
service. Retirement benefits are determined under a formula based on length of
service and average compensation in the three consecutive calendar years out of
the last ten producing the highest average (subject to certain Internal Revenue
Code limits). The following table shows the annual benefits under the Company's
qualified pension plan upon normal retirement at age 65 to persons in specified
salary classifications, assuming election of payment
8
<PAGE>
in the form of an annuity for the employee's life. Amounts set forth in the
table are subject to a reduction allowing for social security benefits paid for
by the Company. Effective December 31, 1995, benefit accruals under the
Company's pension plan were frozen. As a consequence, employees' accrued
benefits will not increase after December 31, 1995 as a result of their
subsequent service or compensation.
ANNUAL BENEFIT ASSUMING YEARS OF SERVICE AS INDICATED
<TABLE>
<CAPTION>
REMUNERATION/(1)/ 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- - ----------------- -------- -------- -------- -----------
<S> <C> <C> <C> <C>
$100,000................. $15,198 $30,396 $45,594 $53,193
120,000................. 18,627 37,253 55,880 65,193
150,000/(2)/............ 23,770 47,539 71,309 83,193/(3)/
</TABLE>
______________________
(1) Average annual cash compensation during the last three calendar years prior
to retirement, which includes amounts not included in the above Summary
Compensation Table, such as certain personal benefits.
(2) Represents the maximum annual compensation limit under which annual
benefits could be computed in Fiscal 1995.
(3) Represents the maximum annual benefit which may be paid.
The estimated credited years of service under the pension plan for the
named executive officers were as follows: Mr. C. Scott Kulicke, 23 years; Mr.
Perchick, 16 years; Mr. Sprague, 7 years; Mr. Raghavan, 14 years, and Mr. Von
Seggern, 3 years.
TERMINATION OF EMPLOYMENT AGREEMENTS
The Company has Termination of Employment Agreements with its executive
officers which provide that in the event of certain changes in control, as
defined in the Agreements, the officer who is a party to such agreement and
whose employment terminates, other than voluntarily or for cause, within 18
months after such change in control, will be entitled to termination pay equal
to the lesser of a specified number of months' base salary or $10 less than the
amount which would subject the officer to excise tax with respect to such
payment under Section 4999 of the Internal Revenue Code or would make payment
thereof non-deductible by the Company under Section 280G of the Code. Such
agreements are all currently scheduled to expire on December 31, 1997 unless
extended. The named executive officers' Termination of Employment Agreements
provide for payment of the following number of months' base salary: Mr. C.
Scott Kulicke, 30 months, Mr. Perchick, 18 months; Mr. Sprague, 18 months; Mr.
Raghavan, 18 months; and Mr. Von Seggern, 18 months.
INCENTIVE SAVINGS PLAN
The Company has an incentive savings plan for employees, designed to comply
with Section 401(k) of the Internal Revenue Code. U.S. employees who have
reached age 21 and completed one year of service are eligible to participate.
Participants may authorize pre-tax contributions to the plan of up to 6% of
their compensation plus, in the case of non-highly compensated employees, up to
an additional 4% of their compensation. The plan limits, as required by
provisions of the Internal Revenue Code, the amounts which may be contributed to
the plan by participants who are highly compensated employees.
9
<PAGE>
The Company matches participants' contributions by paying into the plan, either
in cash or by contribution of Company Common Shares, a certain percentage of
each participant's contributions up to 6% of the participant's pay. For the
1995 plan year, the Company matched 15% of each participant's contributions.
Effective January 1, 1996, the amount of the Company's matching contribution
will at least be doubled and will be further increased based on a participant's
completed years of service. In addition, the Company will make a
"grandfathered" matching contribution on behalf of participants who are employed
by the Company and at least age 40 on December 31, 1995. All employees who were
eligible to participate in the plan on or before December 31, 1995 were
immediately fully vested. Employees who become eligible to participate in the
plan after December 31, 1995 will reach full vesting after four years of
service.
BOARD MATTERS
The Company has standing Audit and Compensation Committees. There is no
standing nominating committee.
The Audit Committee, comprised of Messrs. MacDonell Roehm, Jr., Chairman,
Frederick W. Kulicke, Jr. and Allison F. Page, met twice during Fiscal 1995.
The principal duties of the Audit Committee are to recommend independent public
accountants for appointment by the Company; review with the independent
accountants the planned scope and results of the annual audit and their reports
and recommendations; and review with the independent accountants matters
relating to the Company's system of internal controls.
The Compensation Committee, comprised of Messrs. John A. O'Steen, Chairman,
James W. Bagley and C. William Zadel, met twice during Fiscal 1995. The
principal duties of the Compensation Committee are to approve compensation
arrangements for the executive officers and senior managers of the Company and
to administer the Company's stock option plans.
In Fiscal 1995, the Board of Directors met eight times. During Fiscal
1995, Directors who were not officers of the Company received a quarterly
retainer of $2,000 plus $1,500 per meeting attended. During Fiscal 1996,
Directors will receive a quarterly retainer of $3,000 plus $2,000 for each
regular and $1,000 for each special meeting of the Board. Committee Chairmen
are paid an annual retainer of $2,000 and committee members are paid $1,000 for
each committee meeting not held on the date of a Board meeting. All of the
incumbent directors attended at least 75% of Board and applicable committee
meetings in Fiscal 1995, with the exception of Mr. Bagley who attended 70% of
such meetings.
Each member of the Board who is not also an officer or employee of the
Company is eligible to participate in the Company's 1988 Non-Qualified Stock
Option Plan for Non-Officer Directors (the "Director Plan"). Pursuant to the
Director Plan, options to purchase 5,000 Common Shares are automatically granted
to each eligible director on the last day of each February on which the
Company's shares are publicly traded in each of the years 1990 through 1998 at
an exercise price equal to 100% of the fair market value of the Company's Common
Shares on the date of grant. Options granted under the Director Plan become
exercisable in 20% annual increments commencing on the first anniversary of the
date they are granted.
See also "Certain Relationships and Related Transactions" below.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 2, 1995, the Company acquired American Fine Wire Corporation
("AFW") through the merger of a subsidiary of the Company into Circle "S"
Industries, Inc., the parent corporation of AFW ("Circle S"). AFW is a
manufacturer of fine gold and aluminum wire for use in the wire bonding process
and has facilities in Selma, Alabama, Singapore and Zurich, Switzerland.
The preliminary purchase price for the AFW Acquisition totaled
approximately $53.6 million, subject to possible upward or downward adjustment
based upon completion and audit of the closing balance sheet. Of the $53.6
million paid, in accordance with the terms of the acquisition agreements,
approximately $34.4 million was paid by delivery of notes to the stockholders of
Circle S (the "AFW Notes"). The AFW Notes bore interest at the rate of 6.4375%
per year, less costs (1% per year) of the letters of credit securing the AFW
Notes, and matured and were repaid on January 5, 1996.
The AFW acquisition agreements provide for the indemnification of the
Company by certain former stockholders of Circle S (including Larry D. Striplin,
Jr., the former Chairman and largest stockholder of Circle S) against breaches
of or inaccuracies in various representations and warranties and covenants of
Circle S in the acquisition agreements and against certain types of possible
liabilities.
In connection with the AFW Acquisition, the Company's Board elected R.
Kelly Payne, who was the President of AFW, as a Vice President of the Company,
and agreed to elect, and on December 12, 1995 did elect, Larry D. Striplin, Jr.
as a director of the Company. It is contemplated that, subject to his
reelection by the Company's shareholders, Mr. Striplin will continue as a
director of the Company for at least five years. Pursuant to the AFW
acquisition, the Company also assumed a 1990 employment and non-competition
agreement between Circle S and Mr. Striplin providing for payments to him or his
estate of $200,000 per year for five years following the date of the AFW
acquisition. Mr. Striplin's employment by Circle S and AFW terminated at the
time of such acquisition. In connection with the AFW acquisition, the Company
also entered into an employment agreement with R. Kelly Payne.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors, comprised
entirely of outside directors, is responsible for approving compensation
arrangements for the officers and senior managers of the Company.
The Compensation Committee seeks to achieve the following goals with the
Company's executive compensation programs: to attract and retain key
executives; to motivate and reward executives for the attainment of corporate
and individual performance objectives; and to provide executives with an
opportunity to acquire an equity interest in the Company. The Compensation
Committee seeks to foster a performance-oriented environment by tying a
significant portion of each executive's cash compensation to the achievement of
objectives that are important to the Company.
The Company's Executive Incentive Compensation Plan is currently comprised
of three components: base salary; cash incentive; and equity incentive in the
form of stock options. At present, there are approximately 52 participants in
the plan.
11
<PAGE>
TARGET TOTAL CASH COMPENSATION
Target total cash compensation for each executive is established based on
marketplace data. For this purpose, in Fiscal 1995 the Company utilized
principally the median data for companies with sales between $100 million and
$200 million as reported by nationwide participants in the Alexander & Alexander
Consulting Group/Radford Associates' 1994 Management Compensation Report.
Participants in that nationwide survey are not limited to the companies included
in the peer group established to compare shareholder returns in the performance
graph included below because the Compensation Committee believes that the
Company's competitors for executive talent are not limited to that peer group.
BASE SALARY AND CASH INCENTIVE
Once target total cash compensation has been established for each
executive, the total compensation is divided into a base salary portion and a
cash incentive portion. The higher the level of responsibility of the executive
within the Company, the greater the portion of that executive's target total
cash compensation that consists of the cash incentive component. At budgeted
performance levels, targeted cash incentive ranges from approximately 33% to 56%
of targeted total cash compensation (50% to 125% of base salary) for the named
executive officers.
In Fiscal 1995, the cash incentive portion of the compensation of
participants in the Executive Incentive Compensation Plan was made dependent on
achievement of specified operating profit margins, return on assets and
performance goals. Due to the Company's performance in Fiscal 1995, an
aggregate of $1,401,000 was awarded to participants in the Plan.
EQUITY INCENTIVE
The Company grants stock options annually to all participants in the
Executive Incentive Compensation Plan. The purpose of these grants is to give
participants a stake in the success of the Company as measured by the stock
market's assessment of the Company's performance. The number of options granted
to each participant is generally determined on the basis of a percentage of base
salary that varies depending on the participant's level of responsibility. The
extent of existing options or stock ownership is not generally considered in
granting options, except that the Company sometimes grants an initial round of
options to newly recruited executives to provide them with some stake in the
Company's success from the commencement of their employment.
A 1994 survey conducted by The Wyatt Company among members of the American
Electronics Association with sales in the $100 million to $499 million range
demonstrated that the Company's historical rate of granting stock options to its
employees is significantly below the rate of its peers. In Fiscal 1994, option
grants to Company employees amounted to 0.6% of the Company's outstanding Common
Shares compared to an average rate of 4.6% for members of the association. As a
consequence, the Company increased to approximately 2% the percentage of its
outstanding shares intended to be granted in the aggregate in Fiscal 1995 and
anticipates granting options at higher than historic rates in the future.
12
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee uses the same factors in determining the
compensation of the Chief Executive Officer as it does for the other
participants in the Executive Incentive Compensation Plan. Following an analysis
of marketplace data and a subjective assessment of the Chief Executive Officer's
performance, the Compensation Committee recommended, and the Board of Directors
approved, an increase in the annual salary of the Chief Executive Officer from
$240,000 to $260,000 for Fiscal 1995. As is the case of the other participants
in the 1995 Executive Incentive Compensation Plan, the Chief Executive Officer
received a cash incentive payment for Fiscal 1995, which amounted to $268,268,
based on the considerations described in "Base Salary and Cash Incentive" above.
THE COMPENSATION COMMITTEE
JOHN A. O'STEEN, CHAIRMAN
JAMES W. BAGLEY
C. WILLIAM ZADEL
PERFORMANCE GRAPH
The graph set forth below compares, for Fiscal 1991 through Fiscal 1995,
the yearly change in the cumulative total returns to holders of Common Shares of
the Company with the cumulative total return of a peer group selected by the
Company and of the NASDAQ Stock Market-US Index. The peer companies are all
among the top 25 semiconductor capital equipment suppliers in the world and were
selected by the Company based principally on nature of business, revenues,
employee base, technology base, market share, customer and customer
relationships. The peer group is composed of Advanced Semiconductor Materials
International N.V., Applied Materials, Inc., BTU International, Inc., Electro
Scientific Industries, Inc., FSI International, Inc., Genus, Inc., KLA
Instruments Corp., Lam Research Corp., LTX Corp., Novellus Systems, Inc.,
Silicon Valley Group, Inc., Teradyne Inc. and Varian Associates, Inc. The graph
assumes that the value of the investment in the relevant stock or index was $100
at September 30, 1990 and that all dividends were reinvested. Total returns are
calculated based on a fiscal year ending September 30. The closing market price
of the Company's Common Shares as of September 30, 1995 was $36.50.
13
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, A PEER GROUP AND
THE NASDAQ STOCK MARKET-US INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kulicke & Soffa Industries 100 124 98 561 317 1424
Peer Group 100 131 159 373 486 993
NASDAQ Stock Market-US 100 157 176 231 233 321
-------------------------------------------------------------------------------------------------
</TABLE>
SHAREHOLDER PROPOSALS
Proposals which shareholders desire to have included in the Company's Proxy
Statement for the Annual Meeting in 1997 pursuant to Securities Exchange Act
Regulation 14a-8 must be addressed to the Secretary of the Company and received
by the Company on or before September 11, 1996.
14
<PAGE>
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation by mail, officers and regular employees of the Company may
solicit proxies personally and by telephone, telegraph or other means, for which
they will receive no compensation in addition to their normal compensation.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock held of record by such persons, and the Company may
reimburse them for their reasonable out-of-pocket and clerical expenses.
Although the Company knows of no business which will be presented at the
Annual Meeting other than those described herein, proxies in the accompanying
form will confer discretionary authority with respect to any other matters which
may come before the meeting.
By Order of the Board of Directors
SUSAN WATERS
Secretary
15
<PAGE>
KULICKE AND SOFFA INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints C. Scott
Kulicke and Clifford G. Sprague, or either of them, with full power of
substitution, as the undersigned's proxies to vote at the Annual Meeting of
Shareholders of Kulicke and Soffa Industries, Inc. (the "Company") called for
February 13, 1996 and at any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
(Continued on reverse side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
1. ELECTION OF DIRECTORS
Nominees: Frederick W. Kulicke, Jr.; Larry D. Striplin, Jr.
FOR WITHHOLD AUTHORITY (INSTRUCTION: To withhold authority
All nominees listed To vote for all to vote for any individual nominee,
nominees listed write that nominee's name in the
space provided below)
[_] [_]
____________________________________
By signing this Proxy, authority is
given to cumulate votes in the
discretion of the Proxies for less
than all nominees listed.
2. Appointment of Price Waterhouse LLP as independent public accountants for
the Company for the year ending September 30, 1996.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
You are urged to sign and return this proxy so that you may be sure that
your shares will be voted.
Dated_________________________________, 1996
______________________________________
Signature of Shareholder
______________________________________
Signature of Shareholder
Please sign exactly as your name appears hereon, date and return promptly.
When shares are held by joint tenants, both should sign. Executors,
administrators, trustees and other fiduciaries should indicate their
capacity when signing.
