United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
(Mark one)
[x] Annual report pursuant to section 15 (d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999
OR
[ ] Transition report pursuant to section 15 (d) of the Securities
Exchange Act of 1934 for the transition period from
_______________ to ____________________.
Commission File Number 0-121
A. Full title of the Plan:
KULICKE & SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Kulicke & Soffa Industries, Inc.
2101 Blair Mill Road
Willow Grove, PA 19090
Telephone Number: (215) 784 6000
<PAGE>
Page(s)
Index
Report of Independent Accountants 3
Financial Statements
Statements of Net Assets Available for Benefits 4
Statements of Changes in Net Assets Available for Benefits 5
Notes to Financial Statements 6 - 9
Additional Information*:
Schedule I -
Item 27a-Schedule of Assets Held for Investment Purposes 10
Schedule II-
Item 27d-Schedule of Reportable Transactions 11
Signatures 12
Exhibits 13
* Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
Kulicke and Soffa Industries, Inc.
Incentive Savings Plan
We were engaged to audit the financial statements and supplemental schedules of
the Kulicke and Soffa Industries, Inc. Incentive Savings Plan (the "Plan") at
December 31, 1998 and 1999 and for the years ended, as listed in the
accompanying index. These financial statements and supplemental schedules are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
Except as explained in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the December 31,
1998 information summarized in Note 3, which was certified by CG Life, the
custodian of the Plan, except for comparing such information with the related
information included in the financial statements and supplemental schedules. We
have been informed by the plan administrator that the custodian holds the Plan's
investment assets and executes investment transactions. The plan administrator
has obtained a certification from the custodian as of December 31, 1998 and for
the year then ended, and that the information provided to the plan administrator
by the custodian is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedules as of December 31, 1998 taken as a whole. The form and
content of the information included in the financial statements and schedules,
other than that derived from the information certified by the custodian, have
been audited by us in accordance with auditing standards generally accepted in
the United States and, in our opinion, are presented in compliance with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
In our opinion, the financial statements, referred to above, of the Kulicke and
Soffa Industries, Inc. Incentive Savings Plan (the "Plan") as of December 31,
1999, and for the year then ended present fairly, in all material respects, the
financial status of the Kulicke and Soffa Industries, Inc. Incentive Savings
Plan (the "Plan") as of December 31, 1999, and changes in its financial status
for the year then ended in conformity with generally accepted accounting
principles.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 19, 2000
3
<PAGE>
KULICKE AND SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1999
-------------------------------------------------------------------------------
DECEMBER 31,
1998 1999
----------- -----------
Assets:
Investments at fair value:
Equity funds $21,622,367 $32,818,797
Fixed income funds 3,514,368 2,807,699
Kulicke and Soffa Industries, Inc.
common stock 4,676,404 14,537,052
Participant notes receivable 511,267 714,857
----------- -----------
Total investments 30,324,406 50,878,405
Cash and cash equivalents -- 630,185
Employer contributions receivable 395,333 --
Due from broker for securities sold -- 29,900
----------- -----------
Total Assets 30,719,739 51,538,490
----------- -----------
Accounts payable -- 4,564
----------- -----------
Net assets available for benefits $30,719,739 $51,533,926
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
KULICKE AND SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
-------------------------------------------------------------------------------
DECEMBER 31,
1998 1999
----------- -----------
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income:
Interest & dividends $ 94,983 $ 351,317
Market appreciation
of investments 4,091,525 16,698,950
----------- -----------
4,186,508 17,050,267
----------- -----------
Contributions:
Employer 1,585,779 1,758,115
Employee 3,613,194 3,854,090
----------- -----------
5,198,973 5,612,205
----------- -----------
Total additions $ 9,385,481 $22,662,472
----------- -----------
DEDUCTIONS TO NET ASSETS
ATTRIBUTED TO:
Benefit payments 2,033,852 1,843,858
Transaction charges 1,646 --
Participant notes receivable
terminated due to withdrawal 2,677 4,427
----------- -----------
Total deductions 2,038,175 1,848,285
----------- -----------
Net increase 7,347,306 20,814,187
Net assets available for benefits:
Beginning of year 23,372,433 30,719,739
----------- -----------
End of year $30,719,739 $51,533,926
=========== ===========
The accompanying notes are an integral part of these financial statements
5
<PAGE>
KULICKE AND SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1999
-------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Kulicke & Soffa Industries, Inc. (the
"Company") Incentive Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
GENERAL
The plan is a defined contribution plan established on January 1, 1987 and
most recently amended November 6, 1998, retroactively effective January 1,
1997. Employees become eligible to participate upon attaining the age of
18. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
CONTRIBUTIONS
Participants may contribute an amount up to 14 percent of their
compensation, on a before- tax or after-tax basis, for the contribution
period subject to IRS limitations. The Company will make a matching
contribution, on participant before-tax contributions up to 6% of
compensation, in an amount equal to 30 percent for employees with less than
five years of service, 50 percent for employees with at least five years of
service but less than fifteen and 100 percent for employees with fifteen or
more years of service. Grandfathered matching contributions are additional
matching contributions made to participants who had attained the age of 40
on or before December 31, 1995. The additional matching percentage
allocated is 25 percent for participants ages 40-44, 50 percent for
participants ages 45-54 and 75% for participants ages 55 or older. Also,
upon beginning participation in the Plan, the Company will make a one time
$500 initial ("Jump Start") contribution for participants.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and allocation of the Company's contribution and Plan earnings. Earnings
are allocated by fund based on the ratio of a participant's account
invested in a particular fund to all participants' investments in that
fund. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's account.
VESTING
Participants are immediately vested in their voluntary contributions plus
actual earnings thereon. The balance of vesting in the participants'
accounts is based on years of service. A participant becomes 33 1/3 percent
vested after 2 years of service, 66 2/3 percent vested after 3 years of
service, 100 percent vested after 4 years of service. However, if an active
participant dies prior to attaining the normal retirement age, the
participant's account becomes 100 percent vested.
6
<PAGE>
1. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
On termination of service, a participant will receive a lump-sum amount
equal to the vested value of his or her account. Distributions are subject
to the applicable provisions of the Plan agreement.
CHANGE OF TRUSTEE AND RECORDKEEPING RESPONSIBILITIES
The Company terminated the appointment of CG Trust as Trustee to the Plan
effective December 31, 1998 and appointed Morgan Stanley Dean Witter Trust
FSB to be the Plan Trustee effective January 1, 1999. The recordkeeping
responsibilites of the Plan were changed, effective January 1, 1999, to
Dean Witter Reynolds, Inc.
2. SUMMARY OF ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
CONTRIBUTIONS
Employee contributions and matching contributions are recorded in the
period during which the Company makes payroll deductions from the
participants' earnings.
BENEFITS
Benefit claims are recorded as expenses when they have been approved for
payment and paid by the Plan.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 presentation.
7
<PAGE>
3. INVESTMENTS
Investments that represent 5 percent or more of the Plan's net assets are
separately identified below.
<TABLE>
<CAPTION>
December 31,
1998 1999
----------- -----------
<S> <C> <C>
CIGNA Charter Guaranteed Income Fund, $ 3,514,368 $ --
5.90% to 6.00% interest rate
CIGNA Charter Large Company Stock Index Fund, 4,703,752 --
78,305 shares
CIGNA Fidelity Advisor Growth Opportunities Fund, 5,993,447 --
78,243 shares
CIGNA Fidelity Puritan Fund, 57,506 shares 1,767,174 --
CIGNA Fidelity Disciplined Equity Fund, 50,242 shares 2,218,690 --
CIGNA American Century Twentieth Century Ultra, 5,162,465 --
99,107 shares
Kulicke & Soffa Industries, Inc. common stock 4,676,404 14,437,052
263,460 and 341,542 shares, respectively
Morgan Stanley Dean Witter American Opportunities Fund, -- 18,654,383
427,265 shares
Morgan Stanley Dean Witter Information Fund, 82,867 shares -- 2,839,014
Morgan Stanley Dean Witter S&P 500 Index Fund, -- 5,486,252
349,889 shares
Morgan Stanley Dean Witter Government Securities Trust, -- 2,807,699
327,238 shares
</TABLE>
The investment information provided above as of December 31, 1998 is a
summary of financial data certified by CG Life, the Plan's custodian, as
complete and accurate in accordance with Section 2520.103-5 of the
Department of Labor Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. Investment
income of $149,460 for the year ended December 31, 1998 was also certified
by CG Life.
4. PARTICIPANT NOTES RECEIVABLE
Under the terms of the Plan, participants may borrow from their accounts up
to the lesser of $50,000 or 50% of their vested account balance. Loan
transactions are treated as a transfer to/from the investment fund from/to
Participant Notes Receivable. A loan is secured by the balance in the
participant's vested accrued benefit and bears interest at a rate
commensurate with market rates for similar loans, as defined (8.75% for the
years ended December 31, 1998 and 1999). Effective January 1, 1999,
participants are permitted to have up to two loans outstanding at any time.
8
<PAGE>
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
6. INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated September 5, 1997, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code ("IRC"). The determination letter does not include the recent
amendment. However, the Plan Administrator and the Plan's tax counsel
believe that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
7. RECONCILIATION OF PLAN FINANCIAL STATEMENTS TO THE FORM 5500
The Annual Return/Report of Employee Benefit Plan (the "Form 5500") is
prepared on the modified cash basis. Accordingly, certain balances included
on lines 31 and 32 of the Form 5500 differ from those included in these
financial statements. Contributions in the statement of changes in net
assets available for benefits differ from contributions in the Form 5500 by
the amount of contributions accrued at December 31. The ending net asset
balances are reconciled as follows:
<TABLE>
<CAPTION>
December 31,
1998 1999
------------ ------------
<S> <C> <C>
Net assets, reflected on Form 5500 $ 30,324,406 $ 51,533,926
Add: Employer contributions receivable 395,333 --
------------ ------------
Net assets, reflected in the financial statements $ 30,719,739 $ 51,533,926
============ ============
</TABLE>
8. FORFEITURES
Employer contributions forfeited remain in the Plan as forfeitures and are
available to offset future employer contributions or to pay Plan expenses.
The forfeiture reserve was $53,075 and $158,324 at December 31, 1999 and
1998, respectively.
9
<PAGE>
<TABLE>
<CAPTION>
KULICKE AND SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN SCHEDULE I
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
-----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR, OR RATE OF INTEREST, COLLATERAL,
SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*Morgan Stanley MSDW American Opportunities
Dean Witter Fund, $43.66/unit $ 14,664,724 $ 18,654,383
*Morgan Stanley MSDW Balanced Growth
Dean Witter Fund, $13.32/unit 1,901,603 1,743,019
*Morgan Stanley MSDW Dividend Growth
Dean Witter Securities Fund, $57.73/unit 1,829,905 1,720,178
*Morgan Stanley MSDW Information Fund,
Dean Witter $34.26/unit 2,017,321 2,839,014
*Morgan Stanley MSDW S&P 500 Index
Dean Witter Fund, $15.68/unit 4,633,641 5,486,252
*Morgan Stanley MSDW U.S. Government
Dean Witter Securities Trust Fund, $8.58/unit 2,975,209 2,807,699
*Morgan Stanley Putnam Health Sciences
Dean Witter Fund, $61.20/unit 210,663 212,194
*Morgan Stanley VanKampen Emerging Growth
Dean Witter Fund, $87.37/unit 1,118,860 1,490,378
*Morgan Stanley VanKampen American Value
Dean Witter Fund, $23.53/unit 116,109 122,655
*Morgan Stanley VanKampen Global Equity
Dean Witter Fund, $10.81/unit 571,551 550,724
*Kulicke and Soffa Kulicke and Soffa Industries, Inc. 6,763,001 14,537,052
Industries, Inc. Common Stock, $42.56/share
Participant Notes Receivable 8.75% 714,857 714,857
------------ ------------
$ 37,517,444 $ 50,878,405
============ ============
</TABLE>
*Indicates an identified person known to be a party-in-interest to the Plan.
10
<PAGE>
<TABLE>
<CAPTION>
KULICKE AND SOFFA INDUSTRIES, INC. INCENTIVE SAVINGS PLAN SCHEDULE II
SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
CURRENT
VALUE
OF ASSET
IDENTITY OF DESCRIPTION PURCHASE SELLING COST OF ON TRANSACTION NET
PARTY INVOLVED OF ASSET PRICE PRICE ASSET DATE GAIN/(LOSS)
------------------------------------------------------------------------------------------------------------------------------------
SINGLE TRANSACTION IN EXCESS OF 5% OF PLAN ASSETS*
<S> <C> <C> <C> <C> <C> <C>
Morgan Stanley MSDW American Opportunities $ 13,374,602 $ 13,374,602 $ 13,374,602 $ --
Dean Witter Fund
Morgan Stanley MSDW Balanced Growth 1,767,174 1,767,174 1,767,174 --
Dean Witter Fund
Morgan Stanley MSDW S&P 500 4,703,752 4,703,752 4,703,752 --
Dean Witter Index Fund
Morgan Stanley MSDW U.S. Government 3,514,368 3,514,368 3,514,368 --
Dean Witter Securities Trust Fund
</TABLE>
* Transactions or series of transactions in excess of 5 percent of the current
value of the Plan's assets as of December 31, 1999 as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan's
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned, hereunto duly authorized.
Kulicke & Soffa Industries, Inc. Incentive Savings Plan
Date: June 28, 2000 By: /S/ CLIFFORD G. SPRAGUE
------------------------
Clifford G. Sprague
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
12
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
------- ----
23. Consent of Independent Accountants 14
13
