Pennsylvania
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000-00121
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23-1498399
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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23A Serangoon North Avenue 5, #01-01 K&S Corporate Headquarters, Singapore
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554369
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(Address of Principal Executive Offices)
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(Zip Code)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit No.
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Description
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10.1
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Incentive Compensation Plan
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KULICKE AND SOFFA INDUSTRIES, INC.
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September 25, 2015
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By:
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/s/ Jonathan H. Chou
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Name:
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Jonathan H. Chou
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Title:
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Senior Vice President and Chief Financial Officer
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Exhibit No.
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Description
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10.1
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Incentive Compensation Plan
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•
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focus the efforts of Plan Participants to achieve quarterly and annual financial goals and individual objectives consistent with the Company’s business strategy;
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•
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provide Plan Participants with the opportunity to earn quarterly, and an annual, Incentive Award based on Corporate and Business Line (if appropriate) financial, and individual performance, and;
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•
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align the interests of our employees and K&S shareholders by providing awards that are commensurate with business performance.
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•
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determining the criteria and mechanism for funding the Plan;
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•
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determination of suspension or reduction of aggregate Incentive Awards due to current or projected business performance;
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•
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determining the primary financial performance metrics;
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•
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approving any adjustments to Business Line ("BL") performance for transition, start-up or extraordinary costs and circumstances;
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•
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approving the aggregate quarterly, and annual, award amounts;
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•
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approving all objectives, weightings, targets and payouts to individual Executive Officers;
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•
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approving any discretionary adjustments to Incentive Awards, and
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•
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delegating routine Plan administration responsibilities to Company management.
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•
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providing summary information and analysis to the MDCC on a quarterly, and annual, basis and presenting the aggregate pool for review and approval by the MDCC;
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•
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facilitating the collection of financial and individual performance results and Award recommendations;
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•
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recommending and enforcing eligibility and administration rules, individual Incentive Target assignments and the relative performance weightings of Company versus Business Line versus Individual performance;
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•
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recommending financial performance metrics and funding scales (including threshold, target and maximum performance) for Company and BL Awards;
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•
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financial planning and accruals as necessary;
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•
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reviewing and verifying all proposed Awards before such Awards are made;
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•
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determination of suspension or reduction of non-Executive Officer individual Incentive Awards due to performance;
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•
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counseling to the MDCC on the determination of suspension or reduction of aggregate Incentive Awards due to current or projected business performance;
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•
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determining the extent to which internal transfers, promotions, changes in full-or-part-time status and approved leaves of absence impact accruals, targets and actual Awards;
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•
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interpreting the Incentive Compensation Plan document and establishing, adopting, or amending any provisions as are necessary for proper administration, consulting where appropriate with the MDCC.
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•
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A minimum positive $ Corporate Net Income threshold.
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•
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are employed by K&S or one of its affiliates as a regular full-time or part-time employee and;
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•
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do not participate in the Sales Incentive Plan ("SIP")
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•
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do not participate in the Success Shares Plan
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•
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Each fiscal quarter is measured independently, with commensurate Awards based on performance. Each quarter is worth 20% of the annual target.
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•
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An annual, 5
th
payment, based on a full year’s results, is also worth 20% of the annual target
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•
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Eligible for 100% of the quarterly Award provided they joined in days 1-15 of the first full month of the quarter
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•
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Eligible for 66.7% of the quarterly Award provided they joined after the 16
th
day of the first full month of the quarter, up to the last day of the first full month of the quarter
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•
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Are not eligible if they joined in the second or third month of the quarter
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•
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eligible for 100% of the Award provided they first participated in the ICP in the first quarter
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•
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eligible for 75% of the Award provided they first participated in the ICP in the second quarter
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•
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eligible for 50% of the Award provided they first participated in the ICP in the third quarter
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•
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eligible for 25% of the Award provided they first participated in the ICP in the fourth quarter
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1.
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When Corporate financial performance measures are below threshold (see Appendix 3)
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2.
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When all funds in the ICP pool are not utilized for incentive payments and a discretionary amount is created for the CEO to allocate with MDCC approval. (see Appendix 3)
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3.
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Special functional or organizational incentives with MDCC approval (see Appendix 3)
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•
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Participants who terminate during the first full calendar month of the quarter are not eligible for an Award for that quarter.
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•
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Participants who terminate after the first full calendar month of the quarter are eligible for a pro-rata Award based on the number of calendar days worked in the quarter. Actual Corporate and BL
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•
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Participants who terminate during the first 3 quarters of the Fiscal Year are not eligible for an Award for the annual component.
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•
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Participants who terminate during the fourth quarter of the Fiscal Year are eligible for a pro-rata Award, based on the number of full months completed in the year, divided by 12. Actual results are used for the Corporate and BL components. Individual results are scored at 100%.
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•
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Participants will not be eligible for any payout for voluntary termination at any time during the fiscal year
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•
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Participants will not be eligible for any payout for involuntary termination for cause or performance issues at any time during the fiscal year
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•
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Participants will be eligible for a pro-rata payout for involuntary termination due to retirement, death, permanent disability, or a Reduction in Force based on:
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◦
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Number of full months completed in the fiscal year divided by 12
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▪
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Example: Termination occurs in mid-August. Number of completed months during fiscal year = 10 (October through July). Eligible for a 10/12 pro-rata payout
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◦
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Payout will be based on participant’s ICP target at 100%
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Hire Date
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Pro-rata Eligibility for ICP Payout
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October 1 - 15
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100%
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October 16 - 31
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91.7%
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November 1 - January 15
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75%
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January 16 - 31
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66.7%
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February 1 - April 15
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50%
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April 16 - 30
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41.7%
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May 1 - July 15
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25%
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July 16 - 31
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16.7%
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August 1 - September 30
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Not Eligible for Payout
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Duration of Absence
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Proration Factor
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≤4 work weeks
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100.00%
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>4 work weeks - ≤7 work weeks
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66.67%
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>7 work weeks - ≤10 work weeks
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33.33%
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>10 work weeks
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0% (no Award)
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•
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A full quarterly Award for the quarter of transition if the transition is effective during the first full calendar month of the quarter
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•
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If the transition is after the first full calendar month of the quarter the Participant will remain in Success Shares until the next quarter
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•
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Proration of the annual “5
th
” payment will be proportionate to the number of full quarters in ICP
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•
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Corporate Net Income:
Corporate Net Income results at the close of each fiscal quarter, and at the close of the Fiscal Year;
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•
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Corporate Operating Margin %:
results at the close of each fiscal quarter, and at the close of each Fiscal Year;
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•
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Business Line Direct Operating Margin %(BL DOM%):
Business Line Direct Operating Margin % (DOM%) results at the close of each fiscal quarter, and at the close of the Fiscal Year; and,
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•
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Individual:
specific qualitative or quantitative goals established for each eligible employee for each fiscal quarter and scored from 0-100. For the annual “5
th
” payment, the employee’s performance rating on a scale of 1-5, is used to determine the Award percent for the individual component.
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Career Level
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FY15 Salary Grade
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Financial
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Individual
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Net Income
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Operating Margin
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VP Below ELT
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E1
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37.5%
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37.5%
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25%
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Directors
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M5-M6
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30%
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30%
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40%
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Management
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M1-M4
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25%
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25%
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50%
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Professional
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P1-P7
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20%
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20%
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60%
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Career Level
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FY15 Salary Grade
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Financial
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Individual
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Corporate Net Income
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Business Line Direct Operating Margin %
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VP Below ELT
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E1
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30%
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45%
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25%
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Directors
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M5-M6
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24%
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36%
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40%
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Management
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M1-M4
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20%
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30%
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50%
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Professional
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P1-P7
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16%
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24%
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60%
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1.
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When quarterly Corporate ICP funding is zero:
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management has discretion to allocate to key, top performers in professional tiers a discretionary bonus
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•
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not to exceed 25% of eligible Participants
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cost not to exceed US$ 500,000 (per annum)
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eligible Participants predominantly Technical / Engineering at levels P1- P5
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2.
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When all funds in the ICP pool are not utilized for incentive payments a discretionary amount is created for the CEO to allocate with the MDCC approval. An example is:
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a.
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Key Performer ‘CEO Award’ of 5% of the final full year end pool to allocate to year’s stars
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Approximately US$ 150,000 at target
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3.
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Special functional or organizational incentives
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In order to incentivize and reward for the attainment of critical organizational goals, the Company may establish a special incentive for a group or sub-group of the Company
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Programs will be approved by the MDCC
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Current tax law in China allows for preferential tax treatment for bonuses paid to employees
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◦
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Tax is calculated by first dividing the bonus amount by 12 and determining the effective tax rate applicable to one twelfth using the progressive tax rate table
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The marginal tax rate is then applied to the entire bonus
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This treatment is applicable to ONE bonus received per year only
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◦
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Individuals receiving multiple bonuses during the year would be preferentially taxed on one bonus payment and the remaining payments would be treated as salary and subject to progressive tax rates along with other salary earned during the month
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Employees can elect only for either an annual payout option, or quarterly payouts,
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Employees who opt for an annual payment shall voluntarily apply through a standard written requisition (prepared by our external legal firm) for deferment of their quarterly incentive payouts to December for ICP employees and October for SIP employees
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The application shall remain valid for the calendar year and employees cannot opt out of the scheme during that year
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If an employee does not make their election in the time allotted, and in the absence of an election, the default payout approach will be quarterly payouts
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For those electing the annual payout, the payouts will be made in December and represent the accrued quarterly payouts for the entire year
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If an employee who so elects, resigns or retires during the year, or is involuntarily terminated, will receive their accrued Awards as soon as administratively practicable
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