Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “
Agreement ”), dated as of June 25, 2009
(“Effective Date”), is made by and between KULICKE AND
SOFFA INDUSTRIES, INC., a Pennsylvania corporation (the “
Company ”), and Christian Rheault (the “
Executive ”).
BACKGROUND
The Executive is an executive officer of the
Company. The board of directors of the Company (the
“ Board ”) and the Executive have determined
that it is in the best interests of the Company for the Executive
to relocate from the Company’s headquarters in Fort
Washington, Pennsylvania to the Company’s facility in
Singapore, for a period of two years, subject to and on the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements hereinafter set
forth, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1.
Duties and Scope of Employment
(a)
Position; Effective Date; Duties . During the
Employment Term (as defined in Section 4), Executive shall continue
to serve as Senior Vice President of the Company, reporting to the
Chief Executive Officer. For the first two (2) years of
the Employment Term, Executive shall live and work in
Singapore. During the Employment Term Executive shall
render such business and professional services in the performance
of his duties, consistent with Executive's position within the
Company, as shall reasonably be assigned to him by the Chief
Executive Officer.
(b)
Obligations . During the Employment Term,
Executive shall devote his full business efforts and time to the
Company. Executive shall not, during the Employment
Term, actively engage in any other employment, occupation or
consulting activity for any direct or indirect remuneration without
the prior approval of the Management Development and Compensation
Committee of the Board of Directors of the Company (the
"Committee"); provided, however, that Executive may serve in any
capacity with any civic, educational or charitable organization, or
as a member of corporate boards of directors or committees thereof,
without the approval of the Committee, unless such service involves
a conflict of interest with the Company's business.
2.
At-Will Employment . Executive and the
Company understand and acknowledge that Executive's employment with
the Company constitutes "at-will" employment. Subject to
the Company's obligation to provide severance benefits and
relocation benefits as specified herein and on Annex A, Executive
and the Company acknowledge that this employment relationship may
be terminated at any time, upon written notice to the other party,
with or without good cause or for any or no cause, at the option
either of the Company or Executive.
3.
Compensation; Benefits; Expatriate Matters
.
(a)
Base Salary . During the Employment Term, the
Company shall pay the Executive as compensation for his services a
base salary at the annualized rate of Two Hundred Ninety-Two
Thousand, Nine Hundred and Ninety Two United States Dollars (USD
292,992), subject to any reduction that is applicable to all senior
vice presidents of the Company (such reduction is currently 15%)
(the "Base Salary"). Such salary shall be paid
periodically in accordance with normal Company payroll practices
and subject to the usual, required
withholding. Executive's Base Salary shall be reviewed
annually by the Committee for possible adjustments in light of
Executive's performance, market conditions and competitive
data.
(b)
Incentive Compensation . During the Employment
Term, Executive shall be eligible to earn target cash incentive
compensation payments pursuant to the cash incentive compensation
plan applicable to senior vice presidents of the Company as
specified annually by the Committee.
(c)
Equity Incentive Compensation . During the
Employment Term, Executive shall be eligible to earn equity
incentive awards pursuant to the equity incentive compensation
plan(s) applicable to senior vice presidents of the Company, in
amounts and on other terms consistent with awards made to other
senior officers of the Company, as specified annually by the
Committee. Any such annual equity awards made during the
Employment Term that have time-based (not performanced-based)
vesting provisions will vest no later than the end of the
Employment Term. In addition, the Executive shall be
eligible to receive additional equity incentive awards as may from
time to time be determined by the Committee, in its sole
discretion, with such vesting provisions and other terms and
conditions as the Committee deems appropriate.
(d)
Employee Benefits; Expatriate Benefits . During
the Employment Term, Executive shall be eligible to participate in
the employee benefit plans maintained by the Company that are
applicable to other senior vice presidents of the Company to the
fullest extent provided for under those plans. Executive
shall also be entitled to the expatriate benefits listed on Annex A
hereto in connection with his assignment to Singapore.
4.
Term; Termination of Employment . The term
of this Agreement (the “Employment Term”) shall begin
on the first day of Executive’s employment after relocation
to Singapore and shall end on the second anniversary thereof,
unless extended by the Company for up to an additional one (1)
year. Before the end of the second year of the
Employment Term, the Company, in its sole discretion, may extend
the term (one (1) time) by up to one (1) year by delivering notice
to that effect to Executive. The Company reserves the
right at any time during Executive’s employment to terminate
Executive’s employment with or without Cause (as defined
below). The Executive’s employment shall end upon
the earliest to occur of (i) Executive’s death or a
termination of Executive’s employment by the Company due to
disability, (ii) a termination of Executive’s employment by
the Company for Cause, (iii) a termination of Executive’s
employment by the Company without Cause, (iv) a termination by the
Executive of his employment with the Company for Good Reason (as
defined below), or (v) a resignation by the Executive other than
for Good Reason.
5.
Definitions in Connection with Termination of Employment
.
(a) “Cause”
shall mean the Executive’s (i) intentional dishonesty or (ii)
willful refusal to perform the duties of his office persisting at
least 30 days after written notice specifying the respects in which
such duties are not being performed.
(b) “Good
Reason” shall mean the expiration of the Employment Term or
any of the following actions without the Executive’s consent,
(i) any substantial diminution in the position or authority of the
Executive which is inconsistent with the Executive’s then
current position or authority, (ii) any reduction of the
Executive’s Base Salary (other than a percentage reduction
applicable to all other Executives) or exclusion of the Executive
from compensation or benefit plans made available to other
Executives in his salary grade, (iii) any requirement by the
Company that the Executive relocate his primary office or location
to any office or location from Singapore during the first two years
of the Employment Term, in the absence of extraordinary
circumstances that the Board of Directors of the Company determines
in good faith require Executive’s return to the United
States, (iv) failure of the Company to relocate Executive and his
family from Singapore at the end of first two (2) years of the
Employment Term (regardless of whether the Employment Term is
extended pursuant to Section 4), (v) failure by any successor to
the Company to expressly adopt this Agreement, and (vi) any failure
of the Company to comply with and satisfy any of the material terms
or conditions of this Agreement.
(c) “Qualifying
Termination” shall mean termination of Executive’s
employment under Section 4(iii) or Section 4(iv) of this Agreement;
provided that in the case of a termination pursuant to Section
4(iv), such termination occurs within 90 days after the Executive
has knowledge of the existence of a Good Reason (as defined above)
termination event. Any such termination shall constitute
a separation from service as defined under Treas. Reg.
§1.409A-1(h).
6.
Qualifying Termination; Severance Benefits
. In the event of a Qualifying Termination:
(a) Subject
to the conditions set forth in this Section 6, the Company shall
pay to the Executive an amount in cash equal to two (2) times the
Executive’s annual base salary. Annual Base Salary
shall be calculated according to the annual Base Salary rate in
effect on the date of termination of employment (“Termination
Date”). Such amount shall be paid in the form of
salary continuation in equal installments over 24 months payable on
such Executive’s regularly scheduled pay dates beginning
within 60 days following such Termination Date. In no
event shall the Executive be permitted to determine the calendar
year in which such payments begin. If, however, the
Company provides a release, substantially in the form attached as
Exhibit A, no later than the 10 th business day following the Executive’s
Termination Date, the Executive shall be entitled to only
one-quarter of such amount payable over six months unless the
Executive executes such release within 21 days or 45 days, as
provided therein, of the later of the date he receives the release
or his Termination Date and does not revoke it within the required
seven-day revocation period. Notwithstanding the
foregoing regarding the time of payment, if on the
Executive’s Termination Date, stock of the Company (or any
other entity considered a single employer with the Company under
Treas. Reg. §1.409A-1(g) or any successor thereto) is publicly
traded on an established securities market or otherwise, severance
payments otherwise payable during the period beginning on the
Termination Date and ending on the 12-month anniversary of the
Termination Date shall be paid in a lump-sum on the first business
day after the six-month anniversary of the Termination
Date. Remaining severance payments shall be paid in
equal installments on such Executive’s regularly scheduled
pay dates beginning with the first regularly scheduled pay date
occurring after the six-month anniversary of the Termination Date
and ending 18 months later.
(b) Notwithstanding
the foregoing, if the foregoing payment alone or together with any
other payments and/or benefits to be made to, or for the benefit
of, the Executive, whether pursuant to this Agreement or otherwise,
would subject Executive to excise tax under Section 4999 of the
Code by virtue being deemed an excess parachute payment, such
payments and/or benefits (jointly, “Parachute
Payments”) shall be reduced so that the aggregate payments
are ten dollars less than three times the Executive’s base
amount, as defined in Section 280G of the Code, if such reduction
would result in the Executive retaining, on an after-tax basis, an
amount greater than the Executive would otherwise retain after
payment of all taxes, including the parachute excise tax, if such
payments were not reduced. Any reduction in Parachute
Payments caused by reason of this subsection (b) shall be applied
in the manner least economically detrimental to the
Executive. In the event reduction of two or more types
of payments would be economically equivalent, the reduction shall
be applied pro-rata to such types of payments.
(c) The
Executive and the Executive’s spouse and dependent children
shall be eligible for medical, prescription drug, dental and vision
insurance coverage at the same rate of premium payment as in effect
before the Qualifying Termination for the number of months for
which severance is payable under Section 6. The
continued coverage provided to Executive under this subsection,
including cost-sharing, shall be substantially identical to the
coverage provided during such period by the Company for its
employees generally, as if Executive had continued in employment
during such period and shall meet the requirements for COBRA health
care continuation coverage. The COBRA health care
continuation coverage period under section 4980B of the Code shall
begin to run after the continued health coverage period provided
under this Section 6(c). If permitted by the insurer of
the Company-provided term life insurance, participation may
continue for six months following the Termination Date.
(d) The
Executive shall be entitled to equity compensatio
