KULICKE AND SOFFA INDUSTRIES, INC. Incentive Stock Option Agreement

Exhibit 99.2

KULICKE AND SOFFA INDUSTRIES, INC.

Incentive Stock Option Agreement

This Incentive Stock Option Agreement (the “Option Agreement”), dated as          of the day of              , 20      (the “Grant Date”), is between Kulicke and Soffa Industries, Inc. (the “Company”), and                                  (the “Optionee”), an employee of the Company, pursuant to the Kulicke and Soffa Industries, Inc. 1998 Employee Incentive Stock Option and Non-Qualified Stock Option Plan as Amended and Restated Effective March 21, 2003 (the “Plan”).

WHEREAS, the Company desires to give the Optionee the opportunity to purchase shares of common stock of the Company (“Shares”) in accordance with the provisions of the Plan, a copy of which is attached hereto;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Grant of Option . The Company hereby grants to the Optionee the right and option (the “Option”) to purchase all or any part of an aggregate of                  Shares. The Option is in all respects limited and conditioned as hereinafter provided, and is subject in all respects to the terms and conditions of the Plan now in effect and as it may be amended from time to time (but only to the extent that such amendments apply to outstanding options). Such terms and conditions are incorporated herein by reference, made a part hereof, and shall control in the event of any conflict with any other terms of this Option Agreement. The Option granted hereunder is intended to be an incentive stock option (“ISO”) as such term is defined in section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and not a nonqualified stock option.

2. Exercise Price . The exercise price of the Shares covered by this Option shall be $          per Share. It is the determination of the Committee that on the Grant Date the exercise price was not less than the greater of (i) 100% (110% for an Optionee who owns more than 10% of the total combined voting power of all shares of stock of the Company or of a Related Corporation – a “More-Than-10% Owner”) of the “Fair Market Value” (as defined in the Plan) of a Share, or (ii) the par value of a Share.

3. Term . Unless earlier terminated pursuant to any provision of the Plan or of this Option Agreement, this Option shall expire on                   , 20      (the “Expiration Date”), which date is not more than ten years (five years in the case of a More-Than-10% Owner) from the Grant Date. This Option shall not be exercisable on or after the Expiration Date.

4. Exercise of Option . The Optionee shall have the right to purchase from the Company, on and after the following dates, the following number of Shares, provided the Optionee has not terminated his or her employment as of the applicable vesting date:

Once the Option becomes exercisable, it will remain exercisable until it is exercised or until it terminates.

5. Method of Exercising Option . Subject to the terms and conditions of this Option Agreement and the Plan, the Option may be exercised by written notice to the Company at its principal office, which is presently located at 1005 Virginia Drive, Fort Washington, Pennsylvania 19034. The form of such notice is attached hereto and shall state the election to exercise the Option and the number of whole Shares with respect to which it is being exercised; shall be signed by the person or persons so exercising the Option; and shall be accompanied by payment of the full exercise price of such Shares. Only full Shares will be issued.

The exercise price shall be paid to the Company –

(a) in cash, or by certified check, bank draft, or money order;

(b) through the delivery of Shares previously held by the Optionee provided such method of payment is then permitted under applicable law and subject to any minimum holding period established by the Committee for Shares acquired directly from the Company and provided such Shares are not subject to repurchase, forfeiture or other similar conditions.

(c) by delivering a properly executed notice of exercise of the Option to the Company and a broker, with irrevocable instructions to the broker promptly to deliver to the Company the amount of sale or loan proceeds necessary to pay the exercise price of the Option and any required tax withholding;

(d) in any combination of (a), (b), or (d) above.

In the event the exercise price is paid, in whole or in part, with Shares, the portion of the exercise price so paid shall be equal to the Fair Market Value of the Shares surrendered on the date of exercise.

Upon receipt of notice of exercise and payment, the Company shall deliver a certificate or certificates representing the Shares with respect to which the Option is so exercised. The Optionee shall obtain the rights of a shareholder upon receipt of the certificate(s) representing such Shares.

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Such certificate(s) shall be registered in the name of the person so exercising the Option (or, if the Option is exercised by the Optionee and if the Optionee so requests in the notice exercising the Option, shall be registered in the name of the Optionee and the Optionee’s spouse, jointly, with right of survivorship) and shall be delivered as provided above to, or upon the written order of, the person exercising the Option. In the event the Option is exercised by any person or persons after the death or “Disability” (as defined in the Plan) of the Optionee, the notice shall be accompanied by appropriate proof of the right of such person or persons to exercise the Option.

6. Non-Transferability of Option . This Option is not assignable or transferable, in whole or in part, by the Optionee other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee or, in the event of his or her Disability, by his or her guardian or legal representative.

7. Termination of Employment . If the Optionee’s employment with the Company and all Re