As filed with the Securities and Exchange Commission on August 16, 2002
Registration No. 333-82910
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 4
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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KULICKE AND SOFFA INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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PENNSYLVANIA 23-1498399
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
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2101 Blair Mill Road
Willow Grove, Pennsylvania 19090
(215) 784-6000
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
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Clifford G. Sprague
Senior Vice President and Chief Financial Officer
2101 Blair Mill Road
Willow Grove, Pennsylvania 19090
(215) 784-6000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
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Copies to:
Jeffrey C. Moore, Esquire H. John Michel, Jr., Esquire
Kulicke and Soffa Industries, Inc. Drinker Biddle & Reath LLP
2101 Blair Mill Road One Logan Square
Willow Grove, Pennsylvania 19090 18th & Cherry Streets
(215) 784-6000 Philadelphia, PA 19103-6996
(215) 988-2700
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
the Registrant, depending on market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED August 16, 2002
PROSPECTUS
$250,000,000
[LOGO]
KULICKE AND SOFFA INDUSTRIES, INC.
Common Stock
Preferred Stock
Senior Debt Securities
Senior Subordinated Debt Securities
Subordinated Debt Securities
Warrants
Units
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Kulicke & Soffa, directly or through underwriters designated from time to
time, may offer, issue and sell, together or separately, (i) shares of common
stock, (ii) shares of preferred stock, (iii) debt securities, which may be
senior debt securities, senior subordinated debt securities or subordinated debt
securities, (iv) warrants to purchase common stock, preferred stock, debt
securities and (v) units consisting of two or more classes of the securities
registered hereunder.
The form in which we are to issue the securities, their specific
designation, aggregate principal amount or aggregate initial offering price,
maturity, if any, rate and times of payment of interest or dividends, if any,
redemption, conversion, and sinking fund terms, if any, voting or other rights,
if any, exercise price and detachability, if any, and other specific terms will
be described in a supplement to this prospectus, together with the terms, of the
offering of such securities.
See "Risk Factors" beginning on page 3 to read about factors you should
consider before buying our securities.
Our common stock is traded on the Nasdaq National Market under the symbol
"KLIC." Any prospectus supplement will also contain information, where
applicable, as to any other listing on a securities exchange of the securities
covered by such prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or the accompanying prospectus supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
This prospectus may not be used to sell securities unless it is accompanied
by a prospectus supplement.
The date of this prospectus is ____________, 2002.
TABLE OF CONTENTS
Summary ................................................................... 2
Risk Factors .............................................................. 3
Selected Financial Data ................................................... 14
Forward-Looking Statements ................................................ 14
Use of Proceeds ........................................................... 15
Ratio of Earnings to Fixed Charges ........................................ 15
General Description of Securities ......................................... 15
Description of Capital Stock .............................................. 16
Description of Debt Securities ............................................ 18
Description of Warrants ................................................... 33
Description of Units ...................................................... 33
Plan of Distribution ...................................................... 34
Legal Matters ............................................................. 35
Experts ................................................................... 35
Where You Can Find More Information ....................................... 35
-1-
Summary
Kulicke & Soffa
The following summary highlights selected information regarding Kulicke and
Soffa Industries, Inc. It does not contain all of the information that is
important to you. You should carefully read this entire prospectus and any
prospectus supplement, together with the other documents to which this
prospectus and any prospectus supplement refers you. In addition, you should
carefully consider the risks and uncertainties of an investment in us described
under the caption "Risk Factors" or in the applicable prospectus supplement.
Kulicke & Soffa designs, manufactures and markets capital equipment,
packaging materials, a broad range of fixtures used to test semiconductor wafers
and devices, as well as, applies solder bumps to silicon wafers (referred to as
flip chip bumping) to companies that manufacture and assemble semiconductor
devices. Kulicke & Soffa also services, maintains, repairs and upgrades assembly
equipment, licenses its flip chip bumping process technology and manufactures
and markets advanced substrates. These substrates consist of multiple layers of
laminate applied to a core substrate which enables dense electrical connections
(referred to as high density interconnect substrates). Our business is currently
divided into four segments: equipment, packaging materials, test interconnect
solutions and advanced packaging technologies.
Historically, the demand for semiconductors and our semiconductor assembly
equipment has been volatile, with sharp periodic downturns and slowdowns. For
instance, a strong upturn in the semiconductor industry for the majority of
fiscal 2000 resulted in record revenues and earnings in that year. This industry
upturn was followed by a severe industry downturn in fiscal 2001, which is
continuing in fiscal 2002.
To keep pace with the constant advance of technology in the semiconductor
industry, Kulicke & Soffa continuously adds to its product and technology
portfolio through acquisitions and internal development so as to offer a broad
range of packaging solutions to its customers. Kulicke & Soffa believes this
strategy has positioned it to enhance its leading position in traditional wire
bonding methodologies while also establishing leadership in advanced packaging
technologies such as flip chip and wafer level packaging. These newer
technologies offer the superior performance characteristics required to support
the latest, most sophisticated semiconductor designs.
Kulicke & Soffa believes its expanding portfolio of packaging, flip chip
bumping and technology, test fixtures and advanced substrates enables it to
better balance its revenues between products that are capacity driven, and thus
more cyclically purchased primarily during industry expansions, and those that
are run-rate or technology driven and are thus more likely to be purchased
throughout the semiconductor cycle. Kulicke & Soffa believes it is the only
major supplier to the semiconductor assembly industry that can provide customers
with semiconductor assembly equipment along with a broad range of complimentary
packaging materials and test fixtures that are optimized for use with its
assembly equipment.
Kulicke & Soffa was incorporated in Pennsylvania in 1956. Our principal
offices are located at 2101 Blair Mill Road, Willow Grove, Pennsylvania 19090,
our telephone number is (215) 784-6000 and our website can be accessed at
www.kns.com. Information contained on our website does not constitute part of
this prospectus.
About This Prospectus
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission (the "SEC") using a "shelf" registration.
Under this shelf registration, we may sell any combination of the securities
described in this prospectus in one or more offerings up to an aggregate initial
offering price of $250,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described in Where You Can Find More Information.
- 2 -
Risk Factors
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations. Our business, financial
condition or results of operations could be materially adversely affected by any
of these risks. The trading price or value of our securities could decline due
to any of these risks, and you may lose all or part of your investment.
The semiconductor industry as a whole is volatile with sharp periodic
downturns and slowdowns
Our operating results are significantly affected by the capital
expenditures of large semiconductor manufacturers and their subcontract
assemblers and vertically integrated manufacturers of electronic systems.
Expenditures by semiconductor manufacturers and their subcontract assemblers and
vertically integrated manufacturers of electronic systems depend on the current
and anticipated market demand for semiconductors and products that use
semiconductors, such as personal computers, telecommunications equipment,
consumer electronics and automotive goods. Significant downturns in the market
for semiconductor devices or in general economic conditions reduce demand for
our products and materially and adversely affect our business, financial
condition and operating results.
Historically, the semiconductor industry has been volatile, with sharp
periodic downturns and slowdowns. These downturns have been characterized by,
among other things, diminished product demand, excess production capacity and
accelerated erosion of selling prices. This has severely and negatively affected
the industry's demand for capital equipment, including the assembly equipment
that we manufacture and market and, to a lesser extent, the packaging materials
and test interconnect solutions that we sell. In a significant downturn, orders
may be pushed out or cancelled, significantly reducing our backlog, sales may
decline rapidly and we may, among other things, be forced to undertake a
significant resizing and defer capital expenditures. Such downturns materially
and adversely affect our operating results and business and financial condition.
Our quarterly operating results fluctuate significantly and may continue to
do so in the future
In the past, our quarterly operating results have fluctuated significantly,
which we expect will continue to be the case. Although these fluctuations are
partly due to the volatile nature of
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the semiconductor industry, they also reflect the impact of other factors. Many
of the factors that affect our operating results are outside of our control.
Some of the factors that could cause our revenues and/or operating margins
to fluctuate significantly from period to period are:
. market downturns;
. the mix of products that we sell because, for example:
. some packaging materials have lower margins than assembly
equipment and test interconnect solutions;
. some lines of equipment are more profitable than others; and
. some sales arrangements have higher margins than others;
. the volume and timing of orders for our products and any order
postponements and cancellations by our customers;
. the cancellation, deferral or rescheduling of orders, because
virtually all orders are subject to cancellation, deferral or
rescheduling by the customer without prior notice and with limited or
no penalties;
. adverse changes in our pricing, or that of our competitors;
. higher than anticipated costs of development or production of new
equipment models;
. the availability and cost of key components for our products;
. market acceptance of our new products and upgraded versions of our
products;
. our announcement, or perception by others, that we will introduce new
or upgraded products, which could cause customers to delay purchasing
our products;
. the timing of acquisitions; and
. our competitors' introduction of new products.
Many of our expenses, such as research and development, selling, general
and administrative expenses and interest expense, do not vary directly with our
net sales. As a result, a decline in our net sales would adversely affect our
operating results. In addition, if we were to incur additional expenses in a
quarter in which we did not experience comparable increased net sales, our
operating results would decline. Factors that could cause our expenses to
fluctuate from period to period include:
. the timing and extent of our research and development efforts;
. severance, resizing and other costs of relocating facilities;
. inventory write-offs due to obsolescence; and
. inflationary increases in the cost of labor or materials.
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Because our revenues and operating results are volatile and difficult to
predict, we believe that period-to-period comparisons of our operating results
are not a good indication of our future performance.
Our business depends on attracting and retaining management, marketing and
technical employees who are in great demand
As is the case with many other technology companies, our success depends on
our ability to hire and retain qualified management, marketing and technical
employees. Competition is intense in personnel recruiting in the semiconductor
and semiconductor equipment industries, specifically with respect to some
engineering disciplines. In particular, we have experienced periodic shortages
of software engineers. If we are unable to continue to attract and retain the
technical and managerial personnel we require, our business, financial condition
and operating results could be materially and adversely affected.
We may not be able to rapidly develop and manufacture new and enhanced
products required to maintain or expand our business
We believe that our continued success will depend on our ability to
continuously develop and manufacture or acquire new products and product
enhancements on a timely and cost-effective basis. We also must introduce these
products and product enhancements into the market in response to customers'
demands for higher performance assembly equipment, leading-edge materials and
for test interconnect solutions customized to address rapid technological
advances in integrated circuit and capital equipment designs. Our competitors
may develop enhancements to or future generations of competitive products that
will offer superior performance, features and lower prices that may render our
products non-competitive. The development and commercialization of new products
may require significant capital expenditures over an extended period of time,
and some products that we seek to develop may never become profitable. In
addition, we may not be able to develop and introduce products incorporating new
technologies in a timely manner or at a price that will satisfy our customers'
future needs or achieve market acceptance.
We may not be able to accurately forecast demand for our product lines
We typically operate our business with a relatively short backlog and order
supplies and otherwise plan production based on internal forecasts of demand.
Due to these factors, we have in the past, and may again in the future, fail to
accurately forecast demand, in terms of both volume and configuration for either
our current or next-generation wire bonders. This has led to and may in the
future lead to delays in product shipments or, alternatively, an increased risk
of inventory obsolescence. If we fail to accurately forecast demand for our
products, including assembly equipment, packaging materials, test interconnect
solutions and advanced packaging technologies, our business, financial condition
and operating results could be materially and adversely affected.
-5-
Advanced packaging technologies other than wire bonding may render some of
our products obsolete and our strategy for pursuing these other
technologies may be costly and ineffective
Advanced packaging technologies have emerged that may improve device
performance or reduce the size of an integrated circuit package, as compared to
traditional die and wire bonding. These technologies include flip chip and wafer
scale packaging. In general, these advanced technologies eliminate the need for
wires to establish the electrical connection between a die and its package. For
some devices, these advanced technologies have largely replaced wire bonding. We
cannot assure you that the semiconductor industry will not, in the future, shift
a significant part of its volume into advanced packaging technologies, such as
those discussed above. If a significant shift to advanced technologies were to
occur, demand for our wire bonders and related packaging materials and test
interconnect solutions would diminish.
One component of our strategy is to develop next-generation technologies to
allow us to prepare for any eventual decline in the use of wire bonding
technology. There are a number of risks associated with our strategy to
diversify into new technologies:
. the technologies that we have invested in represent only some of the
advanced technologies that may one day supersede wire bonding;
. other companies are developing similar or alternative advanced
technologies;
. wire bonding may continue as the dominant technology for longer than
we anticipate;
. the cost of developing advanced technologies may be significantly
greater than we expect; and
. we may not be able to develop the necessary technical, research,
managerial and other related skills to develop, produce, market and
support these advanced technologies.
As a result of these risks, we cannot assure you that any of our attempts
to develop alternative technologies will be profitable or that we will be able
to realize the benefits that we anticipate from them.
A decline in demand for any of our products could cause our revenues to
decline significantly
If demand for, or pricing of, our wire bonders, advanced packaging
technology or test interconnect solutions declines because our competitors
introduce superior or lower cost systems, the semiconductor industry changes or
because of other events beyond our control, our business, financial condition
and operating results could be materially and adversely affected.
-6-
Because a small number of customers account for most of our sales, our
revenues could decline if we lose any significant customer
The semiconductor manufacturing industry is highly concentrated, with a
relatively small number of large semiconductor manufacturers and their
subcontract assemblers and vertically integrated manufacturers of electronic
systems purchasing a substantial portion of semiconductor assembly equipment,
packaging materials, test interconnect solutions and flip chip bumping services
and technology. Sales to a relatively small number of customers account for a
significant percentage of our net sales. In fiscal 2001, no customer accounted
for more than 10% of our net sales. In fiscal 2000, sales to Advanced
Semiconductor Engineering and Amkor Technologies accounted for 15% and 10% of
our net sales, respectively. In fiscal 1999 no customer accounted for more than
10% of total net sales.
We expect that sales of our products to a limited number of customers will
continue to account for a high percentage of our net sales for the foreseeable
future. If we lose orders from a significant customer, or if a significant
customer reduces its orders substantially, these losses or reductions will
materially and adversely affect our business, financial condition and operating
results.
We depend on a small number of suppliers for raw materials, components and
subassemblies and, if our suppliers do not deliver their products to us, we
may be unable to deliver our products to our customers
Our products are complex and require raw materials, components and
subassemblies of an exceptionally high degree of reliability, accuracy and
performance. We rely on subcontractors to manufacture many of the components and
subassemblies for our products and we rely on sole source suppliers for some
important components and raw materials, including gold. As a result, we are
exposed to a number of significant risks, including:
. loss of control over the manufacturing process;
. changes in our manufacturing processes, dictated by changes in the
market, that may delay our shipments;
. our inadvertent use of defective or contaminated raw materials;
. the relatively small operations and limited manufacturing resources of
some of our contractors and suppliers, which may limit their ability
to manufacture and sell subassemblies, components or parts in the
volumes we require and at quality levels and prices we can accept;
. reliability and quality problems we experience with certain key
subassemblies provided by single source suppliers;
. the exposure of our suppliers and subcontractors to disruption for a
variety of reasons, including work stoppage, fire, earthquake,
flooding or other natural disasters;
. delays in the delivery of raw materials or subassemblies, which, in
turn, may cause delays in some of our shipments; and
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. the loss of suppliers as a result of the consolidation of suppliers in
the industry.
If we are unable to deliver products to our customers on time for these or
any other reasons, if we are unable to meet customer expectations as to cycle
time or if we do not maintain acceptable product quality or reliability in the
future, our business, financial condition and operating results would be
materially and adversely affected.
We are expanding and diversifying our operations, and if we fail to manage
our expanding and more diverse operations successfully, our business and
financial results may be materially and adversely affected
In recent years, we have broadened our product offerings to include
significantly more packaging materials and advanced packaging services and
technology. Additionally, during fiscal 2001, we acquired two companies that
design and manufacture test interconnect solutions, Cerprobe Corporation and
Probe Technology Corporation, and we have combined their operations to create
our test division. Although our strategy is to diversify and expand our products
and services, we may not be able to develop, acquire, introduce or market new
products in a timely or cost-effective manner and the market may not accept any
new or improved products we develop, acquire, introduce or market.
Our diversification into new lines of business and our expansion through
acquisitions and alliances has increased, and is expected to continue to
increase, demands on our management, financial resources and information and
internal control systems. Our success depends in significant part on our ability
to manage and integrate acquisitions, joint ventures and other alliances and to
continue to implement, improve and expand our systems, procedures and controls.
If we fail to do this at a pace consistent with the development of our business,
our business, financial condition and operating results could be materially and
adversely affected.
As we expand our operations, we expect to encounter a number of risks,
which will include:
. risks associated with hiring additional management and other critical
personnel;
. risks associated with adding equipment and capacity; and
. risks associated with increasing the scope, geographic diversity and
complexity of our operations.
In addition, sales and servicing of packaging materials, test interconnect
solutions and advanced packaging technologies often require different
organizational and managerial skills than sales of traditional wire bonding
technology. We cannot assure you that we will be able to develop the necessary
skills to successfully produce and market these different products.
-8-
We may be unable to continue to compete successfully in the highly
competitive semiconductor equipment, packaging materials, test interconnect
and advanced packaging technology industries
The semiconductor equipment, packaging materials, test interconnect
solutions and advanced packaging technology industries are intensely
competitive. In the semiconductor equipment, test interconnect solutions and
advanced packaging technology markets, the significant competitive factors
include performance, quality, customer support and price, and in the
semiconductor packaging materials industry include price, delivery and quality.
In each of our markets, we face competition and the threat of competition
from established competitors and potential new entrants, some of which have
significantly greater financial, engineering, manufacturing and marketing
resources than we have. Some of these competitors are Asian and European
companies that have had and may continue to have an advantage over us in
supplying products to local customers because many of these customers appear to
prefer to purchase from local suppliers, without regard to other considerations.
We expect our competitors to improve their current products' performance,
and to introduce new products and materials with improved price and performance
characteristics. New product and materials introductions by our competitors or
by new market entrants could hurt our sales. If a particular semiconductor
manufacturer or subcontract assembler selects a competitor's product or
materials for a particular assembly operation, we may not be able to sell
products or materials to that manufacturer or assembler for a significant period
of time because manufacturers and assemblers sometimes develop lasting relations
with suppliers, and assembly equipment in our industry often goes years without
requiring replacement. In addition, we may have to lower our prices in response
to price cuts by our competitors, which could materially and adversely affect
our business, financial condition and operating results. We cannot assure you
that we will be able to continue to compete in these or other areas in the
future.
We sell most of our products to customers that are located outside of the
United States, we have substantial manufacturing operations located outside
of the United States, and we rely on independent foreign distribution
channels for certain product lines, all of which subject us to risks from
changes in trade regulations, currency fluctuations, political instability
and war
Approximately 62% of our net sales for fiscal 2001, 91% of our net sales
for fiscal 2000 and 83% of our net sales for fiscal 1999 were attributable to
sales to customers for delivery outside of the United States. We expect our
sales outside of the United States to continue to represent a large portion of
our future revenues. Our future performance will depend, in significant part, on
our ability to continue to compete in foreign markets, particularly in Asia.
Asian economies have been highly volatile, resulting in significant fluctuation
in local currencies, and political and economic instability. These conditions
may continue or worsen, which could materially and adversely affect our
business, financial condition and operating results. We also rely on non-United
States suppliers for materials and components used in the equipment that we
sell and
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we maintain substantial manufacturing operations in countries other than the
United States, including operations in Israel and Singapore. We manufacture
substantially all of our automatic ball bonders in Singapore and we have begun
to build a facility in China to manufacture capillaries, saw blades and selected
test fixtures. In addition, we rely on independent foreign distribution
channels for certain product lines. As a result, a major portion of our business
is subject to the risks associated with international commerce, such as risks of
war and civil disturbances or other events that may limit or disrupt markets;
expropriation of our foreign assets; longer payment cycles in foreign markets;
international exchange restrictions; the difficulties of staffing and managing
dispersed international operations; tariff and currency fluctuations; changing
political conditions; foreign governments' monetary policies; and less
protective foreign intellectual property laws.
Because most of our foreign sales are denominated in United States dollars,
an increase in value of the United States dollar against foreign currencies,
particularly the Japanese yen, will make our products more expensive than those
offered by some of our foreign competitors. Our ability to compete overseas in
the future could be materially and adversely affected by a strengthening of the
United States dollar against foreign currencies.
The ability of our international operations to prosper also will depend, in
part, on a continuation of current trade relations between the United States and
foreign countries in which our customers operate and in which our subcontractors
and materials suppliers have operations. A change toward more protectionist
trade legislation in either the United States or foreign countries in which we
do business, such as a change in the current tariff structures, export
compliance or other trade policies, could materially and adversely affect our
ability to sell our products in foreign markets.
Our success depends in part on our intellectual property, which we may be
unable to protect
Our success depends in part on our proprietary technology. To protect this
technology, we rely principally on contractual restrictions (such as
nondisclosure and confidentiality agreements) in our agreements with employees,
vendors, consultants and customers and on the common law of trade secrets and
proprietary "know-how." We also rely, in some cases, on patent and copyright
protection, which may become more important to us as we expand our investment in
advanced packaging technologies. We may not be successful in protecting our
technology for a number of reasons, including:
. our competitors may independently develop technology that is similar
to or better than ours;
. employees, vendors, consultants and customers may not abide by their
contractual agreements, and the cost of enforcing those agreements may
be prohibitive, or those agreements may prove to be unenforceable or
more limited than we anticipate;
. foreign intellectual property laws may not adequately protect our
intellectual property rights; and
-10-
. our patent and copyright claims may not be sufficiently broad to
effectively protect our technology; patents or copyrights may be
challenged, invalidated or circumvented; and we may otherwise be
unable to obtain adequate protection for our technology.
In addition, our partners and alliances may also have rights to technology
that we develop through these alliances. We may incur significant expense to
protect or enforce our intellectual property rights. If we are unable to protect
our intellectual property rights, our competitive position may be weakened.
Third parties may claim we are infringing on their intellectual property,
which could cause us to incur significant litigation costs or other
expenses, or prevent us from selling some of our products
The semiconductor industry is characterized by rapid technological change,
with frequent introductions of new products and technologies. As a result,
industry participants often develop products and features similar to those
introduced by others, increasing the risk that their products and processes may
give rise to claims that they infringe on the intellectual property of others.
We may unknowingly infringe on the intellectual property rights of others and
incur significant liability for that infringement. If we are found to infringe
on the intellectual property rights of others, we could be enjoined from
continuing to manufacture, market or use the affected product, or be required to
obtain a license to continue manufacturing or using the affected product. A
license could be very expensive to obtain or may not be available at all.
Similarly, changing our products or processes to avoid infringing the rights of
others may be costly or impractical.
Occasionally, third parties assert that we are, or may be, infringing on or
misappropriating their intellectual property rights. In these cases, we will
defend against claims or negotiate licenses where we consider these actions
appropriate. Intellectual property cases are uncertain and involve complex legal
and factual questions. If we become involved in this type of litigation, it
could consume significant resources and divert our attention from our business.
-11-
Some of our customers are parties to litigation brought by the Lemelson
Medical, Education and Research Foundation Limited Partnership (the "Lemelson
Foundation"), in which the Lemelson Foundation claims that certain manufacturing
processes used by those customers infringe patents held by the Lemelson
Foundation. We have never been named a party to any such litigation. Some
customers have requested that we indemnify them to the extent their liability
for these claims arises from use of our equipment. We do not believe that
products sold by us infringe valid Lemelson patents. If a claim for contribution
was brought against us, we believe we would have valid defenses to assert and
also would have rights to contribution and claims against our suppliers. We have
never incurred any material liability with respect to the Lemelson claims or any
other pending intellectual property claim and we do not believe that these
claims will materially and adversely affect our business, financial condition or
operating results. The ultimate outcome of any infringement or misappropriation
claim that might be made, however, is uncertain and we cannot assure you that
the resolution of any such claim will not materially and adversely affect our
business, financial condition and operating results.
We may be materially and adversely affected by environmental and safety
laws and regulations
We are subject to various and frequently changing federal, state, local and
foreign laws and regulations governing, among other things, the generation,
storage, use, emission, discharge, transportation and disposal of hazardous
material, investigation and remediation of contaminated sites and the health and
safety of our employees. Increasingly, public attention has focused on the
environmental impact of manufacturing operations and the risk to neighbors of
chemical releases from such operations.
Proper waste disposal plays an important role in the operation of our
manufacturing plants. In many of our facilities we maintain wastewater treatment
systems that remove metals and other contaminants from process wastewater. These
facilities operate under effluent discharge permits that must be renewed
periodically. A violation of those permits may lead to revocation of the
permits, fines, penalties or the incurrence of capital or other costs to comply
with the permits.
In the future, applicable land use and environmental regulations may: (1)
impose upon us the need for additional capital equipment or other process
requirements, (2) restrict our ability to expand our operations, (3) subject us
to liability, and/or (4) cause us to curtail our operations. We cannot assure
you that any costs or liabilities associated with complying with these
environmental laws will not materially and adversely affect our business,
financial condition and operating results.
Anti-takeover provisions in our articles of incorporation and bylaws and
Pennsylvania law may discourage other companies from attempting to acquire
us
Some provisions of our articles of incorporation and bylaws and of
Pennsylvania law may discourage some transactions where we would otherwise
experience a change in control. For example, our articles of incorporation and
bylaws contain provisions that:
. classify our board of directors into four classes, with one class
being elected each year;
. permit our board to issue "blank check" preferred stock without
shareholder approval; and
. prohibit us from engaging in some types of business combinations with
a holder of 20% or more of our voting securities without
super-majority board or shareholder approval.
Further, under the Pennsylvania Business Corporation Law, because our
bylaws provide for a classified board of directors, shareholders may only remove
directors for cause. These
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provisions and some provisions of the Pennsylvania Business Corporation Law
could delay, defer or prevent us from experiencing a change in control and may
adversely affect our common stockholders' voting and other rights.
We may be unable to generate enough cash to service our debt
Our ability to make payments on our indebtedness, and to fund planned
capital expenditures and other activities will depend on our ability to generate
cash in the future. This, to some extent, is subject to the volatile nature of
our business, and general economic, competitive and other factors that are
beyond our control. If our current convertible debt is not converted to our
common shares, we will be required to make annual cash interest payments of
$14.9 million through fiscal 2005, $14.1 million in fiscal 2006 and $1.7 million
in fiscal 2007 on our $300 million of convertible subordinated debt. Principal
payments of $175.0 million and $125.0 million, on the convertible subordinated
debt are due in fiscal 2006 and 2007, respectively. Accordingly, we cannot
assure you that our business will generate sufficient cash flow to service our
debt. In addition, our gold supply agreement contains restrictions on the
ability of certain of our subsidiaries to declare and pay dividends to us.
We may need to refinance all or a portion of our indebtedness on or before
maturity. We cannot assure you that we will be able to refinance any of our
indebtedness on commercially reasonable terms, if at all.
Terrorist attacks, such as the attacks that occurred in New York and
Washington, D.C. on September 11, 2001, and other acts of violence or war
may affect the markets in which we operate and our profitability
Terrorist attacks may negatively affect our operations and your investment.
There can be no assurance that there will not be further terrorist attacks
against the United States or United States businesses. These attacks or armed
conflicts may directly impact our physical facilities or those of our suppliers
or customers. Our primary facilities include administrative, sales and R&D
facilities in the United States of America and manufacturing facilities in the
United States, Israel and Singapore. Also, these attacks have disrupted the
global insurance and reinsurance industries with the result that we may not be
able to obtain insurance at historical terms and levels for all of our
facilities. Furthermore, these attacks may make travel and the transportation of
our supplies and products more difficult and more expensive and ultimately
affect the sales of our products in the United States and overseas. As a result
of terrorism, the United States has entered into an armed conflict which could
have a further impact on our domestic and internal sales, our supply chain, our
production capability and our ability to deliver product to our customers.
Political and economic instability in some regions of the world may also result
and could negatively impact our business. The consequences of any of these armed
conflicts are unpredictable, and we may not be able to foresee events that could
have an adverse effect on our business or your investment.
-13-
Our stock price has been and is likely to continue to be highly
volatile, which may make the common stock difficult to resell at
attractive times and prices
In recent years, the price of our common stock has fluctuated greatly.
These price fluctuations have been rapid and severe and have left investors
little time to react. The price of our common stock may continue to fluctuate
greatly in the future due to a variety of factors, including:
. quarter to quarter variations in our operating results;
. shortfalls in our revenue or earnings from levels expected by
securities analysts;
. announcements of technological innovations or new products by us or
other companies; and
. slowdowns or downturns in the semiconductor industry.
SELECTED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements, related notes and other
financial information included herein and incorporated herein by reference.
(in thousands, except per share amounts)
Fiscal Years Ended September 30,
-----------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------ -------------- -------------- ------------- -------------
Statement of Operations Data:
Net sales:
Equipment $391,721 $ 302,107 $ 269,854 $ 692,062 $ 249,952
Packaging materials 110,186 108,933 124,450 185,570 150,945
Test (1) - - - - 116,890
Advanced packaging technology - - 4,613 21,641 37,216
------------ -------------- -------------- ------------- -------------
Total net sales 501,907 411,040 398,917 899,273 555,003
------------ -------------- -------------- ------------- -------------
Cost of goods sold:
Equipment 228,854 191,948 188,958 419,732 166,359
Packaging materials 89,148 82,259 90,326 130,548 110,570
Test (1) - - - - 84,401
Advanced packaging technology - - 6,098 22,897 31,274
------------ -------------- -------------- ------------- -------------
Total cost of goods sold (1) 318,002 274,207 285,382 573,177 392,604
------------ -------------- -------------- ------------- -------------
Operating expenses:
Equipment 97,143 107,083 92,157 120,244 105,609
Packaging materials 21,029 24,553 23,500 32,876 31,088
Test - - - - 66,148
Advanced packaging technology - - 5,314 19,096 25,395
Corporate 8,070 9,353 12,296 15,421 15,723
------------ -------------- -------------- ------------- -------------
Total operating expenses (1) (2) 126,242 140,989 133,267 187,637 243,963
------------ -------------- -------------- ------------- -------------
Income (loss) from operations:
Equipment 65,724 3,076 (11,261) 152,086 (22,016)
Packaging materials 9 2,121 10,624 22,146 9,287
Test - - - - (33,659)
Advanced packaging technology - - (6,799) (20,352) (19,453)
Corporate (8,070) (9,353) (12,296) (15,421) (15,723)
------------ -------------- -------------- ------------- -------------
Total income (loss) from operations (1) (2) 57,663 (4,156) (19,732) 138,459 (81,564)
------------ -------------- -------------- ------------- -------------
Interest income (expense), net 820 5,514 3,547 4,719 (5,535)
Equity in loss of joint ventures (3) (6,701) (8,715) (10,000) (1,221) -
Other income (1) - - - - 8,016
------------ -------------- -------------- ------------- -------------
Income (loss) before taxes, cumulative effect of
change in accounting principle and minority interest 51,782 (7,357) (26,185) 141,957 (79,083)
Provision (benefit) for income taxes 13,463 (1,917) (8,221) 40,149 (21,643)
Cumulative effect of change in accounting principle,
net of taxes (1) - - - - (8,163)
Minority interest - - 1,018 1,437 352
------------ -------------- -------------- ------------- -------------
Net income (loss) as previously reported $38,319 $ (5,440) $(16,946) $ 103,245 $(65,251)
Addback:
Goodwill amortization, net of tax (7) $ 1,561 $ 1,547 $ 1,689 $ 1,873 9,587
------------ -------------- -------------- ------------- -------------
Pro forma net income (loss) (7) $39,880 $ (3,893) $(15,257) $ 105,118 $(55,664)
============ ============== ============== ============= =============
(in thousands, except per share amounts)
Fiscal Years Ended September 30,
---------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------ -------------- ------------- ------------- -----------
Net income (loss) excluding cumulative effect of
change in accounting principle per share: (4)
Basic $ 0.92 $ (0.12) $ (0.36) $ 2.15 $ (1.17)
Diluted $ 0.90 $ (0.12) $ (0.36) $ 1.90 $ (1.17)
Cumulative effect of change in accounting principle,
net of tax per share: (4)
Basic $ - $ - $ - $ - $ (0.17)
Diluted $ - $ - $ - $ - $ (0.17)
Net income (loss) per share, as previously reported: (4)
Basic $ 0.92 $ (0.12) $ (0.36) $ 2.15 $ (1.34)
Diluted $ 0.90 $ (0.12) $ (0.36) $ 1.90 $ (1.34)
Goodwill amortization, net of tax per share: (4), (7)
Basic $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.20
Diluted $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.20
Pro forma net income (loss) per share: (4), (7)
Basic $ 0.96 $ (0.08) $ (0.32) $ 2.19 $ (1.14)
Diluted $ 0.94 $ (0.08) $ (0.32) $ 1.93 $ (1.14)
Shares used in per common share calculations:(4)
Basic 41,742 46,602 46,846 47,932 48,877
Diluted 42,856 46,602 46,846 56,496 48,877
Balance Sheet Data:
Cash, cash equivalents and short-term investments $115,587 $106,900 $39,345 $ 316,619 $ 202,928
Working capital 190,220 182,181 167,131 471,338 265,355
Total assets 376,819 342,584 378,145 731,502 777,426
Long-term debt (5) (6) 220 - - 175,000 301,511
Shareholders' equity 291,927 287,910 274,776 405,342 338,547
(1) During the first quarter of fiscal 2001, we purchased all the outstanding
stock of Cerprobe Corporation and Probe Technology Corporation. As a result
of these acquisitions, during the year ended September 30, 2001, we
recorded a pre-tax charge of approximately $11.7 million for the write-off
of in-process research and development.
We also recorded charges of $19.9 million for inventory write-downs, $4.2
million for severance for the elimination of 511 positions and other
related charges associated with a resizing of our workforce, $800 thousand
for asset impairment charges, and non-recurring other income of $8.0
million as the result of an insurance settlement. In fiscal 2001, we also
adopted SAB 101, resulting in a cumulative effect of an accounting change
charge of $8.2 million, net of tax. Additionally, cost of goods sold for
the year ended September 30, 2001 reflects $4.2 million of acquisition
related inventory step-up costs.
(2) In fiscal 2000, operating expense included the write-off of our investment
in our Advanced Polymer Solutions joint venture in the amount of $3.9
million and the reversal into income of $2.5 million of the severance
reserve that we established in fiscal 1999 for the elimination of
approximately 230 positions associated with the relocation of our automatic
ball bonder manufacturing from the United States to Singapore. In fiscal
1999, we purchased the advanced substrate technology and fixed assets used
in the design, development and manufacture of laminate substrates for $8.0
million. As a result of this purchase, we recorded a pre-tax charge of
approximately $3.9 million for the write-off of in-process research and
development. During fiscal 1999, we also recorded a pre-tax charge for
severance of approximately $4.0 million and asset write-off costs of
approximately $1.6 million in connection with the above mentioned move to
Singapore. In fiscal 1999, we also recorded approximately $0.4 million for
severance related to the reduction in workforce that began in fiscal 1998.
During fiscal 1998, we recorded pre-tax charges of $8.4 million for
severance and product discontinuance as a result of a slowdown in the
semiconductor industry.
(3) Equity in loss of joint ventures in fiscal 2000 consists solely of our
share of the loss of Advanced Polymer Solutions, LLC, a 50% owned joint
venture which has been dissolved. Equity in loss of joint ventures in
fiscal 1999 consists of $9.2 million of our share of the loss of Flip Chip
Technologies and $800 thousand of our share of the loss of Advanced Polymer
Solutions. Fiscal 1997 and 1998 consist solely of our share of the loss of
Flip Chip Technologies. Effective May 31, 1999, we increased our ownership
interest in Flip Chip from 51% to 73.6% by converting all our outstanding
loans and accrued interest to Flip Chip, which totaled $32.8 million, into
equity units and gained operating control of Flip Chip. We accounted for
the increase in our ownership by the purchase method of accounting and
began consolidating the results of Flip Chip into our financial statements
on June 1, 1999. In March 2001, we purchased the remaining equity units of
Flip Chip not previously owned by us. We currently own 100% of Flip Chip.
(4) On June 26, 2000, the Company's Board of Directors approved a two-for-one
stock split of its common stock. Pursuant to the stock split, each
shareholder of record at the close of business on July 17, 2000 received
one additional share for each common share held at the close of business on
that date. The additional shares were distributed on July 31, 2000. All
prior period earnings per share amounts have been restated to reflect the
two-for-one stock split. For fiscal years 1998, 1999 and 2001 only the
common shares outstanding have been used to calculate both the basic
earnings per common share and diluted earnings per common share because the
inclusion of potential common shares would be anti-dilutive due to the net
losses reported in those years. The after-tax interest expense recognized
in fiscal 2000 associated with the 4 3/4% Convertible Subordinated Notes
due 2006 that was added back to net income in order to compute diluted net
income per share was $4.3 million.
(5) Does not include letters of credit or foreign exchange contract
obligations.
(6) In August 2001, we issued $125.0 million in principal amount of 5 1/4%
Convertible Subordinated Notes due 2006. In December 1999, we issued $175.0
million in principal amount of 4 3/4% Convertible Subordinated Notes due
2006.
(7) Reflects pro-forma results as if the adoption of SFAS 142 Goodwill and
Intangible Assets had occurred for all periods presented. The adjustments
reflect an add-back of amortization expense related to goodwill, net of
tax, which would not have occurred under the provisions of the standard. As
part of the adoption of SFAS 142, there were no indefinite lived
intangibles identified, and there was no change to the estimated useful
lives of existing intangible assets. Results in fiscal 1998 reflect an
impairment charge of $948 thousand related to the write-off of goodwill
associated with the discontinuance of certain die bonder products which the
company had acquired in 1994.
Forward-Looking Statements
This prospectus contains or incorporates by reference certain statements
and information that are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements include, but are not
limited to, statements that relate to our future revenue, product development,
demand forecasts, competitiveness, gross margins, operating expense and benefits
expected as a result of:
. The projected growth rates in the overall semiconductor industry, the
semiconductor assembly equipment market and the market for
semiconductor packaging materials and test interconnect solutions;
. The anticipated development, production and licensing of our advanced
packaging technology;
. The projected continuing demand for wire borders; and
. The anticipated growing importance of the flip chip assembly process
in high-end market segments.
Generally words such as "may," "will," "should," "could," "anticipate,"
"expect," "intend," "estimate," "plan," "continue," and "believe," or the
negative of or other variation on these and other similar expressions identify
forward-looking statements. Forward-looking statements are based on current
expectations and involve risks and uncertainties and our future results could
differ significantly from those expressed or implied by our forward-looking
statements. The uncertainties in this regard include, but are not limited to,
those identified or referred to under the caption "Risk Factors" below and in
the applicable prospectus supplement. In light of these and other uncertainties,
you should not conclude that we will necessarily achieve any plans and
objectives or projected financial results referred to in any of the
forward-looking statements. We do not undertake to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.
-14-
Use of Proceeds
Unless the applicable prospectus supplement for a particular issuance of
securities states otherwise, the net proceeds we receive from the sale of the
securities offered by this prospectus will be used for general corporate
purposes, which may include:
. funding the development and growth of our product offerings and
business;
. repaying indebtedness that we may incur from time to time;
. financing potential business acquisitions that we may consider from
time to time; and
. general working capital.
Pending these uses, we may use the net proceeds to make short-term investments
or reduce short-term borrowings.
Ratio of Earnings to Fixed Charges
Our ratio of earnings to fixed charges for each of the periods indicated is
as follows:
Nine Months
Fiscal Years Ended September 30, Ended June 30,
---------------------------------------- ----------------
1997 1998 1999 2000 2001 2001 2002
Ratio of earnings to
fixed charges 18x 2x * 16x * * *
These computations include us and our consolidated subsidiaries. These
ratios are computed by dividing (a) income (loss) before taxes plus fixed
charges and equity in loss of joint ventures by (b) fixed charges, which
includes interest expense plus the portion of rent expense under operating
leases we deem to be representative of the interest factor and amortization of
debt issue costs.
* We would have had to generate additional earnings of $16.2 million in
fiscal 1999, $78.8 million in Fiscal 2001, $44.4 million in the nine months
ended June 30, 2001 and $105.5 million in the nine months ended June 30, 2002 to
achieve a ratio of 1:1.
General Description of Securities
This prospectus, together with the additional information included in
any applicable prospectus supplements, contains a summary of the material terms
and provisions of our common stock, preferred stock, debt
-15-
securities, including senior debt securities, senior subordinated debt
securities and subordinated debt securities consisting of notes, debentures or
other evidence of indebtedness, warrants, and units consisting of two or more
classes of these securities.
The securities offered by this prospectus may be offered in amounts, at
prices and on terms to be determined at the time of the offering. The aggregate
offering price of securities offered by us under this prospectus will not exceed
$250,000,000. These summaries are not meant to be a complete description of each
security.
Description of Capital Stock
The following is a general description of our capital stock. The terms of
our articles of incorporation and bylaws are more detailed than the general
information provided below. Therefore, you should carefully consider the actual
provisions of those documents.
Authorized Capital Stock
We are authorized to issue a total of 205,000,000 shares of our capital
stock, each of which is without par value. Of the authorized amount, 200,000,000
of the shares are common stock and 5,000,000 of the shares are preferred stock.
Our Board of Directors may, without further action by our stockholders,
issue a series of preferred stock and fix the rights and preferences of those
shares, including the dividend rights, dividend rates, conversion rights,
exchange rights, voting rights, terms of redemption, redemption price or prices,
liquidation and other preferences and priorities and the number of shares
constituting any series or the designation of such series. The rights of the
holders of common stock will be subject to, and may be adversely affected by,
the rights of the holders of any preferred stock issued by us. All of the
5,000,000 authorized shares of preferred stock are currently undesignated.
As of July 31, 2002, there were 49,336,497 shares of common stock issued
and outstanding. As of such date, no shares of preferred stock were issued or
outstanding.
Common Stock
General. Each share of our common stock has the same rights and privileges.
Holders of our common stock do not have any preferences or any preemptive,
conversion or exchange rights. All of our outstanding shares of common stock are
fully paid and nonassessable. Our common stock is listed on the Nasdaq National
Market under the symbol "KLIC."
Voting Rights. The holders of our common stock are entitled to vote upon
all matters submitted to a vote of our stockholders and are entitled to one vote
for each share of common stock held. In the election of directors, the holders
of the common stock may multiply the number of votes the shareholder is entitled
to cast by the total number of directors to be elected at a meeting of
shareholders and cast the whole number of votes for one candidate or distribute
them among some or all candidates.
Dividends. Subject to the prior rights and preferences, if any, applicable
to shares of preferred stock or any series of preferred stock, or the
restrictions set forth in any applicable indentures, the holders of common stock
are entitled to participate ratably in dividends, payable in cash, stock or
otherwise, as may be declared by our Board of Directors out of any funds legally
available for the payment of dividends. Each such distribution shall be payable
to holders of record as they appear on our stock transfer books on such record
dates as shall be fixed by our Board of Directors.
- 16 -
Liquidation and Distribution. If we voluntarily or involuntarily liquidate,
dissolve or wind-up, or upon any distribution of our assets, the holders of our
common stock will be entitled to receive after distribution in full of the
preferential amounts, if any, to be distributed to the holders of preferred
stock or any series of preferred stock, all of the remaining assets available
for distribution equally and ratably in proportion to the number of shares of
common stock held by them.
Preferred Stock
General. The rights, preferences, privileges and restrictions of the
preferred stock of each series will be fixed by the certificate of designation
relating to each particular series. A prospectus supplement relating to each
such series will specify the terms of the preferred stock as determined by our
board of directors, including the following:
. the title and stated value of the preferred stock being offered;
. the number of shares of preferred stock being offered, their
liquidation preference per share, if any, and their purchase price;
. the dividend rate(s), period(s) and payment date(s) or method(s) of
calculating the payment date(s) applicable to the preferred stock
being offered;
. whether dividends shall be cumulative or non-cumulative;
. the provisions for redemption, if applicable, of the preferred stock
being offered;
. any listing of the preferred stock being offered on any securities
exchange or market;
. voting rights, if any, of the preferred stock being offered;
. the relative ranking and preference of the series as to dividend
rights and rights upon our dissolution or upon any distribution of our
assets;
. any limitations on issuance of any series of our preferred stock
ranking senior to or on parity with that particular series of our
preferred stock as to dividend rights and rights upon our dissolution
or upon any distribution of our assets; and
. any other specific terms, preferences, priorities, rights, limitations
or restrictions of the preferred stock being offered.
The description of the preferred stock set forth above and in any
description of the terms of a particular series of preferred stock in the
related prospectus supplement will not be complete. You should refer to the
applicable certificate of designation for such series of preferred stock for
complete information with respect to such preferred stock. The prospectus
supplement will also contain a description of certain United States federal
income tax consequences relating to the preferred stock.
Although it has no present intention to do so, our Board of Directors,
without stockholder approval, may issue preferred stock with voting and
conversion rights that could adversely affect the voting power of the holders of
common stock. If we issue preferred stock, it may have the effect of delaying,
deferring or preventing a change in control.
Voting Rights. Holders of preferred stock will have voting rights as
indicated in the applicable prospectus supplement.
Dividends. Holders of the preferred stock of each series will be entitled
to receive, when, as and if declared by our Board of Directors, out of our funds
legally available for payment to stockholders, dividends at such rates and on
such dates as will be set forth in the applicable prospectus supplement. Each
such distribution shall be payable to holders of record as they appear on our
stock transfer books on such record dates as shall be fixed by our Board of
Directors.
Liquidation and Distribution. If we voluntarily or involuntarily liquidate,
dissolve or wind-up, or upon any distribution of our assets, the holders of our
preferred stock will have the rights as stated in the applicable prospectus
supplement.
Redemption. The terms and conditions, if any, upon which the preferred
stock will be subject to mandatory redemption or redemption at our option,
either in whole or in part, will be described in the applicable prospectus
supplement.
- 17 -
Certain Charter and Bylaws Provisions
Some sections of our articles of incorporation and bylaws and provisions of
Pennsylvania law may discourage certain transactions involving a change in
control of the Company.
Our articles of incorporation and bylaws contain provisions that (i)
classify the board of directors into four classes, with one class being elected
each year, (ii) permit the board to issue "blank check" preferred stock without
shareholder approval, and (iii) prohibit us from engaging in certain business
combinations with a holder of 20% or more of our shares without super-majority
board or shareholder approval. Further, under the Pennsylvania Business
Corporation Law, because our bylaws provide for a classified board of directors,
shareholders may only remove directors for cause.
Kulicke and Soffa has opted out of several provisions of the Pennsylvania
Business Corporation Law that could have the effect of delaying or interfering
with a proposed change of control, but is also subject to other provisions of
that law which could have those effects. Our directors are subject to a
provision of the Pennsylvania Business Corporation Law that permits them to
consider the interests of constituencies other than the shareholders when
deciding what will be in the best interests of the Company. In addition, we are
subject to two statutory provisions that are similar to the last provision of
our articles of incorporation described above because the statutory provisions
impose certain price and other requirements, and special approvals before a
holder of 20% or more of our shares may engage in certain transactions.
Transfer Agent and Registrar
American Stock Transfer and Trust Company currently is the transfer agent
and registrar for our common stock, with offices in New York, New York. The
transfer agent and registrar for any shares of preferred stock we issue will be
set forth in the applicable prospectus supplement.
Description of Debt Securities
The following is a general description of the debt securities which we may
issue from time to time. The particular terms relating to each debt security
will be set forth in a prospectus supplement.
The debt securities will be our direct obligations. The senior debt
securities will rank equally with all of our other senior and unsubordinated
debt. The senior subordinated debt securities will have a junior position to all
of our senior debt. The subordinated debt securities will have a junior position
to all of our senior debt and all of our senior subordinated debt. The senior
debt securities will be issued under a senior debt indenture, the senior
subordinated debt securities will be issued under a senior subordinated debt
indenture, and the subordinated debt securities will be issued under a
subordinated debt indenture. The indentures will be qualified under the Trust
Indenture Act of 1939. The indentures will be qualified under the Trust
Indenture Act of 1939.
Each series of the debt securities will be issued under one of three
indentures between Kulicke and Soffa and LaSalle Bank National Association, as
trustee.
We have summarized below the material provisions of the indentures. The
summary is not complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the forms of indentures, which are
filed as exhibits to the registration statement. You should read the indentures
for provisions that may be important to you.
Terms Applicable to All Debt Securities
No Limit on Debt Amounts. The indentures do not limit the amount of debt
which can be issued under the indentures. These amounts are set from time to
time by our board of directors.
Prospectus Supplements. The applicable prospectus supplement will summarize
the specific terms for the debt securities and the related offering including,
with respect to each series of debt securities, some or all of the following:
. title and form of the securities;
. offering price;
. any limit on the amount that may be issued.
- 18 -
. maturity date(s);
. interest rate or the method of computing the interest rate;
. dates on which interest will accrue, or how the dates will be
determined, the interest payment dates and any related record
dates;
. the place or places where debt securities may be surrendered for
registration of transfer or for exchange, where notices and
demands to or upon K&S in respect of the debt securities and the
indentures may be served and where notices to holders will be
published;
. terms and conditions on which the debt securities may be redeemed,
in whole or in part, at our option;
. date(s), if any, on which, and the price(s) at which we are
obligated to redeem, or at the holder's option to purchase, in
whole or in part, the debt securities and related terms and
provisions;
. details of any required sinking fund payments;
. the currency or currencies in which the debt securities will be
denominated or payable, if other than U.S. dollars;
. any index, formula or other method by which payments on the debt
securities will be determined, and any special voting or
defeasance provisions in connection with a determination, if the
amount of payments are to be determined with reference to an
index, formula or other method;
. the persons to whom payments of interest will be made;
. any provisions granting special rights to holders when a specified
event occurs;
. any changes to or additional events of default or covenants;
. any special tax implications of the debt securities; including
under what circumstances, if any, and with what procedures and
documentation K&S will pay additional amounts on the debt
securities held by a non-U.S. person in respect of taxes,
assessments or similar charges withheld or deducted and, if
so, the terms related to any option K&S will have to redeem
those debt securities rather than pay those additional
amounts;
. whether or not the debt securities will be issued in global form
and who the depository will be;
. any restrictions on the registration, transfer or exchange of the
debt securities;
. terms, if any, on which a series of debt securities may be
convertible into or exchangeable for our common stock, preferred
stock or other debt securities, including provisions as to whether
conversion or exchange is mandatory, at the option of the holder
or at our option;
. if the debt securities are convertible or exchangeable, the events
or circumstances which will result in adjustments to the
conversion or exchange price and the formulae for determining the
adjusted price;
. whether the debt securities are secured or unsecured, and if
secured, the amount and form of the security and related terms;
. subordination terms of any senior subordinated debt securities and
subordinated debt securities; and
. any other terms that are not inconsistent with the indenture
applicable to a series of debt securities, including any terms
which may be required by or advisable under United States laws
or regulations or advisable (as determined by us) in connection
with the marketing of that series of debt securities.
Unless otherwise provided in an applicable indenture relating to debt
securities, the debt securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any transfer or exchange of the debt securities,
but we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with a transfer or exchange, other
than exchanges not involving any transfer, like the issuance of definitive
securities in replacement of temporary securities or the issuance of new
securities upon surrender of a security that is redeemed or purchased in part.
A series of debt securities may be issued under the relevant indenture
as original issue discount securities, which are securities that are offered and
sold at a substantial discount from their stated principal amount. In addition,
debt securities offered and sold at their stated principal amount may under some
circumstances, pursuant to
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applicable Treasury Regulations, be treated as issued at an original issue
discount for federal income tax purposes. Federal income tax consequences and
other special considerations applicable to any such original issue discount
securities (or other debt securities treated as issued at an original issue
discount) will be described in the prospectus supplement relating to those
securities.
Covenants. We will agree in the indentures to:
. pay the principal, interest and any premium on the debt securities when
due;
. maintain an office or agency in New York City, where debt securities may
be surrendered for registration of transfer or for exchange and where
notices and demands to or upon us in respect of the debt securities and
the relevant indenture(s) may be served;
. prepare and file or deliver certain reports, as more fully specified in
the relevant indenture, with the trustee under the relevant indenture,
the SEC, and/or registered holders of debt securities, as the case may
be;
. deliver to the trustee under the relevant indenture, as more fully
specified in that indenture, officers' certificates relating to our
compliance under the relevant indenture and the occurrence of any
default or event of default under that indenture;
. file with the trustee under the relevant indenture and the SEC, in
accordance with, and as may be required by, the rules and regulations
prescribed from time to time by the SEC, the additional information,
documents and reports with respect to compliance by the Company with
the conditions and covenants provided for in the relevant indenture;
. unless our board of directors determines that it is no longer desirable
in the conduct of our business and our significant subsidiaries, taken
as a whole, and that there will be no adverse impact in any material
respect to the holders of debt securities, subject to those exceptions
as more fully specified in the relevant indenture, do or cause to be
done all things necessary to preserve and keep in full force and
effect:
. our corporate existence, and the corporate, partnership or other
existence of each of our significant subsidiaries, in accordance with
their respective organizational documents;
. the rights, licenses and franchises of us and certain of our
subsidiaries; and
. not at any time seek application of any applicable stay, extension or
usury law that may affect the covenants or the performance under the
indentures.
Consolidation, Merger and Sale of Assets. We will not consolidate with or
merge into any other corporation or transfer all or substantially all of our
assets unless:
. we are the surviving corporation or the successor or surviving entity is
organized or existing under the laws of the United States of America,
any state thereof or the District of Columbia;
. the successor or surviving entity assumes all of our obligations under
the debt securities and the indentures pursuant to supplemental
indentures in forms reasonably satisfactory to the trustee(s) under the
relevant indentures; and
. immediately after we consolidate or merge, no event of default and no
event which, after notice or lapse of time, or both, would become an
event of default, will have happened and be continuing.
Upon any consolidation, merger or transfer, the successor will be
substituted for us under the indenture and we will be relieved of all
obligations and covenants under the indenture and the debt securities, but we
will not be relieved of the obligation to pay the principal of and interest on
the debt securities, except in the case of a sale of all of our assets that
meets the requirements stated in the immediately preceding paragraph.
Satisfaction and Discharge. Upon our request, the relevant indenture will
no longer be effective with respect to any series for almost all purposes if
either:
. all outstanding securities of that series have been delivered to the
trustee for cancellation and we have paid all sums payable in respect of
that series; or
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. the only securities which are still outstanding have, or within one year
will, become due and payable or are to be called for redemption, we have
deposited with the trustee funds which are sufficient to make all
future payments, no default or event of default will have occurred and
be continuing on the date of that deposit and that deposit will not
result in a breach of any other instrument by which we are bound, we
have paid all other sums payable in respect of that series, and we
have delivered to the trustee a certificate and opinion of counsel
that all conditions precedent to satisfaction and discharge have been
fulfilled.
Legal Defeasance and Covenant Defeasance. Under each indenture, we may
elect with respect to a series of debt securities at our option and subject to
the satisfaction of the conditions described below, either:
. to be deemed to have paid and discharged the entire indebtedness
represented by the outstanding debt securities of the applicable
series and to have satisfied all of our other obligations under the
debt securities of the applicable series and under the provisions of
the relevant indenture, which we refer to as legal defeasance; or
. to be released from some of our obligations under the relevant
indenture, which we refer to as covenant defeasance.
We can exercise legal or covenant defeasance if we put in place the
following arrangements:
. we must irrevocably deposit with the applicable indenture trustee (or
another trustee meeting certain eligibility requirements and agreeing
to be bound by the applicable provisions of the relevant indenture),
in trust, for the benefit of the holders of the applicable series of
debt securities:
. cash in United States dollars,
. non-callable and non-redeemable direct obligations of the United
States of America or of an agency or instrumentality controlled or
supervised by the United States of America, in each instance, the
payment of which is unconditionally guaranteed as a full faith and
credit obligation of the United States of America; or
. a combination of the foregoing,
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, interest and premium, if any, on the
outstanding debt securities of the applicable series on their stated maturity or
applicable redemption date, as the case may be, and any mandatory sinking fund
payments applicable to that particular series of the debt securities on the day
on which the payments are due;
. we must deliver to the trustee an opinion of counsel confirming that the
holders of the outstanding securities of the applicable series will not
recognize income, gain or loss for federal income tax purposes as a
result of the defeasance;
. no default or event of default shall have occurred and be continuing on
the date of the deposit of the amounts to be held in trust for the
benefit of the holders (other than a default or event of default
resulting from the borrowing of funds to be applied to the deposit) or
in the case of any insolvency-related defaults, at any time in the
period ending on the 91st day after the date of the deposit (or
greater period of time in which any such deposit of trust funds may
remain subject to bankruptcy or insolvency laws which apply to the
deposit by us); and
. we must deliver to the trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent provided for or
relating to legal defeasance or covenant defeasance, as the case may
be, have been complied with.
After satisfying the conditions for legal defeasance, the applicable debt
securities will be deemed outstanding only for limited purposes as more fully
set forth in the relevant indenture. After legal defeasance, the holders of
outstanding debt securities will have to rely solely on the deposits we make to
the trust for repayment on the debt securities.
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After satisfying the conditions for covenant defeasance, the debt
securities of the applicable series will be deemed not outstanding for the
purposes of the covenants from which we have been released, but will continue to
be deemed outstanding for all other purposes under the relevant indenture.
The applicable prospectus supplement may further describe additional
provisions, if any, permitting legal defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect to
the debt securities of or within a particular series.
Information Concerning the Trustee. The prospectus supplement with respect
to particular debt securities will describe any relationship that we may have
with the trustee for the debt securities offered. We may also maintain bank
accounts, borrow money and have other customary banking or investment banking
relationships with the trustee, or its affiliates, in the ordinary course of
business.
Form, Exchange, Transfer. Unless otherwise specified in the prospectus
supplement, debt securities will be issued in registered form without coupons.
They may also be issued in global form with accompanying book-entry procedures
as outlined below.
A holder of debt securities of any series can exchange the debt securities
for other debt securities of the same series, in any authorized denomination and
with the same terms and aggregate principal amount. They are transferable at the
corporate trust office of the trustee or at any transfer agent designated by us
for that purpose. No charge will be made for any such exchange or transfer
except for any tax or governmental charge related to such exchange or transfer,
other than exchanges not involving any transfer such as the issuance of
definitive securities in replacement of temporary securities or the issuance of
new securities upon surrender of a security that is redeemed or purchased in
part.
Global Securities. The registered debt securities may be issued in the form
of one or more fully registered global securities that will be deposited with
and registered in the name of a depositary or with a nominee for a depositary
identified in the prospectus supplement.
The specific terms of the depositary arrangement with respect to any debt
securities to be represented by a registered global security will be described
in the prospectus supplement.
Ownership of beneficial interests in a registered global security will be
limited to persons that have accounts with the depositary for such registered
global security ("participants") or persons that may hold interests through
participants. Upon the issuance of a registered global security, the depositary
will credit, on its book-entry registration and transfer system, the
participants' accounts with the principal amounts of the debt securities
represented by the registered global security beneficially owned by such
participants. Ownership of beneficial interests in such registered global
security will be shown on, and the transfer of such ownership interests will be
effected, only through records maintained by the depositary for such registered
global security or on the records of participants for interests of persons
holding through participants.
So long as the depositary for a registered global security, or its nominee,
is the registered owner of a registered global security, the depositary or the
nominee will be considered the sole owner or holder of the debt securities
represented by the registered global security for all purposes. Except as set
forth below, owners of beneficial interests in a registered global security will
not:
. be entitled to have the debt securities represented by such registered
global security registered in their names;
. receive or be entitled to receive physical delivery of such debt
securities in definitive forms; and
. be considered the owners or holders of the debt securities.
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Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for such
registered global security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the applicable indenture. We understand
that under existing industry practices, if we request any action of holders, or
if an owner of a beneficial interest in a registered global security desires to
take any action which a holder is entitled to take under the applicable
indenture, the depositary would authorize the participants holding the relevant
beneficial interests to take such action, and such participants would authorize
beneficial owners owning through such participants to take such action.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to such depositary or its nominee, as the
case may be, as the registered owner of such registered global security. Neither
K&S nor the trustee will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in such registered global security.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payment of principal, premium or
interest will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such registered global
security as shown on the records of such depositary. We also expect that
payments by participants to owners of beneficial interests in such a registered
global security held by the participants will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
We may at any time determine not to have any of the debt securities of a
series represented by one or more registered global securities and, in such
event, will issue debt securities of such series in definitive form in exchange
for all of the registered global security or securities representing such debt
securities. Any debt securities issued in definitive form in exchange for a
registered global security will be registered in such name or names as the
depositary shall instruct the relevant trustee. We expect that such instructions
will be based upon directions received by the depositary from participants with
respect to ownership of beneficial interests in such registered global security.
If provided in a prospectus supplement relating to a series of debt
securities, the debt securities of that series may also be issued in the form of
one or more global securities that will be deposited with a common depositary
identified in the prospectus supplement. The specific terms and procedures,
including the specific terms of the depositary arrangement, with respect to any
portion of a series of debt securities to be represented by a global security
will be described in the prospectus supplement.
Particular Terms of the Senior Debt Securities
Ranking of Senior Debt Securities. The senior debt securities will
constitute part of our senior debt and rank equally with all our other senior
and unsecured debt, except that it will be senior to our senior subordinated
debt and subordinated debt.
Events of Default. The following are events of default under a series of
senior debt securities:
. we fail to pay the principal, any premium, if any, or any sinking fund
payment, on any senior debt securities of that series when due;
. we fail to pay interest on any senior debt securities of that series
within 30 days following the due date;
. we fail to observe or perform any other covenant, representation,
warranty or other agreement in the senior indenture applicable to that
series and that failure continues for 60 days after we receive notice to
comply from the trustee or holders of at least 25% in aggregate
principal amount of the
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outstanding senior debt securities of all series affected by that
failure, treating all those series as a single class;
. certain events of bankruptcy or insolvency occur, whether voluntary or
not.
The prospectus supplement for a particular series may describe additional
or different events of default that apply to that series. An event of default
with respect to one series of senior debt securities does not necessarily
constitute an event of default with respect to any other series of senior debt
securities.
If a default or an event of default occurs and is continuing, and if a
responsible officer of the trustee under the indenture has actual knowledge
thereof, the trustee will mail to the holders of senior debt securities of the
affected series a notice to that effect within 90 days after it occurs. Except
in the case of a default in the payment of principal or interest, the trustee
under the senior indenture may withhold notice if and so long as a committee of
the trustee's responsible officers in good faith determines that withholding the
notice is in the interests of the holders.
If an event of default with respect to one or more series of senior debt
securities occurs and is continuing, the trustee or the holders of at least 25%
in aggregate principal amount of the then outstanding senior debt securities of
all series with respect to which the event of default occurs and is continuing,
treating all those series as a single class, may declare the principal of,
premium, if any, and accrued and unpaid interest of all the senior debt
securities of those series to be immediately due and payable. The holders of a
majority in aggregate principal amount of the then outstanding senior debt
securities of all series covered by such declaration may annul or rescind the
declaration.
The senior indenture entitles the trustee to be indemnified by the holders
before proceeding to exercise any right or power at the request of any of the
holders.
The holders of a majority in principal amount of the outstanding senior
debt securities of all series with respect to which an event of default occurs
and is continuing, treating all those series as a single class, may direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee or exercising any trust power conferred on it, except that:
. the direction cannot conflict with any rule or the indenture;
. the trustee may take any other action deemed proper by the trustee which
is not inconsistent with the direction; and
. the trustee need not take any action which might involve it in personal
liability or be unduly prejudicial to the holders of the senior debt
securities not joining in the action.
A holder may pursue a remedy directly under the indenture or the series of
senior debt securities, but before doing so, the following must occur:
. the holder must give to the trustee written notice that an event of
default has occurred and is continuing;
. the holders of at least 25% in principal amount of the then outstanding
senior debt securities of all affected series, treating all those series
as a single class, must make a written request to the trustee to pursue
the remedy;
. the holder, or holders, must offer and, if requested, provide to the
trustee an indemnity satisfactory to the trustee against any loss,
liability or expense from the taking of the action;
. the trustee does not comply with the request within 60 days after
receipt of the request and offer of indemnity; and
. during the 60 day period, the holders of a majority in principal amount
of the then outstanding senior debt securities of all those series,
treating all those series as a single class, do not give the trustee a
direction inconsistent with the written request.
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However, holders have an absolute right to receipt of principal, premium,
if any, and interest on or after the respective due dates and to institute suit
for the enforcement of those payments. The right of a holder of senior debt
securities to bring suit for the enforcement of any payments of principal,
premium, if any, and interest on senior debt securities on or after the
respective due dates may not be impaired or affected without the consent of that
holder.
The holders of a majority in principal amount of the senior debt securities
then outstanding of all affected series, treating all such series as a single
class, may by notice to the trustee on behalf of all holders of the senior debt
securities of such series waive any past defaults, except:
. a continuing default in payment of the principal of, premium, if any, or
interest on, or any sinking fund payment on, senior debt securities of
the series; and
. a continuing default in respect of a covenant or provision of the
indenture which cannot be amended or modified without the consent of
each holder of senior debt securities affected.
We will periodically file statements with the trustees regarding our
compliance with covenants in the senior indenture.
Modifications and Amendments. Except as provided below, or more fully
specified in the senior indenture, the senior indenture may be amended or
supplemented by us and the trustee with the consent of holders of a majority in
principal amount of all series of senior debt securities affected by the
amendment or supplement, treating all such series as a single class. In
addition, the record holders of a majority in principal amount of the
outstanding senior debt securities of all series affected by the waiver,
treating all such series as a single class, may, with respect to those series,
waive defaults under, or compliance with, the provisions of the senior
indenture. However, some amendments or waivers require the consent of each
holder of any senior debt security affected. Without the consent of each holder,
an amendment or waiver may not:
. reduce the principal amount of the senior debt securities of any series
whose holders must consent to an amendment, supplement or waiver;
. reduce the principal or change the fixed maturity of the principal of,
premium, if any, or mandatory sinking fund obligation, if any, of any
senior debt securities of any series or alter the provisions with
respect to the redemption of the senior debt securities;
. reduce the rate, or change the time for payment, of interest, including
default interest, on any senior debt security of any series;
. waive a default or event of default in the payment of principal of, or
interest or premium on, the senior debt securities of any series,
except a rescission of acceleration of the senior debt securities by
the holders of a majority in aggregate principal amount of the senior
debt securities of any series and a waiver of the payment default that
resulted from that acceleration;
. make any senior debt security of any series payable in currency other
than that stated in the senior debt securities of that series;
. make any change in the provisions of the senior indenture relating to
waivers of past defaults or the rights of the holders of senior debt
securities to receive payments of principal of or interest or premium
on the senior debt securities;
. waive a redemption payment with respect to any senior debt security;
. make any change in the right of any holders of senior debt securities
regarding waivers of defaults or impair or affect the right of any
holder of a senior debt security of any series to receive payment of
principal, premium, if any, and interest on that security on or after
the due date expressed in that security or to bring suit for the
enforcement of any payment on or after the due date; or
. make any change in the above amendment and waiver provisions.
We and the trustee under the senior indenture may amend or supplement the
senior indenture or the senior debt securities issued thereunder without the
consent of any holder:
. to evidence the succession of another person to us, or successive
successions, and the assumption by the successors of our covenants,
agreements and obligations under the indenture;
- 25 -
. to add other covenants, restrictions or conditions for the protection of
the holders of all or any series of senior debt securities;
. to add events of default;
. to provide for the issuance of senior debt securities in coupon form and
to provide for exchangeability of those senior debt securities under the
indenture in fully registered form;
. to provide for the issuance of and to establish the form, terms and
conditions of senior debt securities of any series;
. to evidence and provide for the acceptance of appointment by a successor
trustee and to add or change any of the provisions of the indenture
necessary to provide for or facilitate the administration of the trusts
under the indenture by more than one trustee;
. to cure any ambiguity, or to correct or supplement any provision in the
indenture which may be defective or inconsistent with any other
provision contained in the indenture or in any supplemental indenture,
or to make any other provisions with respect to matters or questions
arising under that indenture, so long as the interests of holders of
senior debt securities of any series are not adversely affected in any
material respect under that indenture; or
. to make any change that does not adversely affect the rights of any
holder.
Particular Terms of the Senior Subordinated Debt Securities
Ranking of Senior Subordinated Debt Securities. The senior subordinated
debt securities will rank senior to any subordinated debt securities and will be
subordinated and junior in right of payment to any senior debt securities and
certain other indebtedness of Kulicke & Soffa to the extent set forth in the
applicable indenture. All series of the senior subordinated debt securities will
rank equally with each other.
Subordination. Unless the prospectus supplement indicates otherwise, the
following provisions will apply to the senior subordinated debt securities. Our
obligations under the senior subordinated debt securities will be subordinated
in right of payment to our obligations under our senior debt. For this purpose,
"senior debt" generally includes any indebtedness that does not expressly
provide that it is on a parity with or subordinated in right of payment to the
senior subordinated debt securities. Specifically, senior debt includes
obligations under any credit facility with banks or other institutional lenders
and obligations under the senior debt securities described in this prospectus.
Senior debt will not include:
. any liability for federal, state, local or other taxes;
. any indebtedness to any of our subsidiaries or other affiliates;
. any trade payables;
. any indebtedness that we may is incur in violation of the senior
subordinated indenture; or
. obligations under the subordinated debt securities.
If we distribute our assets to creditors upon any dissolution, winding-up,
liquidation or reorganization or in bankruptcy, insolvency, receivership or
similar proceedings, we must first pay all amounts due or to become due on all
senior debt before we pay the principal of, or any premium or interest on, the
senior subordinated debt securities.
We may not make any payment on the senior subordinated debt securities if a
default in the payment of the principal, premium, if any, interest or other
obligations, including a default under any repurchase or redemption obligation
in respect of designated senior debt, occurs and continues beyond any applicable
grace period. We may not make any payment on the senior subordinated debt
securities if any other default occurs and continues with respect to designated
senior debt that permits holders of the designated senior debt to accelerate its
maturity and the trustee receives a notice of default from us, a holder of
designated senior debt or other person permitted to give notice. We may not
resume payments on the senior subordinated debt securities until the defaults
are cured or specified time periods pass, unless the maturity of the senior debt
is actually accelerated.
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The term "designated senior debt" means our obligations under any
particular senior debt if the amount of that senior debt is at least the amount
specified in the applicable prospectus supplement and the debt instrument
expressly provides that the senior debt will be designated senior debt with
respect to the senior subordinated debt securities.
We expect that the terms of some of our senior debt will provide that an
event of default under the senior subordinated debt securities or an
acceleration of their maturity will constitute an event of default under the
senior debt. In that case, if the maturity of the senior subordinated debt
securities is accelerated because of an event of default, we may not make any
payment on the senior subordinated debt securities until we have paid all senior
debt or the acceleration has been rescinded. If the payment of the senior
subordinated debt securities is accelerated because of an event of default, we
must promptly notify the holders of senior debt of the acceleration.
If we experience a bankruptcy, dissolution or reorganization, holders of
senior debt may receive more, ratably, and holders of the senior subordinated
debt securities may receive less, ratably, than our other creditors.
The indenture for senior subordinated debt securities may not limit our
ability to incur additional senior debt.
The subordination provisions may not be amended in a manner adverse to the
holders of the senior subordinated debt securities without the consent of the
holders of at least 75% of the aggregate principal amount of senior subordinated
debt securities then outstanding affected by the amendment, voting as a single
class.
Events of Default. The following are events of default under a series of
senior subordinated debt securities:
. we fail to pay the principal, any premium, if any, or any sinking fund
payment, on any senior subordinated debt securities of that series when
due;
. we fail to pay interest on any senior subordinated debt securities of
that series within 30 days following the due date;
. we fail to observe or perform any other covenant, representation,
warranty or other agreement in the senior subordinated indenture
applicable to that series and that failure continues for 60 days after
we receive notice to comply from the trustee or holders of at least 25%
in aggregate principal amount of the outstanding senior subordinated
debt securities of all series affected by that failure, treating all
those series as a single class;
. certain events of bankruptcy or insolvency occur, whether voluntary or
not.
The prospectus supplement for a particular series may describe additional
or different events of default that apply to that series. An event of default
with respect to one series of senior subordinated debt securities does not
necessarily constitute an event of default with respect to any other series of
senior subordinated debt securities.
If a default or an event of default occurs and is continuing, and if a
responsible officer of the trustee under the indenture has actual knowledge
thereof, the trustee will mail to the holders of senior subordinated debt
securities of the affected series a notice to that effect within 90 days after
it occurs. Except in the case of a default in the payment of principal or
interest, the trustee under the senior subordinated indenture may withhold
notice if and so long as a committee of the trustee's responsible officers in
good faith determines that withholding the notice is in the interests of the
holders.
If an event of default with respect to one or more series of senior
subordinated debt securities occurs and is continuing, the trustee or the
holders of at least 25% in aggregate principal amount of the then outstanding
senior subordinated debt securities of all series with respect to which the
event of default occurs and is continuing, treating all those series as a single
class, may declare the principal of, premium, if any, and accrued and unpaid
interest
- 27 -
(subject to applicable subordination provisions in the senior subordinated
indenture) of all the senior subordinated debt securities of those series to be
immediately due and payable. The holders of a majority in aggregate principal
amount of the then outstanding senior subordinated debt securities of all series
covered by such declaration may annul and rescind the declaration.
The senior subordinated indenture entitles the trustee to be indemnified by
the holders before proceeding to exercise any right or power at the request of
any of the holders.
The holders of a majority in principal amount of the outstanding senior
subordinated debt securities of all series with respect to which an event of
default occurs and is continuing, treating all those series as a single class,
may direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust power conferred on it,
except that:
. the direction cannot conflict with any rule or the indenture;
. the trustee may take any other action deemed proper by the trustee which
is not inconsistent with the direction; and
. the trustee need not take any action which might involve it in personal
liability or be unduly prejudicial to the holders of the senior
subordinated debt securities not joining in the action.
A holder may pursue a remedy directly under the senior subordinated
indenture or the series of senior subordinated debt securities, but before doing
so, the following must occur:
. the holder must give to the trustee written notice that an event of
default has occurred and is continuing;
. the holders of at least 25% in principal amount of the then outstanding
senior subordinated debt securities of all affected series, treating all
those series as a single class, must make a written request to the
trustee to pursue the remedy;
. the holder, or holders, must offer and, if requested, provide to the
trustee an indemnity satisfactory to the trustee against any loss,
liability or expense from the taking of the action;
. the trustee does not comply with the request within 60 days after
receipt of the request and offer of indemnity; and
. during the 60 day period, the holders of a majority in principal amount
of the then outstanding senior subordinated debt securities of all those
series, treating all those series as a single class, do not give the
trustee a direction inconsistent with the written request.
However, holders have an absolute right to receipt of principal, premium,
if any, and interest on or after the respective due dates and to institute suit
for the enforcement of those payments. The right of a holder of senior
subordinated debt securities to bring suit for the enforcement of any payments
of principal, premium, if any, and interest on senior subordinated debt
securities on or after the respective due dates may not be impaired or affected
without the consent of that holder.
The holders of a majority in principal amount of the senior subordinated
debt securities then outstanding of all affected series, treating all such
series as a single class, may by notice to the trustee on behalf of all holders
of the senior subordinated debt securities of such series waive any past
defaults, except:
. a continuing default in payment of the principal of, premium, if any, or
interest on, or any sinking fund payment on, senior subordinated debt
securities of the series; and
. a continuing default in respect of a covenant or provision of the
indenture which cannot be amended or modified without the consent of
each holder of senior subordinated debt securities affected.
We will periodically file statements with the trustees regarding our
compliance with covenants in the senior subordinated indenture.
- 28 -
Modifications and Amendments. Except as provided below, or more fully
specified in the senior subordinated indenture, the senior subordinated
indenture may be amended or supplemented by us and the trustee with the consent
of holders of a majority in principal amount of all series of senior
subordinated debt securities affected by the amendment or supplement, treating
all such series as a single class. In addition, the record holders of a majority
in principal amount of the outstanding senior subordinated debt securities of
all series affected by the waiver, treating all such series as a single class,
may, with respect to those series, waive defaults under, or compliance with, the
provisions of the senior subordinated indenture. However, some amendments or
waivers require the consent of each holder of any senior subordinated debt
security affected. Without the consent of each holder, an amendment or waiver
may not:
. reduce the principal amount of the senior subordinated debt securities
of any series whose holders must consent to an amendment, supplement or
waiver;
. reduce the principal or change the fixed maturity of the principal of,
premium, if any, or mandatory sinking fund obligation, if any, of any
senior subordinated debt securities of any series or alter the
provisions with respect to the redemption of the senior subordinated
debt securities;
. reduce the rate, or change the time for payment, of interest, including
default interest, on any senior subordinated debt security of any
series;
. waive a default or event of default in the payment of principal of, or
interest or premium on, the senior subordinated debt securities of any
series, except a rescission of acceleration of the senior subordinated
debt securities by the holders of a majority in aggregate principal
amount of the senior subordinated debt securities of any series and a
waiver of the payment default that resulted from that acceleration;
. make any senior subordinated debt security of any series payable in
currency other than that stated in the senior subordinated debt
securities of that series;
. make any change in the provisions of the senior subordinated indenture
relating to waivers of past defaults or the rights of the holders of
senior subordinated debt securities to receive payments of principal of
or interest or premium on the senior subordinated debt securities;
. waive a redemption payment with respect to any senior subordinated debt
security;
. make any change in the right of any holders of senior subordinated
debt securities regarding waivers of defaults or impair or affect the
right of any holder of a senior subordinated debt security of any
series to receive payment of principal, premium, if any, and interest
on that security on or after the due date expressed in that security
or to bring suit for the enforcement of any payment on or after the
due date; or
. make any change in the above amendment and waiver provisions.
We and the trustee under the senior subordinated indenture may amend or
supplement the senior subordinated indenture or the senior subordinated debt
securities issued thereunder without the consent of any holder:
. to evidence the succession of another person to us, or successive
successions, and the assumption by the successors of our covenants,
agreements and obligations under the senior subordinated indenture;
. to add other covenants, restrictions or conditions for the protection of
the holders of all or any series of senior subordinated debt securities;
. to add events of default;
. to provide for the issuance of senior subordinated debt securities in
coupon form and to provide for exchangeability of those senior
subordinated debt securities under the indenture in fully registered
form;
. to provide for the issuance of and to establish the form, terms and
conditions of senior subordinated debt securities of any series;
. to evidence and provide for the acceptance of appointment by a
successor trustee and to add or change any of the provisions of the
indenture necessary to provide for or facilitate the administration of
the trusts under the indenture by more than one trustee;
- 29 -
. to cure any ambiguity, or to correct or supplement any provision in
the indenture which may be defective or inconsistent with any other
provision contained in the indenture or in any supplemental indenture,
or to make any other provisions with respect to matters or questions
arising under that indenture, so long as the interests of holders of
senior subordinated debt securities of any series are not adversely
affected in any material respect under that indenture; or
. to make any change that does not adversely affect the rights of any
holder.
Particular Terms of the Subordinated Debt Securities
Ranking of Subordinated Debt Securities. The subordinated debt securities
will be subordinated and junior in right of payment to any senior debt
securities and senior subordinated debt securities and certain other
indebtedness of Kulicke & Soffa to the extent set forth in the prospectus
supplement.
Subordination. Unless the prospectus supplement indicates otherwise, the
subordination provisions of the subordinated debt securities will be the same as
those of the senior subordinated debt securities just described, with the
following exceptions:
. "Senior debt" will include our obligations under the senior
subordinated debt securities, as well as under the other debt
specified above; and
. Different series of subordinated debt securities may rank senior to
other series. In that case, our obligations under the higher-ranking
series will be "senior debt" in relation to the lower-ranking series.
Events of Default. The following are events of default under a series of
subordinated debt securities:
. we fail to pay the principal, any premium, if any, or any sinking fund
payment, on any subordinated debt securities of that series when due;
. we fail to pay interest on any debt securities of that series within
30 days following the due date;
. we fail to observe or perform any other covenant, representation,
warranty or other agreement in the subordinated indenture applicable
to that series and that failure continues for 60 days after we receive
notice to comply from the trustee or holders of at least 25% in
aggregate principal amount of the outstanding subordinated debt
securities of that series and all other series that rank equal with
that series and with respect to which that default has occurred,
treating all those series as a single class;
. certain events of bankruptcy or insolvency occur, whether voluntary or
not.
The prospectus supplement for a particular series may describe additional
or different events of default that apply to that series. An event of default
with respect to one series of subordinated debt securities does not necessarily
constitute an event of default with respect to any other series of subordinated
debt securities.
If a default or an event of default occurs and is continuing, and if a
responsible officer of the trustee under the indenture has actual knowledge
thereof, the trustee will mail to the holders of subordinated debt securities of
the affected series a notice to that effect within 90 days after it occurs.
Except in the case of a default in the payment of principal or interest, the
trustee under the subordinated indenture may withhold notice if and so long as a
committee of the trustee's responsible officers in good faith determines that
withholding the notice is in the interests of the holders.
If an event of default with respect to any series of subordinated debt
securities occurs and is continuing, the trustee or the holders of at least 25%
in aggregate principal amount of the then outstanding subordinated debt
securities of that series and all other series that rank equal with that series
and with respect to which the event of default occurs and is continuing,
treating all those series as a single class, may declare the principal of,
premium, if any, and accrued and unpaid interest (subject to applicable
subordination provisions in the relevant indenture) of all
- 30 -
the subordinated debt securities of those series to be immediately due and
payable. The holders of a majority in aggregate principal amount of the then
outstanding subordinated debt securities of all series covered by such
declaration may annul and rescind the declaration.
The subordinated indenture entitles the trustee to be indemnified by the
holders before proceeding to exercise any right or power at the request of any
of the holders.
The holders of a majority in principal amount of the outstanding
subordinated debt securities of all series with respect to which an event of
default occurs and is continuing and that rank equal with each other, treating
all those series as a single class, may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust power conferred on it with respect to those series, except that:
. the direction cannot conflict with any rule or the subordinated
indenture;
. the trustee may take any other action deemed proper by the trustee
which is not inconsistent with the direction; and
. the trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the holders of the
subordinated debt securities not joining in the action.
A holder may pursue a remedy directly under the indenture or the series of
subordinated debt securities, but before doing so, the following must occur:
. the holder must give to the trustee written notice that an event of
default has occurred and is continuing;
. the holders of at least 25% in principal amount of the then
outstanding subordinated debt securities of all affected series that
rank equal with each other, treating all those securities as a single
class, must make a written request to the trustee to pursue the
remedy;
. the holder, or holders, must offer and, if requested, provide to the
trustee an indemnity satisfactory to the trustee against any loss,
liability or expense from the taking of the action;
. the trustee does not comply with the request within 60 days after
receipt of the request and offer of indemnity; and
. during the 60 day period, the holders of a majority in principal
amount of the then outstanding subordinated debt securities of all
those series, treating all those securities as a single class, do not
give the trustee a direction inconsistent with the written request.
However, holders have an absolute right to receipt of principal, premium,
if any, and interest on or after the respective due dates and to institute suit
for the enforcement of those payments. The right of a holder of subordinated
debt securities to bring suit for the enforcement of any payments of principal,
premium, if any, and interest on subordinated debt securities on or after the
respective due dates may not be impaired or affected without the consent of that
holder.
The holders of a majority in principal amount of the subordinated debt
securities then outstanding of all affected series that rank equal with each
other, treating all such series as a single class, may by notice to the trustee
on behalf of all holders of the subordinated debt securities of such series
waive any past defaults, except:
. a continuing default in payment of the principal of, premium, if any,
or interest on, or any sinking fund payment on, subordinated debt
securities of the series; and
. a continuing default in respect of a covenant or provision of the
indenture which cannot be amended or modified without the consent of
each holder of each debt securities affected.
We will periodically file statements with the trustee regarding our
compliance with covenants in the subordinated indenture.
- 31 -
Modifications and Amendments. Except as provided below, or more fully
specified in the subordinated indenture, the subordinated indenture may be
amended or supplemented by us and the trustee with the consent of holders of a
majority in principal amount of each series of debt securities affected by the
amendment or supplement, that rank equal with each other, treating all such
series as a single class. In addition, the record holders of a majority in
principal amount of the outstanding subordinated debt securities of all series
affected by the waiver that rank equal with each other, treating all such series
as a single class, may, with respect to those series, waive defaults under, or
compliance with, the provisions of the subordinated indenture. However, some
amendments or waivers require the consent of each holder of any debt security
affected. Without the consent of each holder, an amendment or waiver may not:
. reduce the principal amount of the subordinated debt securities of any
series whose holders must consent to an amendment, supplement or
waiver;
. reduce the principal or change the fixed maturity of the principal of,
premium, if any, or mandatory sinking fund obligation if any, of any
subordinated debt securities of any series or alter the provisions
with respect to the redemption of the subordinated debt securities;
. reduce the rate, or change the time for payment, of interest,
including default interest, on any subordinated debt security of any
series;
. waive a default or event of default in the payment of principal of, or
interest or premium on, the subordinated debt securities of any
series, except a rescission of acceleration of the subordinated debt
securities by the holders of a majority in aggregate principal amount
of the subordinated debt securities of any series and a waiver of the
payment default that resulted from that acceleration;
. make any subordinated debt security of any series payable in currency
other than that stated in the debt securities of that series;
. make any change in the provisions of the subordinated indenture
relating to waivers of past defaults or the rights of the holders of
subordinated debt securities to receive payments of principal of or
interest or premium on the subordinated debt securities;
. waive a redemption payment with respect to any subordinated debt
security;
. make any change in the right of any holders of subordinated debt
securities regarding waivers of defaults or impair or affect the right
of any holder of a subordinated debt security of any series to receive
payment of principal, premium, if any, and interest on that security
on or after the due date expressed in that security or to bring suit
for the enforcement of any payment on or after the due date; or
. make any change in the above amendment and waiver provisions.
We and the trustee under the subordinated indenture may amend or supplement
the indenture or the debt securities issued thereunder without the consent of
any holder:
. to evidence the succession of another person to us, or successive
successions, and the assumption by the successors of our covenants,
agreements and obligations under the subordinated indenture;
. to add other covenants, restrictions or conditions for the protection
of the holders of all or any series of subordinated debt securities;
. to add events of default;
. to provide for the issuance of subordinated debt securities in coupon
form and to provide for exchangeability of those debt securities under
the indenture in fully registered form;
. to provide for the issuance of and to establish the form, terms and
conditions of subordinated debt securities of any series;
. to evidence and provide for the acceptance of appointment by a
successor trustee and to add or change any of the provisions of the
indenture necessary to provide for or facilitate the administration of
the trusts under the indenture by more than one trustee;
. to cure any ambiguity, or to correct or supplement any provision in
the indenture which may be defective or inconsistent with any other
provision contained in the indenture or in any supplemental indenture,
or to make any other provisions with respect to matters or questions
arising under that indenture, so long as the interests of holders of
debt securities of any series are not adversely affected in any
material respect under that indenture; or
- 32 -
. to make any change that does not adversely affect the rights of any
holder.
In determining whether series of subordinated debt securities rank equal
with each other for purposes of the default, waiver and amendment provisions
described above, a series that is convertible into equity securities of K&S is
not equal with a series that is not so convertible.
Description of Warrants
The following description describes the general terms and provisions of the
warrants to which any prospectus supplement may relate. The prospectus
supplement relating to the warrants will describe the particular term of the
warrants and the extent, if any, to which these general provisions may apply to
the warrants offered.
We may issue warrants to purchase senior debt securities, senior
subordinated debt securities, subordinated convertible debt securities,
preferred stock, depositary shares, common stock or any combination thereof. The
warrants may be issued independently or together with any other securities and
may be attached or separate from the other securities. Each series of warrants
will be issued under a separate warrant agreement to be entered into between a
warrant agent and us. The warrant agent will act solely as our agent in
connection with the warrants of any series and will not assume any obligation or
relationship of agency for or with holders or beneficial owners of warrants.
The applicable prospectus supplement will describe the terms of any
warrants and the related offering in respect of which this prospectus is being
delivered, including the following:
. the title of the warrants;
. the aggregate number of the warrants;
. the price or prices at which the warrants will be issued;
. the designation and terms of the underlying securities purchasable
upon exercise of the warrants and the number of such underlying
securities issuable upon exercise of the warrants;
. the price or prices at which the warrants may be exercised to purchase
the securities underlying them;
. the date on which the right to exercise the warrants shall commence
and the date on which the right shall expire;
. whether the warrants will be issued in registered form or bearer form;
. if applicable, the minimum or maximum amount of the warrants which may
be exercised at any one time;
. if applicable, the designation and terms of the other securities with
which the warrants are issued and the number of such warrants issued
with each such underlying warrant security;
. if applicable, the date on and after which the warrants and other
securities will be separately transferable;
. information with respect to book-entry procedures, if any;
. if applicable, a discussion of certain United States federal income
tax considerations;
. the procedures and conditions relating to the exercise of the
warrants; and
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
Description of Units
We may issue units consisting of common stock, warrants, debt securities,
preferred stock or any combination of those securities. The applicable
prospectus supplement will describe the terms of any units including the
following:
- 33 -
. the terms of the units and each of the securities included in the
units, including whether and under what circumstances the securities
included in the units may or may not be traded separately;
. the terms of any unit agreement governing the units; and
. the provisions for the payment, settlement, transfer or exchange of
the units.
Plan of Distribution
We may sell the securities being offered hereby in any of, or any
combination of, the following ways: directly to purchasers; through agents;
through underwriters; and/or through dealers.
Offers to purchase the securities may be solicited by agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
under this prospectus will be named, and any commissions payable by us to these
agents will be set forth, in a related prospectus supplement. Unless otherwise
indicated in a prospectus supplement, any agent will be acting on a reasonable
best efforts basis for the period of its appointment. Any agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the
securities so offered and sold.
If the securities are sold by means of an underwritten offering, we will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices, at market prices prevailing at the time of sale, or at prices
related to such prevailing market prices.
Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters. If any underwriter or underwriters are used in the sale of
securities, unless otherwise indicated in a related prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to some conditions precedent and that the underwriters with respect to a
sale of these securities will be obligated to purchase all such securities if
any are purchased.
We may grant to the underwriters options to purchase additional securities,
to cover over-allotments, if any, at the public offering price, with additional
underwriting commissions or discounts, as may be set forth in a related
prospectus supplement. If we grant any over-allotment option, the terms of that
over-allotment option will be set forth in the related prospectus supplement.
If we use a dealer in the sale of the securities in respect of which this
prospectus is delivered, we will sell the securities to the dealer as principal.
The dealer may then resell such securities to the public at varying prices to be
determined by such dealer at the time of resale. Any such dealer may be deemed
to be an underwriter, as such term is defined in the Securities Act, of the
securities so offered and sold. The name of the dealer and the terms of the
transaction will be set forth in the prospectus supplement relating to those
offers and sales.
We may also directly solicit offers to purchase securities and those sales
may be made by us directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resale of those securities. The terms of any sales of this type will be
described in the prospectus supplement.
- 34 -
Agents, underwriters and dealers may be entitled under relevant agreements
with us to indemnification by us against some liabilities, including liabilities
under the Securities Act, or to contributions with respect to payments which
such agents, underwriters and dealers may be required to make in respect
thereof.
Agents, underwriters and dealers may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities being offered,
including over-allotment, stabilizing and short-covering transactions in such
securities, and the imposition of a penalty bid, in connection with the
offering.
In connection with the offering of securities, the Underwriters may make
short sales of our shares and purchase these shares on the open market to cover
positions created by short sales. Such sales involve the sale by the
Underwriters of shares than they are required to purchase in an offering. Short
sales may be either covered or naked. Covered short sales are sales made in an
amount not greater than the Underwriters' over-allotment option to purchase
additional shares in the offering; naked short sales are sales in excess of the
over-allotment option. Underwriters may close out a covered short position
either by exercising their over-allotment option or purchasing shares in the
open market; naked short positions must be closed by purchasing shares in the
open market. Naked short positions are more likely to be created if the
Underwriters are concerned that there may be downward pressure on the price of
the shares in the open market after pricing that could adversely affect
investors who purchase in the offering. The Underwriters' purchases to cover
syndicate short sales may raise or maintain the market price of the stock or
prevent or retard a decline in the market place of the stock. As a result, the
price of the stock may be higher as a result of syndicate short sales than it
would otherwise be in an open market.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, us in the ordinary course of our
business.
Legal Matters
Certain legal matters in connection with the legality of any common
stock, preferred stock, debt securities and warrants offered hereby will be
passed upon for us by Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania.
Experts
The financial statements of Kulicke and Soffa Industries, Inc. incorporated
in this Prospectus by reference to the Annual Report on Form 10-K for the year
ended September 30, 2001, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Where You Can Find More Information
We are a public company and file annual, quarterly and special reports, as
well as proxy statements and other information with the SEC. You may read and
copy any of the documents we file with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, NW, Washington DC 20549 or at its Regional Offices
located at Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661-2511. You may obtain further information about the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. These SEC filings are also
available to the public over the Internet at the SEC's web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants like us that file electronically with the SEC.
Our common stock is quoted on the Nasdaq National Market and reports and other
information about us may also be inspected at the Nasdaq National Market at 1735
K Street, NW, Washington, DC 20007-1500.
This prospectus is only part of a registration statement on Form S-3 that
we have filed with the SEC under the Securities Act of 1933 and therefore omits
certain information contained in the registration statement. We have also filed
exhibits and schedules with the registration statement that are not included in
this prospectus. Statements contained in this prospectus as to the contents of
any contract or other document are not necessarily complete, and in such
instance we refer you to the copy of the contract or document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference. You may inspect a copy of the registration
statement, including the exhibits and schedules, without charge, at the public
reference room or obtain a copy from the SEC upon payment of the fees prescribed
by the SEC.
The SEC allows us to "incorporate by reference" certain information into
this prospectus, which means that we can disclose important information to you
by referring you to another document that we have filed with the SEC. The
information incorporated by reference is considered to be part of this
prospectus and information we file later with the SEC will automatically update
and supersede this information. We are incorporating by reference the documents
listed below and any future filings made by us with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we
terminate this offering.
We are incorporating by reference the following documents:
. Our Annual Report on Form 10-K for our fiscal year ended September 30,
2001, filed on December 21, 2002;
. Our Quarterly Reports on Form 10-Q for our fiscal quarters ended
December 31, 2001, March 31, 2002 and June 30, 2002, filed on
February 13, 2002, May 15, 2002 and August 14, 2002, respectively;
. Our Current Reports on Form 8-K filed on October 5, 2001, February 15,
2002 and April 18, 2002; and
. The description of our common stock and our preferred stock contained
in our registration statement on Form 8-A12G/A filed on September 11,
1995, SEC file number 000-0121.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations Department
Kulicke and Soffa Industries, Inc.
2101 Blair Mill Road
Willow Grove, PA 19090
Telephone: (215) 784-6000
You should rely only on the information we include or incorporate by
reference in this prospectus and any applicable prospectus supplement. We have
not authorized anyone to provide you with different or additional information.
The information contained in this prospectus or the applicable prospectus
supplement is accurate only as of the date on the front of those documents,
regardless of the time of delivery of this prospectus or the applicable
prospectus supplement or of any sale of our securities, and you should not
assume that the information in this prospectus or the applicable prospectus
supplement is accurate as of any other date.
- 35 -
PART II. Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses expected to be incurred by
Kulicke & Soffa in connection with the issuance and distribution of the
securities registered hereby, other than underwriting fees and discounts. All of
these expenses, except for the registration fee, are estimates:
Securities and Exchange Commission Registration Fee ............ $ 23,000
Printing and Engraving Expenses ................................ $ 20,000
Legal Fees and Expenses ........................................ $ 75,000
Accounting Fees and Expenses ................................... $ 50,000
Trustee's Fees and Expenses .................................... $ 12,000
Miscellaneous Expenses ......................................... $ 5,000
Total .......................................................... $185,000
Item 15. Indemnification of Directors and Officers.
Our By-laws require us to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed proceeding
by reason of the fact that he or she is or was our director or officer or is or
was serving at our request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, our best interests, and, with
respect to any criminal proceeding, had no reasonable cause to believe his or
her conduct was unlawful. Such indemnification as to expenses is mandatory to
the extent the individual is successful on the merits or otherwise in defense of
the matter or in defense of any claim, issue or matter therein. In addition,
Pennsylvania law permits us to provide similar indemnification to employees and
agents who are not directors or officers. Our By-laws provide, however, that we
will not indemnify a director who has breached or failed to perform the duties
of his office in a manner that constituted self-dealing, willful misconduct or
recklessness. The determination of whether an individual meets the applicable
standard of conduct set forth in our By-laws may be made by disinterested
directors, independent legal counsel or the shareholders. Pennsylvania law also
permits indemnification in connection with a proceeding brought by or in our
right to procure a judgement in our favor.
We expect that any Underwriting Agreement that we enter into in connection
with any offering of the securities registered hereby will provide for
indemnification by the underwriters specified therein of us and our officers and
directors, and for indemnification by us of the underwriters specified therein,
in each case, for certain liabilities arising under the Securities Act or
otherwise.
II-1
Item 16. Exhibits and Financial Statement Schedules.
Exhibit
Number Description of Document
------ -----------------------
1.1* Form of underwriting agreement for offering of common stock
1.2* Form of underwriting agreement for offering of debt securities (senior debt
securities, senior subordinated debt securities and/or subordinated debt
securities)
1.3* Form of underwriting agreement for offering of preferred
securities
1.4* Form of underwriting agreement for warrants and/or units
3.1 The Company's Form of Amended and Restated Articles of Incorporation as
of March 3, 1998, as amended (incorporated by reference to Exhibit 3.1
to the Company's Form S-3 filed with the SEC on October 2, 2001)
3.2 The Company's By-Laws, as amended through June 26, 1990, (incorporated by reference to Exhibit
to the Company's Form 8-A12G dated September 11, 1995, SEC file number 000-0012)
4.1 Form of senior debt securities indenture (1)
4.2 Form of senior subordinated debt securities indenture (1)
4.3 Form of subordinated debt securities indenture (1)
4.4 Form of any senior debt security (1)
4.5 Form of any senior subordinated debt security (1)
4.6 Form of any subordinated debt security (1)
4.7** The form of any certificate of designation with respect to any preferred stock
4.8** Form of unit agreement
4.9** Form of debt warrant agreement for warrants sold alone, including form of warrant
4.10** Form of debt warrant agreement for warrants sold attached to debt securities, including form of
warrant
4.11** Form of equity warrant agreement for warrants sold alone, including form of warrant
5.1 Opinion of Drinker Biddle & Reath LLP (1)
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.3 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5.1)(1)
24.1 Power of Attorney of certain directors and officers of Kulicke and Soffa Industries, Inc. (1)
24.2 Certified Resolutions (1)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
LaSalle Bank National Association, as trustee under the indenture with respect
to the senior debt securities (1)
25.2 Statement of Eligibility on Form T-1 under
the Trust Indenture Act of 1939, as amended, of LaSalle Bank National
Association, as trustee under the indenture with respect to the senior
subordinated debt securities (1)
25.3 Statement of Eligibility on Form T-1 under
the Trust Indenture Act of 1939, as amended, of LaSalle Bank National
Association, as trustee under the indenture with respect to the subordinated
debt securities (1)
* To be filed by amendment or as applicable to a particular offering of
securities, as an exhibit to a Current Report on Form 8-K, pursuant to
Regulation S-K, Item 601(b).
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934.
(1) Previously filed.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
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(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions disclosed under Item 15
above or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant by such director, officer
or controlling person in connection with the securities being registered hereby,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule
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430A and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time is was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Willow Grove, Commonwealth of Pennsylvania, on
August 16, 2002.
KULICKE AND SOFFA INDUSTRIES, INC.
By: */s/ C. Scott Kulicke
--------------------
C. Scott Kulicke
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Name Capacity Date
/s/ *C. Scott Kulicke Chairman of the Board and Chief Executive August 16, 2002
--------------------- Officer (Principal Executive Officer)
C. Scott Kulicke
/s/ Clifford G. Sprague Senior Vice President and Chief Financial August 16, 2002
----------------------- Officer (Principal Financial and Accounting
Clifford G. Sprague Officer)
/s/ *Philip V. Gerdine Director August 16, 2002
----------------------
Philip V. Gerdine
/s/ *John A. O'Steen Director August 16, 2002
--------------------
John A. O'Steen
/s/ *Allison F. Page Director August 16, 2002
--------------------
Allison F. Page
/s/ *MacDonnell Roehm, Jr. Director August 16, 2002
--------------------------
MacDonnell Roehm, Jr.
/s/ *Larry D. Striplin, Jr. Director August 16, 2002
---------------------------
Larry D. Striplin, Jr.
/s/ *C. William Zadel Director August 16, 2002
---------------------
C. William Zadel
*By: /s/ Clifford G. Sprague
-----------------------
Clifford G. Sprague
Attorney in fact
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EXHIBIT INDEX
-------------
Exhibit
Number Description of Document
------ -----------------------
1.1* Form of underwriting agreement for offering of common stock
1.2* Form of underwriting agreement for offering of debt securities (senior debt
securities, senior subordinated debt securities and/or subordinated debt
securities)
1.3* Form of underwriting agreement for offering of preferred
securities
1.4* Form of underwriting agreement for warrants and/or units
3.1 The Company's Form of Amended and Restated Articles of Incorporation as of March 3,
1998, as amended (incorporated by reference to Exhibit 3.1 to the Company's Form S-3 filed with the SEC
on October 2, 2001)
3.2 The Company's By-Laws, as amended through June 26, 1990, (incorporated by reference to Exhibit
2.2 to the Company's Form 8-A12G dated September 11, 1995, SEC file number 000-00121)
4.1 Form of senior debt securities indenture (1)
4.2 Form of senior subordinated debt securities indenture (1)
4.3 Form of subordinated debt securities indenture (1)
4.4 Form of any senior debt security (1)
4.5 Form of any senior subordinated debt security (1)
4.6 Form of any subordinated debt security (1)
4.7** The form of any certificate of designation with respect to any preferred stock
4.8** Form of unit agreement
4.9** Form of debt warrant agreement for warrants sold alone, including form of warrant
4.10** Form of debt warrant agreement for warrants sold attached to debt securities, including form of
warrant
4.11** Form of equity warrant agreement for warrants sold alone, including form of warrant
5.1 Opinion of Drinker Biddle & Reath LLP (1)
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.3 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5.1)(1)
24.1 Power of Attorney of certain directors and officers of Kulicke and Soffa Industries, Inc. (1)
24.2 Certified Resolutions (1)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
LaSalle Bank National Association, as trustee under the indenture with respect
to the senior debt securities (1)
25.2 Statement of Eligibility on Form T-1 under
the Trust Indenture Act of 1939, as amended, of LaSalle Bank National
Association, as trustee under the indenture with respect to the senior
subordinated debt securities (1)
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939,
as amended, of LaSalle Bank National Association, as trustee under the indenture
with respect to the subordinated debt securities (1)
* To be filed by amendment or as applicable to a particular offering of
securities, as an exhibit to a Current Report on Form 8-K, pursuant to
Regulation S-K, Item 601(b).
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934.
(1) Previously filed.
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