What changed in this filing

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Item 1. Business

2022-11-17 compared with 2021-11-18 · 90 added, 92 removed, 176 unchanged (51% of the section changed)

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Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are also available on the SEC's website at www.sec.gov .

Our year end for each of fiscal 2021, 2020 and 2019 was October 2, 2021, October 3, 2020, and September 28, 2019, respectively.

Our year end for each of fiscal 2022, 2021 and 2020 was October 1, 2022, October 2, 2021, and October 3, 2020, respectively.

Key Events in Fiscal 2022

Business Combination

On January 19, 2021, we entered into and closed a Stock Purchase Agreement with Uniqarta, Inc.

(“Uniqarta”) and the equity holders of Uniqarta to purchase all of Uniqarta's outstanding equity interests.

The purchase price consisted of $26.5 million in cash paid at closing.

Uniqarta is a developer of laser transfer technology and the acquisition expands our presence in the LED end market.

Upon the closing of the acquisition on January 19, 2021, Uniqarta became our wholly-owned subsidiary.

Signing of definitive agreement for the acquisition of Advanced Jet Automation Co., Ltd.

On September 8, 2022, the Company announced that one of its subsidiaries signed a definitive agreement for the acquisition of Advanced Jet Automation Co., Ltd.

(“AJA”), a technology company headquartered in Taiwan.

Upon the consummation of the transaction, we will acquire the designated dispensing assets and the dispensing business of AJAs affiliate, Samurai Spirit Inc., a leading developer and manufacturer of high-precision micro dispensing equipment and solutions in Taiwan.

The acquisition is expected to close in fiscal 2023, subject to customary closing conditions, including applicable regulatory approvals.

COVID-19 Pandemic

The COVID-19 pandemic has significantly impacted the global economy, disrupted global supply chains, created volatility in equity market valuations, created significant volatility and disruption in financial markets, and significantly increased unemployment levels.

In addition, the pandemic has resulted in temporary closures and failures of many businesses and the institution of social distancing and sheltering-in-place requirements in many jurisdictions.

As these measures were relaxed, in certain jurisdictions there has been a resurgence of illnesses, which has led to more severe restrictions.

In response to the pandemic, we temporarily closed certain offices in the United States, Europe and Asia as well as executed our Business Continuity Plan (“BCP”), which measures have disrupted how we operate our business.

While we are currently operating at full capacity in all of our manufacturing locations, work-from-home practices were instituted across many offices worldwide, which have impacted our non-manufacturing productivity, including our research & development.

At this point, our BCP has not included significant headcount reductions or changes in our overall liquidity position.

As certain countries have relaxed the measures over the past few months, we have restarted certain activities in accordance with local guidelines.

We are impacted by the global shortage in electronic components and our supply chain is strained in some cases as the availability of materials, logistics and freight options are challenging in many jurisdictions.

As a result, we have at times experienced delays in customer deliveries during the course of fiscal 2021.

However, in most cases we successfully managed our customers' expectations.

Demand for our products was consistent with or exceeded our expectations for fiscal 2021.

We believe semiconductor industry macroeconomics have not changed and we anticipate the industry’s long-term growth projections will normalize, but the sector could see short-term volatility and potential disruption.

Various countries have announced measures, including government grants, tax changes and tax credits, among other types of relief, in response to the pandemic.

For fiscal 2021, we received a $2.0 million COVID-19-related grant from the Singapore government as well as other measures including rental rebates and a social insurance exemption, which are not material to our operating results.

Based on our current evaluation, the pandemic has not had a material impact on our financial condition and operating results through fiscal 2021.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the COVID-19 pandemic, for at least the next twelve months from the date of filing.

However, as this is a highly dynamic situation, and it is still developing rapidly, including new strains as it relates to the effectiveness and utilization rates of vaccines for COVID-19 and its variants, there is uncertainty surrounding our business, and our near- and long-term liquidity, financial condition and operating results could deteriorate.

For other information, please see Part II Item 1A.

Risk Factors - The effects of the COVID-19 pandemic could adversely affect our business, results of operations, and financial condition.

The COVID-19 pandemic and the resulting containment measures have significantly impacted the global economy, disrupted global supply chains, created volatility in equity market valuations, created significant volatility and disruption in financial markets, and affected unemployment levels.

The global COVID-19 response remains dynamic and some countries continue to impose quarantines, containment measures or travel restrictions.

In certain jurisdictions there has been a resurgence of illnesses or the threat of emerging new variants of the virus, which has led to more severe restrictions.

In response to the COVID-19 pandemic, we previously had to temporarily close certain offices in the United States, Europe and Asia as well as execute our Business Continuity Plan (“BCP”), which measures have disrupted our business operations.

Our manufacturing locations have returned to normal operations and, as most countries have relaxed the containment measures over the past few months, we have recalibrated our BCP and restarted other activities in conformance with local guidelines.

Our BCP has not included significant headcount reductions or changes in our overall liquidity position.

Macroeconomic Headwinds

We continue to be impacted by the global shortage in electronic components and our supply chain is strained in some cases as the availability of materials, logistics and freight options are challenging in many jurisdictions, especially to, from and within China.

In addition, the costs of logistics have increased as a result of macroeconomic conditions and general inflationary pressures, and labor shortages have further contributed to rising costs across the supply chain, further exacerbating the impact the pandemic has had on the supply chain.

We believe that the semiconductor industry macroeconomics have not changed and we anticipate that the industry’s long-term growth projections will normalize, but the sector is seeing short-term volatility and disruptions due to general inflationary pressures, falling consumer sentiment, or economic downturn caused, directly or indirectly, by various macroeconomic factors, including the prolonged Ukraine/Russia conflict.

The prolonged Ukraine/Russia conflict did not materially impact our financial condition and operating results in fiscal 2022.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the prolonged Ukraine/Russia conflict or other macroeconomic factors, for at least the next twelve months from the date of filing of this Annual Report on Form 10-K.

However, this is a highly dynamic situation.

As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand or supply conditions and our near- and long-term liquidity, our financial condition and, consequentially, our operating results could deteriorate.

The effects of the COVID-19 pandemic and general macroeconomic conditions could adversely affect our business, results of operations, and financial condition.

For other information, please see Part I Item 1A.

Risk Factors.

Share Repurchase Program

On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020.

In 2018 and 2019, the Board of Directors increased the share repurchase authorization under the Program to $200 million and $300 million, respectively.

On July 3, 2020, the Board of Directors increased the share repurchase authorization under the Company's existing share repurchase program by an additional $100 million to $400 million, and extended its duration through August 1, 2022.

In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively.

On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.

The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program.

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The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.

During the fiscal year ended October 2, 2021, the Company repurchased a total of approximately 215.0 thousand shares of common stock at a cost of approximately $10.2

As of October 2, 2021, our remaining share repurchase authorization under the Program was approximately $132.0 million.

On August 26, 2021, May 28, 2021, March 5, 2021 and December 10, 2020, the Board of Directors declared a quarterly dividend of $0.14 per share of common stock.

During the fiscal year ended October 1, 2022, the Company repurchased a total of approximately 2,782.1 thousand shares of common stock at a cost of approximately $132.8 million.

The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheets.

The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method.

Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.

If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings.

Accelerated Share Repurchase (“ASR”)

In addition to the 2,782.1 thousand shares of common stock repurchased under the Program during the fiscal year ended October 1, 2022, on March 9, 2022, the Company entered into an ASR agreement (the “March 2022 ASR Agreement”) with an investment bank counterparty (“Dealer”) to repurchase $150 million of the Company's common stock.

The March 2022 ASR Agreement was entered into pursuant to the Company's current $800 million share repurchase authorization.

Under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock at a cost of approximately $120 million on March 10, 2022.

The final number of shares to be repurchased will be based on the volume-weighted average price of the Company’s common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the March 2022 ASR Agreement.

For accounting purposes, the March 2022 ASR Agreement is evaluated as an unsettled forward contract indexed to the Company’s own stock, with $30 million being classified within common stock.

At settlement, the Dealer may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the Dealer.

The March 2022 ASR Agreement was settled between the Company and the Dealer on April 22, 2022 and the Company received an additional 344.5 thousand shares of common stock from the Dealer.

In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the March 2022 ASR Agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity.

As of October 1, 2022, our remaining stock repurchase authorization under the Program was approximately $249.2 million.

On August 30, 2022, June 8, 2022, March 3, 2022 and October 18, 2021, the Board of Directors declared a quarterly dividend of $0.17 per share of common stock.

During the fiscal year ended October 1, 2022, the Company declared dividends of $0.68 per share of common stock.

The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's shareholders.

The declaration of any future cash dividend is at the discretion of the Board of Directors, subject to applicable laws, and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s shareholders.

Business Environment

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Approximately 94.4% and 96.4% of our net revenue for fiscal 2022 and 2021, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region.

Approximately 55.6% and 51.6% of our net revenue for fiscal 2021 and 2020, respectively, was for shipments to customers located in China, which is subject to risks and uncertainties related to the respective policies of the governments of China and the U.S.

Approximately 56.9% and 55.6% of our net revenue for fiscal 2022 and 2021, re spectively, was for shipments to customers located in China, which is subject to risks and uncertainties related to the respective policies of the governments of China and the U.S.

Furthermore, there is a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China, our manufacturing operations in China, and our future plans in the region.

and several other countries have levied tariffs on certain goods, and have introduced other trade restrictions, which, together with the impact of the COVID-19 pandemic discussed above, has resulted in substantial uncertainties in the semiconductor, LED, memory and automotive markets.

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To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have continued our efforts to maintain a strong balance sheet.

As of October 2, 2021, our total cash, cash equivalents and short-term investments were $739.8 million, a $209.7 million increa se from the prior fiscal year end.

We believe our strong cash position will allow us to continue to invest in product development and pursue non-organic opportunities.

As of October 1, 2022, our total cash, cash equivalents and short-term investments were $775.5 million, a $35.7 million increase from the prior fiscal year end.

We believe our strong cash position will allow us to continue to invest in product development and pursue non-organic growth opportunities.

For example, as described in “Item 1.

- Business - Key events in Fiscal 2022”, the Company announced that one of its subsidiaries signed a definitive agreement for the acquisition of AJA.

Technology Leadership

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RAPID™ is the first product in the smart bonder series to address the Industry 4.0 requirements.

The key features of this series include real-time process & performance monitoring, real-time equipment health monitoring, advanced data analytics & traceability, predictive maintenance monitoring & analysis, and detection & enhanced post-bond inspection.

The key features of this series include real-time process and performance monitoring, real-time equipment health monitoring, advanced data analytics and traceability, predictive maintenance monitoring and analysis, and detection and enhanced post-bond inspection.

We optimize our bonder platforms to deliver variants of our products to serve emerging high-growth markets.

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Furthermore, we continually research adjacent market segments where our technologies could be used.

Many of these initiatives are in the early stages of development and some have yielded results such as the Asterion™ hybrid wedge bonder, which is built on an enhanced architecture that includes an expanded bond area, new robust pattern recognition capabilities and extremely tight process controls.

Many of these initiatives are in the early stages of development and some have yielded results such as the Asterion™ hybrid wedge bonder, which is built on an enhanced architecture that includes an expanded bond area, laser bonding, new robust pattern recognition capabilities and extremely tight process controls.

Another example of our developing equipment for high-growth niche markets is our AT Premier PLUS .

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Our leadership in system-in-package (“SiP”), multi-chip module (“MCM”) and heterogeneous integration are well positioned to address the requirements in this emerging and growing trend.

In advancing our leadership in ultra-fine-pitch advanced packaging solution, we are offering fluxless bonding capability in selected advanced packaging equipment.

We have also broadened our advanced packaging solutions for mass reflow to include high accuracy flip chip and fan-out wafer level packaging (“FOWLP”) with the Katalyst TM .

Our electronics assembly solutions are also capable of advanced package-on-

package, wafer level packaging ("WLP"), embedded die, and active and passive die placement for SiP, enabling us to diversify our business while further expanding market reach into the automotive, LED lighting, medical and industrial segments.

Our electronics assembly solutions are also capable of advanced package-on-package, wafer level packaging (“WLP”), embedded die, and active and passive die placement for SiP, enabling us to diversify our business while further expanding market reach into the automotive, LED lighting, medical and industrial segments.

During fiscal 2019, we entered into a new market, miniLED for display backlighting and direct emitting display, with the launch of PIXALUX TM .

The PIXALUX is a high-speed die placement equipment, and one of the most mass production ready solutions for miniLED placement in the market.

The PIXALUX TM is a high-speed die placement equipment, and one of the most mass production ready solutions for miniLED placement in the market.

MiniLEDs are used in TV, IT display, large display, signage display, consumer display and automotive markets.

The usage of miniLEDs is expected to grow significantly over the next few years, followed by microLED adoption.

We intend to leverage the momentum we already have with PIXALUX to continue to innovate and provide solutions to the industry to meet the challenges of packaging and assembling the next-generation of electronic devices.

We intend to leverage the momentum we already have with PIXALUX TM to continue to innovate and provide solutions to the industry to meet the challenges of packaging and assembling the next-generation of electronic devices.

In order to help strengthen this position, we have developed LUMINEX TM which is a laser-based mini and micro LED die transfer system.

It is a highly flexible system capable of a single die transfer, multi-die transfer and mass transfer for the various applications in the advanced display value chain.

LUMINEX combines laser technology, state-of-the-art optical systems, material engineering and high precision motion control to deliver industry leading throughput and placement accuracy.

LUMINEX TM combines laser technology, state-of-the-art optical systems, material engineering and high precision motion control to deliver industry leading throughput and placement accuracy.

We bring the same technology focus to our tools business, driving tool design and manufacturing technology to optimize the performance and process capability of the equipment in which our tools are used.

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We believe our unique ability to simultaneously develop both equipment and tools is a core strength supporting our products' technological differentiation.

Our major customers include IDMs and OSATs, industrial manufacturers and automotive electronics suppliers.

Our major customers include IDMs, OSATs, industrial manufacturers and automotive electronics suppliers.

Revenue from our customers may vary significantly from year-to-year based on their respective capital investments, operating expense budgets, and overall industry trends.

There was no customer with sales representing more than 10% of net revenue in fiscal 2020 and 2019.

The following table reflects our top ten customers, based on net revenue, for each of the last three fiscal years:

Fiscal 2021 Fiscal 2020 Fiscal 2019

1 ASE Technology Holding (1) 1 Forehope Electronic Co., Ltd 1 Super Power International Ltd (2)

2 Haoseng Industrial Co., Ltd.

(2) 2 Haoseng Industrial Co., Ltd.

(2) 2 Micron Technology, Inc.

3 Tianshui Huatian Technology Co., Ltd.

3 ASE Technology Holding 3 First Technology China, Ltd.

4 Forehope Electronic Co., Ltd 4 Xinye Electronics Co.

(2) 4 ASE Technology Holding

5 Powertech Technology Inc.

5 Regent Manner Limited 5 Xinye Electronics Co.

6 Matfron Semiconductor Technology Co.

Ltd (2) 6 First Technology China Ltd (2) 6 Forehope Electronic Co., Ltd

7 Regent Manner Limited 7 Matfron Semiconductor Technology Co.

Ltd (2) 7 Infineon Technologies

8 Changjin Technology (Shanghai) Co., Ltd.

(2) 8 Tesla, Inc.

8 ST Microelectronics

9 Super Power International Ltd.

(2) 9 Micron Technology, Inc.

9 On Semiconductor

10 First Technology China Ltd.

(2) 10 ST Microelectronics 10 Haoseng Industrial Co., Ltd.

(1) Represents more than 10% of our net revenue for the applicable fiscal year.

(2) Distributor of our products.

For other information regarding our concentrations and customers, see “Part II - Item 8.

Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 17:

Commitments, Contingencies and Concentrations”.

There was no customer with sales representing more than 10% of our net revenue in fiscal 2022.

Sales and Customer Support

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however, many outsourced parts and components are only available from a single or limited number of sources.

Our ball bonder, wedge bonder, AT Premier, APAMA and Katalyst bonder manufacturing and assembly is done at our facility in Singapore.

Our ball bonder, wedge bonder, AT Premier, APAMA and Katalyst TM bonder manufacturing and assembly is done at our facility in Singapore.

Our Hybrid and Electronic Assembly solutions manufacturing and assembly is done at our facility in the Netherlands.

We have ISO 9001 and ISO 14001 certifications for our equipment manufacturing facilities in Singapore and the Netherlands.

We have ISO 9001 and ISO 14001 certifications for our equipment manufacturing facilities in Singapore and in the Netherlands.

We manufacture dicing blades, capillaries and a portion of our bonding wedge inventory at our facility in China.

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We both produce and outsource the production of our bonding wedges.

Both the China and Israel facilities are ISO 9001 certified.

The China facility is also ISO 14001 and ISO 18001 certified.

Our China and Israel facilities are ISO 9001 certified.

Our China facility is also ISO 14001 and ISO 18001 certified.

Research and Product Development

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Significant competitive factors in the semiconductor equipment market include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support, each of which contribute to lower the overall cost per package being manufactured.

Our major equipment competitors are ASM Pacific Technology, BE Semiconductor Industries N.V.

Our major equipment competitors are ASM Pacific Technology, BE Semiconductor Industries N.V., Hanwha Precision Machinery Co., Ltd.

and Shinkawa Ltd.

Significant competitive factors in the semiconductor packaging materials industry include performance, price, delivery, product life, and quality.

Our significant tools competitors are PECO, Disco Corporation, Small Precision Tools and CCTC.

Our significant tools competitors are Precision Engineering Company, Disco Corporation, Small Precision Tools Co.

and Chaozhou Three-Circle (Group) Co., Ltd.

In each of the markets we serve, we face competition and the threat of competition from established competitors and potential new entrants, some of which may have greater financial, engineering, manufacturing, and marketing resources.

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Our talented employees are critical to our ability to achieve the Company’s vision to be the leading technology and service provider of innovative interconnect solutions enabling a smart future.

As of October 2, 2021, we had 2,854 regular full-time employees and 732 temporary workers worldwide.

As of October 1, 2022, we had 2,944 full-time employees and 223 temporary workers worldwide.

Diversity & Inclusion

We are committed to providing a diverse and collaborative environment that is rich in opportunities and which enables our employees to grow both professionally and personally in their careers within the organization.

We are also committed to treating employees with dignity and respect.

Diversity is important at K&S and we believe that the combined knowledge and diverse views that our employees contribute across our global locations strengthens our competitive edge.

We value different backgrounds and celebrate unique perspectives and believe that diversity and inclusion are essential to creating an environment where we can achieve our best innovation essential to the success of K&S.

In fiscal year 2021, the Company formalized a Diversity & Inclusion Pillar under its Corporate Social Responsibility initiatives with a committee comprising team members from across the globe.

This committee’s vision is to enhance and improve the experience of everyone who works at the Company;

Diversity is important to the Company and we believe that the combined knowledge and diverse views that our employees contribute across our global locations strengthens our competitive edge.

We value different backgrounds, celebrate unique perspectives, and believe that diversity and inclusion are essential to creating an environment where we can achieve our best innovation essential to the success of the Company.

In fiscal 2022, the Company incorporated its Diversity & Inclusion (“D&I”) program into its Environmental, Social and Governance (“ESG”) structure.

The D&I program's vision is to enhance and improve the experience of everyone who works at the Company;

encourage and recognize their contributions and successes, in an inclusive, cohesive, and collegial environment;

and celebrate the diverse voices of our employees.

In furtherance of that vision, in fiscal 2022, the Company conducted an organization equity assessment, hosted global trainings and diversity events which educated employees more about D&I in the workplace, and adopted an 18-month strategic plan.

Safe Workplace

We endeavor to provide a safe and healthy workplace for all our employees.

The health and safety of our employees is of paramount importance to K&S, and forms an integral part of our organizational culture.

The health and safety of our employees is of paramount importance to the Company, and forms an integral part of our organizational culture.

We have Environment, Health and Safety (“EHS”) practices, objectives and performance targets at each of our key manufacturing and R&D sites, which are overseen by an EHS Committee, led by an EHS Manager or a Safety Representative from each key operations function.

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This training is included in our new hire on-boarding programs with employee-wide refresher trainings conducted every two years.

Additionally, as part of our business continuity measures, we have assembled a management-led COVID-19 Committee comprising directors and managers of various key departments to provide global oversight and guidance in implementing site-specific business continuity and risk mitigation plans across our key sites.

We regularly communicate with country management teams and tailor our policies according to the latest developments and guidelines provided by global authorities such as World Health Organization (WHO) and the local authorities at each site with the goal of ensuring the safety of all our team members whilst minimizing disruption to operations and providing support to our local communities.

Additionally, as part of our business continuity measures and in response to the COVID-19 pandemic, we have assembled a management-led COVID-19 Committee comprising directors and managers of various key departments to provide global oversight and guidance in implementing site-specific business continuity and risk mitigation plans across our key sites.

We regularly communicate with country management teams and tailor our policies according to the latest developments and guidelines provided by global authorities such as World Health Organization (“WHO”) and the local authorities at each site with the goal of ensuring the safety of all our team members while minimizing disruption to operations and providing support to our local communities.

Human Resource (“HR”) Practices

At K&S, we aim to recruit, develop and retain a high performing and diverse workforce whilst fostering a safe and productive work environment for employees to maximize individual and organizational potential.

At K&S, we aim to recruit, develop and retain a high performing and diverse workforce while fostering a safe and productive work environment for employees to maximize individual and organizational potential.

Our regional HR managers support the local leaders and managers, ensuring that our employment and labor practices adhere to regional and local regulations.

We continually review these policies and benchmark them against market peers to help ensure that we implement leading practices on recruitment, onboarding and employee development.

Our HR function also includes centers of excellence in Talent Management, Talent Acquisition, HR Management Information System and Compensation, ensuring best practices in these important areas.

Our HR function also includes centers of excellence in Talent Management, Talent Acquisition, HR Management Information System, and Global Compensation and Benefits, ensuring best practices in these important areas.

Employee Development

We believe in investing in our employees’ professional growth by encouraging them to continually develop their functional and leadership skills and to gain different experiences across the Company as they progress along their career paths and grow within our organization.

Our Learning and Development Framework which is based on identified professional and management competencies and our K&S core values, is tailored to specific target groups such as new hires, professional and support staff levels, manager levels as well as identified key talents from our succession planning process.

Our Learning and Development Framework which is based on identified professional and management competencies and the Company’s core values, is tailored to specific target groups such as new hires, professional and support staff levels, manager levels as well as identified key talents from our succession planning process.

These development programs are also based on the 70/20/10 learning and development model under which individuals obtain 70% of their knowledge through experiential learning, 20% through social learning and 10% from formal educational events.

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Compensation & Benefits

We strive to ensure fair and equitable pay for all employees, and we obtain market knowledge about pay levels by participating in several globally recognized compensation surveys annually.

We strive to ensure fair, equitable and competitive pay for all employees within the locations where they work, and we obtain market knowledge about pay levels by participating in multiple globally recognized compensation surveys annually.

The survey organizations pool our data together with all the responding companies to determine market relevant pay ranges for all our positions.

Our analysis and programs also evaluate industry sector information most relevant to us.

The Company also strives to ensure that our employee benefits are compliant in the cities, states and countries in which we operate, while annual benefits benchmarking ensures that our benefits are attractive in the markets where we compete for talent.

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Following employee feedback in the last survey, the Company has introduced a formalized career progression framework and associated tools to provide clarity and guidance to both managers and employees.

The framework provides clarity and tools for employees in the Professional and Management Career tracks on the requisite competencies for advancement to the next career level within the Company.

Employees are encouraged to enroll in the various training courses intended to support their development in the required competency stages as they chart their career progression with the Company.

Work flexibility, which had been critical to our success throughout the COVID-19 pandemic, has now become part of our culture.

We have provided tools and infrastructure to enable employees the choice and flexibility of a range of flexible work arrangement options that best meet their needs while allowing them to continue to fulfill business objectives.

Open Door Policy

We maintain an open-door policy and provide multiple avenues for employees to voice their concerns and raise suggestions.

Employees may also report any grievances through the global Whistleblower Hotline.

Employees also have access to local HR representatives and the Global Vice President of HR.

We maintain an open-door policy through our grievance and whistleblowing procedures and provide multiple avenues for employees to voice their concerns and raise suggestions.

Employees may report any grievances to their immediate supervisor, local HR representatives or the Global Vice President of HR.

Employees may also raise any concerns of legal violation, violation of the Company ’ s codes and policies, improper or unethical business practices, or concealment of any wrong-doing through the whistleblower hotline or website.

We take every raised complaint seriously and prohibit any form of retaliation against any employee for lodging a complaint in good faith.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business