<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Engineering Measurements Company
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
--------------------------------------------------------------------------------
(Title of Class of Securities)
292 880 101
--------------------------------------------------------------------------------
(CUSIP Number)
Richard P. Beck
Advanced Energy Industries, Inc.
1625 Sharp Point Drive
Fort Collins, CO 80525
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 5, 2000
--------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ]
(continued on following page)
Page 1 of 15 Pages
<PAGE> 2
------------------------------------------
CUSIP No. 292 880 101 13D
------------------------------------------
------- ------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Advanced Energy Industries, Inc.
84-0846841
------- ------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
------- ------------------------------------------------------------------------
3 SEC USE ONLY
------- ------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
------- ------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
------- ------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
----- ---------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 2,534,583
----- ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
----- ---------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
2,534,583
------- ------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,534,583
------- ------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *
[ ]
------- ------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60.0%
------- ------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
CO
------- ------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 15 Pages
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Neither the filing of this Schedule 13D nor any of its contents shall be deemed
to constitute an admission by Advanced Energy Industries, Inc. that it is the
beneficial owner of any of the shares of common stock of Engineering
Measurements Company referred to herein for purposes of Section 13(d) of the
Securities Exchange Act of 1934 or for any other purpose, and such beneficial
ownership is expressly disclaimed.
Item 1. Security and Issuer
This statement on Schedule 13D relates to the common stock, $.01
par value ("Issuer Stock") of Engineering Measurements Company, a Colorado
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 600 Diagonal Highway, Longmont, CO 80501.
Item 2. Identity and Background
The name of the person filing this statement is Advanced Energy
Industries, Inc., a Delaware corporation ("Advanced Energy"). The address of the
principal office and place of business of Advanced Energy is 1625 Sharp Point
Drive, Fort Collins, Colorado 80525.
Advanced Energy is a global leader in the development, marketing
and support of technology solutions that are critical in the manufacture of
semiconductors, data storage products and flat panel displays, as well as in
other applications that involve surface modification and process power control.
Advanced Energy offers a comprehensive line of technology solutions including
power conversion and control systems, process monitoring and control tools,
ion-beam sources, dynamic temperature control products and plasma abatement
systems.
Schedule A to this statement sets forth for each of Advanced
Energy's directors and executive officers, as of the date of this statement, his
(a) name, (b) residence or business address, and (c) present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted.
During the past five years, neither Advanced Energy nor, to
Advanced Energy's knowledge, any person named in Schedule A to this statement,
has been convicted in a criminal proceeding, excluding traffic violations or
similar misdemeanors.
During the past five years, neither Advanced Energy nor, to
Advanced Energy's knowledge, any person named in Schedule A to this statement,
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment or decree or final order enjoining future violations of, or prohibiting
or mandating activity subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
This statement on Schedule 13D relates to the shares of Issuer
Stock that are subject to the Voting Agreements (as defined in Item 4). The
parties to the Voting Agreements
Page 3 of 15 Pages
<PAGE> 4
have entered into such agreements in connection with the Agreement and Plan of
Reorganization dated as of July 6, 2000 (the "Agreement"), by and among Advanced
Energy, Flow Acquisition Corporation, a Colorado corporation and a wholly owned
subsidiary of Advanced Energy ("Merger Sub"), and the Issuer. Pursuant to the
Agreement and subject to the conditions set forth in the Agreement, including
without limitation approval of the Agreement by the shareholders of the Issuer,
Merger Sub will be merged with and into the Issuer (the "Merger"). Each share of
Issuer Stock outstanding as of the effective time of the Merger will be
converted into the right to receive at least 0.2018 shares of common stock of
Advanced Energy (the "Exchange Ratio"). Also at the effective time of the
Merger, Advanced Energy will assume any and all options to purchase Issuer Stock
that are then outstanding and convert them into options to purchase common stock
of Advanced Energy, based on the Exchange Ratio. This summary of the Merger is
qualified in its entirety by reference to the Agreement, a copy of which is
filed with this statement as Exhibit 2.1 and incorporated herein by reference.
Item 4. Purpose of Transaction
This statement on Schedule 13D relates to the 2,534,583 shares of
Issuer Stock that are subject to the Voting Agreements, as described below (the
"Subject Shares"). The parties to the Voting Agreements have entered into such
agreements in connection with the Agreement, pursuant to which Merger Sub will
be merged with and into the Issuer, with the Issuer surviving the Merger as a
wholly owned subsidiary of Advanced Energy. References in this statement on
Schedule 13D to the "Surviving Corporation" are to the Issuer following the
effective time of the Merger. Shareholders of the Issuer will become
stockholders of Advanced Energy, and Merger Sub will cease to exist following
the effective time of the Merger. Each share of Issuer Stock that is outstanding
as of the effective time of the Merger will be converted into the right to
receive at least 0.2018 shares of common stock of Advanced Energy. Also at the
effective time of the Merger, Advanced Energy will assume any and all options to
purchase Issuer Stock that are outstanding and convert them into options to
purchase common stock of Advanced Energy, based on the Exchange Ratio.
(a) and (b) The shareholders of the Issuer identified in Schedule
B to this statement (the "Shareholders") have entered into voting agreements
with Advanced Energy (the "Voting Agreements"), pursuant to which each
Shareholder has granted to Advanced Energy, or its nominee, an irrevocable proxy
to vote such Shareholder's Subject Shares in favor of the Agreement and against
any action or agreement which would impede, interfere with or prevent the
Merger. Also pursuant to the Voting Agreements, each Shareholder has agreed not
to (i) transfer any of the Subject Shares owned by the Shareholder, except
pursuant to the Voting Agreement or the Agreement, or (ii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Subject Shares owned by the Shareholder. The Shareholders have represented to
Advanced Energy that the Subject Shares are beneficially owned by the
Shareholders. The number of Subject Shares held by each Shareholder is set forth
in Schedule B to this statement. As a result of the Voting Agreements, Advanced
Energy may be deemed to share with the Shareholders the voting and dispositive
power of the Subject Shares. The Voting Agreements will terminate on the earlier
to occur of (A) the date upon which the Merger Agreement is terminated in
accordance with its terms, and (B) December 31, 2000. This summary of the Voting
Agreements is qualified in its entirety by reference to the form of Voting
Page 4 of 15 Pages
<PAGE> 5
Agreement filed with this statement as Exhibit 3.1, the contents of which are
incorporated herein by reference.
As a condition to completing the Merger, which condition may be
waived by Advanced Energy, the persons identified by the Issuer as "affiliates"
of the Issuer (the "Affiliates") must enter into agreements with Advanced Energy
(the "Affiliate Agreements"), pursuant to which each of the Affiliates will
agree not to sell, transfer or otherwise dispose of, or reduce his, her or its
risk with respect to any Issuer Stock (except pursuant to the Merger) or any
common stock of Advanced Energy issued to the Affiliate in the Merger, in each
case until after Advanced Energy shall have publicly released a report that
includes combined financial results of Advanced Energy for a period of at least
30 days of combined operations of Advanced Energy and the Surviving Corporation.
This summary of the Affiliate Agreements is qualified in its entirety by
reference to the form of Affiliate Agreement filed with this statement as
Exhibit 3.2, the contents of which are incorporated herein by reference. As a
result of the Affiliate Agreements, if and when they are executed and delivered
to Advanced Energy, Advanced Energy may be deemed to acquire shared dispositive
power in respect of the shares of Issuer Stock held by the Affiliates; however,
Advanced Energy intends to disclaim beneficial ownership of such shares.
(c) Not applicable.
(d) The persons who are officers and directors of Merger Sub
immediately prior to the effective time of the Merger shall become the officers
and directors, respectively, of the Surviving Corporation. Each of the persons
set forth below currently holds the position(s) of Merger Sub set forth opposite
his name:
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
Douglas S. Schatz Chairman of the Board and Director
James Gentilcore President, Director
David K. Smith Chief Financial Officer, Secretary and Director
Hollis L. Caswell Director
Charles E. Miller Director
</TABLE>
(e) The Articles of Incorporation of Merger Sub shall become the
Articles of Incorporation of the Surviving Corporation. As a result, upon the
effectiveness of the Merger, the authorized capitalization of the Issuer will be
changed to that of Merger Sub. The authorized capitalization of Merger Sub
consists of 1,000 shares of common stock.
(f) Not applicable.
(g) Upon the effectiveness of the Merger, the Articles of
Incorporation of Merger Sub shall become the Articles of Incorporation of the
Surviving Corporation, until thereafter amended in accordance with applicable
Colorado law and the provisions of such Articles of Incorporation and the bylaws
of the Surviving Corporation. Upon the effectiveness of the Merger, the bylaws
of Merger Sub shall become the bylaws of the Surviving Corporation, until
thereafter amended in accordance with applicable Colorado law and the provisions
of such
Page 5 of 15 Pages
<PAGE> 6
bylaws and the Articles of Incorporation of the Surviving Corporation. As a
result of the Merger, the Advanced Energy will hold the voting and dispositive
power of all of the capital stock of the Surviving Corporation.
(h) The Issuer Stock will be de-listed from the Nasdaq National
Market, following the effective time of the Merger.
(i) As a result of the Merger, the Issuer Stock will become
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934.
(j) Except as described in this statement, Advanced Energy has no
current plan or proposal that relates to, or may result in, any of the matters
listed in Item 4(a) through (j) of Schedule 13D; however, Advanced Energy
reserves the right to develop and implement other plans or proposals.
Item 5. Interests in Securities of the Issuer
(a) and (b) Advanced Energy may be deemed to be the beneficial
owner of the 2,534,583 Subject Shares by reason of the Voting Agreements. The
Subject Shares constitute approximately 60.0% of the outstanding shares of
Issuer stock. Advanced Energy may be deemed to have shared voting and
dispositive power in respect of the Subject Shares for the reasons described in
Item 4 of this statement. Advanced Energy does not have any rights in respect of
the Subject Shares, other than those granted to it pursuant to the Voting
Agreements, and disclaims beneficial ownership of the Subject Shares. To the
best of Advanced Energy's knowledge, none of the persons named in Schedule A to
this statement beneficially owns any Issuer Stock, except for (i) James
Gentilcore who owns 1,000 shares and (ii) Trung Doan who owns 10,000 shares.
Schedule B to this statement includes with respect to each
Shareholder his (i) name, (ii) residence or business address, and (iii) present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is conducted.
To Advanced Energy's knowledge, none of the Shareholders has been convicted in a
criminal proceeding, excluding traffic violations or similar misdemeanors,
during the past five years. To Advanced Energy's knowledge, during the past five
years, none of the Shareholders was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction, as a result of which such
person was or is subject to a judgment or decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal or state
securities laws or finding any violation with respect to such laws. Information
included in this statement, including information set forth on Schedule B,
relating to the Shareholders is based on information that has been provided to
Advanced Energy by the Shareholders in the Voting Agreements or by the Issuer.
Advanced Energy has not independently verified the truth or accuracy of such
information.
(c) Neither Advanced Energy nor, to the knowledge of Advanced
Energy, any person named in Schedule A to this statement has effected any
transaction in Issuer Stock during the past 60 days.
Page 6 of 15 Pages
<PAGE> 7
(d) To Advanced Energy's knowledge, based on representations made
by the Shareholders to Advanced Energy, the Shareholders have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Subject Shares set forth opposite their respective names
on Schedule B to this statement.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
To the knowledge of Advanced Energy, there are no contracts,
arrangements, understandings or relationships among the persons named in Item 2
or between any of such persons and any other person with respect to any
securities of the Issuer, other than the Agreement, the Voting Agreements and
the Affiliate Agreements.
Item 7. Materials to Be Filed as Exhibits
The following documents are filed as exhibits to this statement:
2.1 Agreement and Plan of Reorganization dated as of July 6, 2000,
by and among Advanced Energy, Merger Sub and the Issuer. *
3.1 Form of Voting Agreement by and between each of the
Shareholders and Advanced Energy. *
3.2 Form of Affiliate Agreement to be entered into by and between
each of the Affiliates and Advanced Energy.
----------
* Incorporated by reference to Advanced Energy's Registration Statement on
Form S-4, filed on August 14, 2000 (File No. 333-43744).
Page 7 of 15 Pages
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: September 14, 2000 Advanced Energy Industries, Inc.,
a Delaware corporation
By: /s/ Douglas S. Schatz
-------------------------------------
Title: Chief Executive Officer and
Chairman of the Board
Page 8 of 15 Pages
<PAGE> 9
SCHEDULE A
Directors and Executive Officers of Advanced Energy Industries, Inc.
<TABLE>
<CAPTION>
Name Title, Principal Occupation or Employment and Address
---- -----------------------------------------------------
<S> <C>
Douglas S. Schatz Chairman of the Board and Chief Executive Officer of
Advanced Energy Industries, Inc. The address of Advanced
Energy is 1625 Sharp Point Drive, Fort Collins, Colorado
80525.
Hollis L. Caswell President, Chief Operating Officer and Director of Advanced
Energy Industries, Inc. The address of Advanced Energy is
1625 Sharp Point Drive, Fort Collins, Colorado 80525.
Richard P. Beck Senior Vice President, Chief Financial Officer and Director
of Advanced Energy Industries, Inc. The address of Advanced
Energy is 1625 Sharp Point Drive, Fort Collins, Colorado
80525.
Richard A. Scholl Senior Vice President and Chief Technology Officer of
Advanced Energy Industries, Inc. The address of Advanced
Energy is 1625 Sharp Point Drive, Fort Collins, Colorado
80525.
James Gentilcore Senior Vice President of Advanced Energy Industries, Inc.
and President of Advanced Energy Voorhees, Inc., a wholly
owned subsidiary of Advanced Energy Industries, Inc. The
address of Advanced Energy Voorhees, Inc. is 1007 Laurel
Oaks Road, Voorhees, NJ 08043.
Joseph Monkowski Senior Vice President, Business Development of Advanced
Energy Industries, Inc. The address of Advanced Energy is
1625 Sharp Point Drive, Fort Collins, Colorado 80525.
G. Brent Backman Director of Advanced Energy Industries, Inc. The address of
Advanced Energy is 1625 Sharp Point Drive, Fort Collins,
Colorado 80525.
Trung T. Doan Director of Advanced Energy Industries, Inc. and Vice
President of Process Development of Micron Technology, Inc.,
a manufacturer of semiconductor memory solutions. The
address of Micron Technology is 8000 South Federal Way,
Boise, ID 83707-0006. Mr. Doan also is a director of
Engineering Measurements Company.
Arthur A. Noeth Director of Advanced Energy Industries, Inc. The address of
Advanced Energy is 1625 Sharp Point Drive, Fort Collins,
Colorado 80525.
</TABLE>
Page 9 of 15 Pages
<PAGE> 10
<TABLE>
<CAPTION>
Name Title, Principal Occupation or Employment and Address
---- -----------------------------------------------------
<S> <C>
Elwood Spedden Director of Advanced Energy Industries, Inc. Director
Spedden's address is 75075 Inverness Drive, Indian Wells,
CA 92210
Gerald Starek Director of Advanced Energy Industries, Inc. Director
Starek's address is 5604 Chelsea Avenue, La Jolla, CA 92037.
Arthur Zafiropoulo Director of Advanced Energy Industries, Inc. and Chief
Executive Officer of Ultratech Stepper, a manufacturer of
philolithography equipment used in the fabrication of
semiconductor devices and thin film heads. The address of
Ultratech Stepper is 3050 Zanker Road, San Jose, CA 95134.
</TABLE>
Page 10 of 15 Pages
<PAGE> 11
SCHEDULE B
Shareholders Party to Voting Agreements
<TABLE>
<CAPTION>
Shareholder Principal Occupation or Employment Number of Shares
----------- ---------------------------------- ----------------
<S> <C> <C>
Charles E. Miller Chief Executive Officer and Chairman of the Board 1,470,304
of Engineering Measurements Company. The address
of Engineering Measurements Company is 600
Diagonal Highway, Longmont, Colorado 80501.
William A. Ringer Director of Engineering Measurements Company. In 111,125
May 1999, Mr. Ringer retired from his position as
President of Granville-Phillips Company, a
supplier of equipment to semiconductor
manufacturers. Director Ringer's address is P.O.
Box 1018, Wilson, WY 83014.
Saied R. Hosseini Vice President of Sales of Engineering 64,250
Measurements Company. The address of Engineering
Measurements Company is 600 Diagonal Highway,
Longmont, Colorado 80501.
David S. Miller Mr. Miller is a stockbroker for General 426,250
Securities Corporation. Mr. Miller's business
address is 420 E. Armour, N. Kansas City, MO 64166.
Walter Kluck Director of Engineering Measurements Company and 4,292
Chief Executive Officer of Industrial
Representatives, Inc., a manufacturers
representative for industrial manufacturers,
including Engineering Measurements Company. The
address of Industrial Representatives is P.O. Box
421, Clifton, NJ 07015.
Thomas G. Miller Director of Engineering Measurements Company and 448,362
Chief Executive Officer of College Park Family
Care Center, a multi-specialty medical practice in
Overland, KS. The address of College Park Family
Care Center is 11725 W. 112th St., Overland Park,
KS 66210.
Trung T. Doan Director of Engineering Measurements Company and 10,000
Vice President of Process Development of Micron
Technology, Inc., a manufacturer of semiconductor
memory solutions. The address of Micron
Technology is 8000 South Federal Way, Boise, ID
83707-0006. Mr. Doan also is a director of
Advanced Energy Industries, Inc.
</TABLE>
Page 11 of 15 Pages
<PAGE> 12
Exhibit 3.2
ENGINEERING MEASUREMENTS COMPANY
FORM OF AFFILIATE AGREEMENT
_________, 2000
Advanced Energy Industries, Inc.
1625 Sharp Point Drive
Fort Collins, CO 80525
Ladies and Gentlemen:
This letter agreement (this "Agreement") is being delivered to you in
accordance with Section 6.8 of the Agreement and Plan of Reorganization, dated
as of July 6, 2000 (the "Merger Agreement"), by and between Engineering
Measurements Company, a Colorado corporation ("EMCO"), Flow Acquisition
Corporation, a Colorado corporation ("Merger Sub"), and Advanced Energy
Industries, Inc., a Delaware corporation ("AE"). The Merger Agreement provides,
among other things, that AE will issue shares of AE common stock to the holders
of EMCO common stock pursuant to the merger of Merger Sub with and into EMCO
(the "Merger"). EMCO will survive the Merger as a wholly owned subsidiary of AE.
1. The undersigned ("Shareholder") hereby represents, warrants, covenants
and agrees as follows:
(a) Shareholder understands that as of the date of this Agreement,
Shareholder may be deemed to be an "affiliate" of EMCO as such term is (i)
defined for purposes of paragraphs (c) and (d) of Rule 145 of the general rules
and regulations (the "Rules and Regulations") of the United States Securities
and Exchange Commission (the "Commission") under the United States Securities
Act of 1933, as amended (the "Act"), or (ii) used in and for purposes of
Accounting Series Releases 130 and 135, as amended, of the Commission (in either
such case, an "Affiliate").
(b) Shareholder shall not make any resale, transfer or other
disposition of AE common stock in violation of the Act or the Rules and
Regulations.
(c) Shareholder has carefully read this Agreement and the Merger
Agreement and has had an opportunity to discuss with his or her counsel or
counsel for EMCO the requirements of such documents and any other applicable
limitations upon Shareholder's ability to sell, transfer or otherwise dispose of
AE common stock.
(d) Shareholder has been advised that the issuance of AE common
stock to Shareholder pursuant to the Merger has been registered with the
Commission under the Act. Shareholder also has been advised that, because (i) at
the time the Merger is submitted to a vote of the shareholders of EMCO,
Shareholder may be deemed to be an Affiliate of EMCO and (ii) the distribution
by Shareholder of AE common stock has not been registered under the Act,
Shareholder may not offer to sell, sell, transfer or otherwise dispose of AE
common stock issued
Page 12 of 15 Pages
<PAGE> 13
to Shareholder in the Merger unless (x) such offer, sale, transfer or other
disposition has been registered under the Act or is made in conformity with Rule
145 under the Act, or (y) in the opinion of counsel reasonably acceptable to AE,
or pursuant to a "no-action" letter obtained by Shareholder from the Staff of
the Commission, such sale, transfer or other disposition is otherwise exempt
from registration under the Act.
(e) Shareholder understands that AE will give stop transfer
instructions to AE's transfer agent with respect to the AE common stock to be
issued to Shareholder in the Merger, that such AE common stock will be issued
only in certificated form and that such certificates, or any substitutions
therefor, may bear legends to the following effect (together "Legends"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933 APPLIES
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH SUCH RULE
145 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933." ("Legend 1")
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT DATED __________ 2000, BETWEEN THE HOLDER HEREOF AND ADVANCED
ENERGY INDUSTRIES, INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF ADVANCED ENERGY INDUSTRIES, INC." ("Legend 2")
(f) Shareholder also understands that unless the transfer by
Shareholder of Shareholder's AE common stock has been registered under the Act
or is a sale made in conformity with the provisions of Rule 145, AE reserves the
right to place a legend substantially to the following effect on the
certificates issued to any transferee:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FROM A
PERSON WHO RECEIVED THESE SECURITIES IN A TRANSACTION TO WHICH RULE 145
UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933." ("Transferee
Legend")
(g) It is understood and agreed that, at the request of the record
holder of the applicable certificate ("Holder"), AE will cause Legend 1 or the
Transferee Legend, as the case may be, to be removed by delivery of substitute
certificates without such legend, so long as Holder is not at the time an
Affiliate of AE and at least one of the following is applicable:
Page 13 of 15 Pages
<PAGE> 14
(i) Holder beneficially owns less than 1% of the AE common
stock then outstanding and provides a written undertaking, in form satisfactory
to AE and its legal counsel, that Holder (A) does not intend to acquire any
additional shares of AE common stock before the shares represented by the
certificate are sold and (B) will only sell the shares represented by the
certificate in "brokers' transactions" (within the meaning of Section 4(4) of
the Act) or in transactions directly with a "market maker" (as defined in
Section 3(a)(38) of the Exchange Act);
(ii) one year shall have elapsed from the date Shareholder
acquired the shares represented by the certificate and the provisions of Rule
145(d)(2) are then available to Holder;
(iii) two years shall have elapsed from the date
Shareholder acquired the shares represented by the certificate and Holder has
not been an Affiliate of AE at any time during the three months prior to the
date Holder requests removal of the legend; or
(iv) AE has received either (A) an opinion of counsel
reasonably acceptable to AE or (B) a copy of a "no-action" letter obtained by
Shareholder from the Staff of the Commission, in either case to the effect that
the restrictions imposed by Rule 145 under the Act do not at that time apply to
Holder.
(h) It is understood and agreed that, at Shareholder's request, AE
will cause Legend 2 to be removed from the certificates by delivery of
substitute certificates without such legend, so long as (A) the requirements of
Paragraph 1(g) have been met, and (B) the Combined Financial Results Report (as
defined below) has been publicly released by AE.
2. Shareholder understands that implementation of the Merger will be
accounted for using the "pooling-of-interests" method and that such treatment
for financial accounting purposes is dependent upon the accuracy of certain of
the representations and warranties, and the compliance by Shareholder with
certain of the covenants and agreements, set forth herein. Accordingly,
Shareholder further hereby represents and covenants that Shareholder (a) has not
since June 6, 2000, sold transferred or otherwise disposed of, or reduced its
risk with respect to any EMCO shares (except pursuant to the Merger) and (b)
will not sell, transfer or otherwise dispose of, or reduce its risk with respect
to any EMCO shares (except pursuant to the Merger) or any AE common stock issued
to Shareholder in the Merger, in each case until after AE shall have publicly
released a report (the "Combined Financial Results Report") that includes the
combined financial results of AE and EMCO for a period of at least 30 days of
combined operations of AE and EMCO. Shareholder understands that stop transfer
instructions may be given to the transfer agent of AE in order to prevent any
breach of the covenants and agreements made by Shareholder in this Section 2,
although such stop transfer instructions will be rescinded upon the publication
of the Combined Financial Report.
3. Shareholder further understands and agrees that the representations,
warranties, covenants and agreements of Shareholder set forth herein are for the
benefit of AE and EMCO and will be relied upon by such entities and their
respective counsel and accountants.
Page 14 of 15 Pages
<PAGE> 15
4. This Agreement will be binding upon and enforceable against
administrators, executors, representatives, heirs, legatees and devisees of
Shareholder and any pledgees holding EMCO shares or AE common stock issued to
Shareholder in the Merger as collateral. If the Merger Agreement is terminated
in accordance with its terms prior to completion of the Merger, this Agreement
will thereupon automatically be terminated.
Execution of this letter should not be considered an admission on the
Shareholder's part that it is an Affiliate of EMCO as described in Section 1(a)
of this Agreement.
Very truly yours,
----------------------------------------
Name:
Address:
Agreed to and accepted:
ADVANCED ENERGY INDUSTRIES, INC.
BY:
---------------------------------------
Name:
Title:
Page 15 of 15 Pages
