<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
COHU, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
COHU, INC.
5755 KEARNY VILLA RD.
SAN DIEGO, CALIFORNIA 92123
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO OUR STOCKHOLDERS:
The annual meeting of stockholders of COHU, INC. (the "Company") will be
held at the offices of the Company, 5755 Kearny Villa Road, San Diego,
California 92123 on Tuesday May 2, 1995, at 2:00 P.M. local time, for the
following purposes:
1. To elect two Directors, each for a term of three years; and
2. To adopt the Cohu, Inc. 1994 Employee Stock Option Plan; and
3. To act upon such other matters as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record of the Company at the close of business on
March 3, 1995 will be entitled to vote at the meeting.
Since the holders of a majority of the outstanding shares of voting stock
of the Company entitled to vote at the meeting must be represented to
constitute a quorum, all stockholders are urged either to attend the meeting in
person or to vote by proxy.
Please sign, date and return the enclosed proxy in the envelope enclosed
for your convenience. If you attend the meeting you may revoke your proxy and
vote in person, and if you otherwise desire to revoke your proxy you may do so
by delivering a written notice to the Secretary of the Company, or by
submitting another duly signed proxy bearing a later date.
By Order of the Board of Directors,
/s/ Charles A. Schwan
-----------------------------------
Charles A. Schwan
Secretary
San Diego, California
March 30, 1995
THIS IS A REQUEST FROM THE BOARD OF DIRECTORS OF YOUR COMPANY FOR
YOUR PROXY. WE ASK THAT YOU SIGN AND MAIL IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE.
<PAGE> 3
COHU, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Cohu, Inc. (the "Company") of your Proxy for use at
the Annual Meeting of Stockholders on May 2, 1995, at 5755 Kearny Villa Road,
San Diego, California 92123 (the "Meeting"). This Proxy Statement and the
accompanying Proxy are being mailed to all stockholders on or about March 30,
1995. Any stockholder may revoke a proxy at any time prior to its exercise by
filing a later dated proxy or written notice of revocation with the Company's
Secretary or by voting in person at the Annual Meeting.
On March 3, 1995, the record date fixed by the Board of Directors (the
"Record Date"), the Company had outstanding 4,460,067 shares of Common Stock.
Stockholders have one vote for each share on all business of the Meeting.
Stockholders are entitled to cast one vote for each share held of record. In
the election of directors, stockholders may, under certain circumstances,
cumulate their votes, giving one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which
the stockholder's shares are normally entitled, or distribute the stockholder's
votes on the same principle among as many candidates as the stockholder thinks
fit.
A complete list of the stockholders of record entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder, and the number of shares registered in the name of each
stockholder, will be kept open at the office of the Company, 5755 Kearny Villa
Road, San Diego, California 92123, for the examination of any stockholder
during business hours for a period of ten (10) days immediately prior to the
Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below are the names of stockholders who on the Record Date (to
the best of the Company's knowledge) were beneficial holders of 5% or more of
the outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
Amount & Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class
---------------------------- ---------------------- ----------------
<S> <C> <C>
Fidelity Management and Research Corporation 477,700 10.71%
82 Devonshire Street
Boston, MA 02109
Investors Counselors of Maryland, Inc. 309,300 6.93%
803 Cathedral Street
Baltimore, MD 21201
Nicholas J. Cedrone 297,726 6.68%
301 Second Avenue
Waltham, MA 02154
Kennedy Capital Management, Inc. 240,000 5.38%
425 North New Ballas Road
St. Louis, MO 63141
</TABLE>
1
<PAGE> 4
ELECTION OF DIRECTORS
The Certificate of Incorporation classifies the directors of the Company
into three groups whose terms expire at different times. One class of
directors is elected at each annual meeting with the remaining directors
continuing in office. At the 1995 Annual Meeting of Stockholders, two
directors are to be elected for a term of three years. It is intended that the
shares represented by proxies in the accompanying form will be voted by the
proxy holders for the election of the two nominees named below. In the event
the election of directors is to be by cumulative voting, the proxy holders will
vote the shares represented by proxies in such proportions as the proxy holders
see fit. Should any nominee decline or become unable to accept nomination or
election, which is not anticipated, the proxies will be voted for such
substitute nominee as may be designated by a majority of the Board of
Directors. THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE TWO NOMINEES.
NOMINEES FOR TERMS EXPIRING IN 1998 - CLASS 1
<TABLE>
<CAPTION>
Shares of Common Percentage of
Name and Director Stock Beneficially Outstanding
Business Address Age Principal Occupation Since Owned Shares
------------------------ --- ----------------------------- ----- ------------------ -------------
<S> <C> <C> <C> <C> <C>
James W. Barnes 65 President and Chief Executive 1983 117,248* 2.63%
5755 Kearny Villa Rd. Officer of the Company
San Diego, CA
William S. Ivans 74 Chairman of the Board of the 1960 98,076 2.20%
807 La Jolla Rancho Rd. Company since February 1983
La Jolla, CA
</TABLE>
INFORMATION CONCERNING OTHER DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE IN 1996 - CLASS 2
<TABLE>
<CAPTION>
Shares of Common Percentage of
Name and Director Stock Beneficially Outstanding
Business Address Age Principal Occupation Since Owned Shares
------------------------ --- --------------------------------- -------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
Charles A. Schwan 55 Vice President, Finance since 1990 65,930** 1.48%
5755 Kearny Villa Rd. 1983; Secretary of the Company
San Diego, CA since 1988
Gene E. Leary 74 Retired accounting and data 1976 5,000 (1)
1657 Calle de Cinco processing executive at
La Jolla, CA Honeywell, Inc. and Control
Data Corp.
</TABLE>
* Includes options to purchase 26,664 shares exercisable within 60 days from
March 30, 1995.
** Includes options to purchase 13,332 shares exercisable within 60 days from
March 30, 1995.
2
<PAGE> 5
DIRECTORS WHOSE TERMS EXPIRE IN 1997 - CLASS 3
<TABLE>
<CAPTION>
Shares of Common Percentage of
Name and Director Stock Beneficially Outstanding
Business Address Age Principal Occupation Since Owned Shares
------------------------ --- --------------------------------- -------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
Frank W. Davis 80 Retired aerospace executive; 1976 10,000 (1)
939 Coast Blvd. former President of Convair
La Jolla, CA Aerospace Division of
General Dynamics
Harry L. Casari, CPA 58 Retired partner, Ernst & Young LLP 1995 200 (1)
1963 Hacienda Circle
El Cajon, CA
</TABLE>
The total shares owned by all officers and directors as a group are 296,454, or
6.65% of the outstanding shares.
(1) Less than 1%
BOARD OF DIRECTORS AND COMMITTEES
The Board had eight meetings during the last fiscal year.
ORGANIZATION OF THE BOARD OF DIRECTORS
The Board of Directors has established two standing committees: the Audit
committee and the Executive Compensation Committee.
The Audit Committee, composed of Messrs. Leary, Charles L. Blake and Davis,
(Mr. Blake retired as a director in 1995) is the principal link between the
board and the Company's internal and independent auditors, and monitors
internal audit and control procedures. The Audit Committee held 2 meetings
last year.
The Executive Compensation Committee, consisting of Messrs. Davis, Blake,
and Leary, recommends the compensation structure to the Board of Directors for
the Officers of the Company and each subsidiary. In addition, this Committee
has the responsibility for administration of the Company's stock option and
incentive plans. The Executive Compensation Committee held 2 meetings last
year.
DIRECTORS' COMPENSATION
Outside Directors receive (a) an annual retainer of $8,500; (b) $500 per
meeting attended in person to a maximum of $2,500 annually; and (c) $1,000
annually for membership on one or more active committees.
3
<PAGE> 6
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's Chief
Executive Officer and the other executive officer whose aggregate cash
compensation exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Annual ---------------
Compensation Securities
----------------------- Underlying All Other
Name and Principal Position Year Salary Bonus (1) Options (#) Compensation (2)
--------------------------- ---- ---------- --------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
J.W. Barnes 1994 $228,460 $184,710 40,000 $14,912
President and Chief Executive 1993 214,231 157,810 40,000 8,994
Officer since 1983 1992 199,346 104,200 - 8,728
C.A. Schwan 1994 185,500 137,236 20,000 11,159
Vice President-Finance since 1993 163,750 110,980 20,000 8,994
1983; Secretary since 1988 1992 154,865 72,680 - 7,836
</TABLE>
(1) The amounts shown in this column reflect payments under the Company's
Incentive Bonus Plan for key executives.
(2) The amounts shown in this column reflect Company contributions to the
Employee Retirement Plan and the Executive Deferred Compensation Plan.
INCENTIVE BONUS PLAN. The Company has an incentive bonus plan for key
executives, originally adopted in 1978, and continuing in effect for the
present fiscal year upon recommendation of the Executive Compensation Committee
of the Board. Under the plan, corporate officers may receive incentive
compensation based on overall corporate earnings performance, and the principal
executive of each division and subsidiary may receive incentive compensation
based upon earnings performance of the operations they manage. In each case,
the incentive compensation is determined with reference to a pre-tax earnings
"target" fixed by the Board, or in the case of divisions and subsidiaries, by
the corporate management.
RETIREMENT PLAN. The Cohu Employee's Retirement Plan was implemented on
January 1, 1978. All full time employees who are at least 21 years of age are
eligible to enroll in this Plan. The participant may contribute up to 11% of
his or her monthly compensation. The Company matches 4% dollar for dollar up
to a maximum of $6,000 on earnings of $150,000 per year. The amounts
contributed by the Company are vested 10% after one year of participation,
another 10% after 2 years, and an additional 20% each year thereafter to the
full 100%. None of the contributions nor the accumulated interest is taxable
to the participant until withdrawn. The maximum which a participant may
contribute is $9,240 annually.
EXECUTIVE DEFERRED COMPENSATION PLAN. The Company adopted an executive
deferred compensation plan in 1994. Under the plan, corporate officers and the
principal executives of each division and subsidiary may elect to defer a
portion of their current compensation. The Company will then match dollar for
dollar up to 4% of the executive's earnings in excess of $150,000 per year.
These combined funds may be used by the Company to purchase a specifically
designed life insurance policy on the executive's life. The Company is not
entitled to a corporate tax deduction until the year in which the executive
recognizes taxable income in connection with the plan. However, this plan is
designed to compensate the Company for the present value of the deferred tax
deduction. Upon the executive's termination of employment, the Company
reserves in any policy for that executive an amount which is actuarially
sufficient to provide a death benefit equal to the present value of the
Company's deferred tax deduction. The remaining cash value of the policy is
available for borrowing by the Company for payment to the executive in
accordance with a schedule determined in the sole discretion of the Company.
Upon the executive' death, any policy proceeds will be paid to the Company.
Then the executive's beneficiaries will receive from the Company the amount of
the net proceeds (after repayment of all borrowings by the Company), reduced by
the present value of any tax deduction deferred by the Company and increased by
the value of the Company's tax deduction available as a result of the payment
of the net proceeds.
4
<PAGE> 7
TERMINATION AGREEMENTS
The Company has entered into Termination Agreements with Mr. Barnes and Mr.
Schwan under which those executives would be entitled to a payment in the event
of a termination of employment for specified reasons following a change of
control of the Company. For this purpose, a change of control of the Company
means a merger or consolidation of the Company (except with a wholly owned
subsidiary), a sale by the Company of all or substantially all of its assets,
the acquisition of beneficial ownership of a majority of the outstanding voting
stock of the Company by any person, entity or affiliated group or a change in
the identities of a majority of the directors of the Company within a period of
thirty (30) months resulting in whole or in part from the election of persons
who were not management nominees. Termination of employment for purposes of
the agreement means a discharge of the executive by the Company, other than one
for specified causes, including death, disability, wrongful acts, habitual
intoxication, habitual neglect of duties or normal retirement. It also
includes resignation following the occurrence of an adverse change in the
executive's position, duties, compensation or work conditions. The amounts
payable under the agreement will change from year to year based on the
executive's compensation. In the event of a termination in 1995 and following
a change of control, the amounts payable to Mr. Barnes and Mr. Schwan,
respectively, would be $953,379 and $628,887.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on grants of options to purchase the
Company's Common Stock made to the Named Executive Officers during the year
ended December 31, 1994.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------------
Number of
Securities Percent of Potential Realizable Value
Underlying Total Options at Assumed Annual Rates of
Options Granted Exercise or Stock Price Appreciation
Granted to Employees Base Price Expiration for Option Term (2)
Name (#) (1) in Fiscal Year ($/Sh) Date 5%($) 10%($)
------------ ------------ ------------ -------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
J.W. Barnes 40,000 16.3% $16.13 7/21/04 $405,830 $1,028,448
C.A. Schwan 20,000 8.2% 16.13 7/21/04 202,915 514,224
</TABLE>
(1) Consists of stock options, which were granted at an exercise price of 100%
of the market price of the underlying shares on the date of grant, become
exercisable over four years at the rate of approximately one- fourth each
year and expire ten years from the date of grant. The options were granted
under the Company's 1994 Employee Stock Option Plan and are therefore
subject to shareholder approval of the plan at the Annual Meeting. See
"Approval of the Cohu, Inc. 1994 Stock Option Plan".
(2) The 5% and 10% assumed annual rates of stock price appreciation would result
from per share prices of $26.28 and $41.84 respectively. Such assumed rates
are mandated by rules of the Securities and Exchange Commission and do not
represent the Company's forecast of possible future appreciation of the
Company's Common Stock or total stockholder return.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1994 by the
Named Executive Officers and the value of such officers' unexercised options at
December 31, 1994. The options were granted under the Company's 1994 Employee
Stock Option Plan and are therefore subject to shareholder approval of the plan
at the Annual Meeting. See "Approval of the Cohu, Inc. 1994 Stock Option Plan.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options In-the-Money Options
Acquired Value at Fiscal Year-End (#) at Fiscal Year-End ($) (1)
on Exercise Realized ---------------------------- --------------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
------------- ---------- ------------ ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.W. Barnes 15,000 195,938 28,667 66,667 384,056 449,736
C.A. Schwan 2,000 26,125 22,666 33,334 347,768 224,872
</TABLE>
(1) Calculated on the basis of the fair market value of the Company's Common
Stock on the exercise date or at December 31, 1994, minus the aggregate
exercise price. The closing price of the Company's Common Stock on December
31, 1994 on NASDAQ was $22.50.
5
<PAGE> 8
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
generally determines base salary levels for executive level positions prior to
the annual stockholders meeting in May. Target incentives for executive level
positions are determined at or about the start of the fiscal year and actual
bonuses are approved after the end of the fiscal year based upon Company
performance. The process involved in the executive compensation determination
for fiscal 1994 is summarized below.:
- In April 1994, the Company's chief executive officer developed executive
compensation data from a nationally recognized survey for a group of
similarly sized high technology companies. The Company's chief
financial officer's position as well as the principal executives of each
division and subsidiary were matched to comparable survey positions and
competitive market compensation levels were determined for base salary.
This data was provided to the committee, along with performance
evaluations and salary recommendations
- In May 1994, the chief executive officer reviewed the competitive market
data with the Committee for each executive level position and the
responsibility level of each position, together with the individual's
performance for the last fiscal year and objectives for fiscal 1994.
The Company's performance was compared to objectives for the last fiscal
year and performance targets for fiscal 1994 were also reviewed.
- The Committee reviewed the recommendations, performance evaluations and
survey data outlined above. After discussion, the Committee approved a
base salary level to be effective May 1, 1994, for each executive level
position other than the chief executive officer. The Committee reviewed
the salary of the chief executive officer and compared it to those in
peer positions in companies of similar size and performance. Given this
review, the Committee determined that effective May 1, 1994, it was
appropriate to increase the chief executive officer's base salary to a
level more consistent with the base salaries of other chief executive
officers of similarly sized high technology companies.
- Incentives for executive level positions are determined according to the
Company's Incentive Bonus Plan (the "Incentive Plan"), based upon
Company performance. In general, the Incentive Plan performance target
objectives must be achieved before any bonuses may be paid to
participants.
- In February 1995, the Committee reviewed and approved incentive awards
for 1994 for all eligible participants in the Company's Incentive Plan.
The bonus was based upon actual Company performance compared to the
target which followed the process and formula outlined in the Incentive
Plan. Based on the Company's year-end financial results, the threshold
performance levels of both the earnings and revenue objectives were
exceeded.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:
Frank W. Davis Charles L. Blake Gene E. Leary
6
<PAGE> 9
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the Amex Market Index and a Peer Group Index over the same
period (assuming the investment of $100 in the Company's Common Stock, Peer
Group Index and NASDAQ Market Index on January 1, 1990, and reinvestment of all
dividends).
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
---------------------------------------------------
Company 1989 1990 1991 1992 1993 1994
------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Cohu, Inc. 100 111.10 136.14 151.45 435.25 518.57
MS Group Index 100 97.26 121.17 160.54 231.31 256.74
NASDAQ Market Index 100 81.12 104.14 105.16 126.14 132.44
</TABLE>
The Peer Group Index set forth on the Performance Graph is the index for Media
General Industry Group 171, Electronic Equipment Manufacturers.
7
<PAGE> 10
APPROVAL OF THE COHU, INC. 1994 STOCK OPTION PLAN
The Board has approved and recommended for adoption the 1994 Stock Option
Plan (the "1994 Plan"). The affirmative vote of the holders of a majority of
the outstanding shares of Common Stock voting in person or by proxy at the
meeting (provided a quorum is present) will be required to approve the adoption
of the 1994 Plan. A copy of the 1994 Plan is attached to this Proxy Statement
as Exhibit A and stockholders are encouraged to review the plan in its
entirety. Any discrepancy between the language of the 1994 Plan and the
summary provided herein shall be resolved in favor of the plan language.
PURPOSE
The 1994 Plan was adopted by the Board of Directors to make available
additional shares of stock to enable selected officers, directors (who are also
employees) and employees to purchase the Common Stock of the Company, which
will assist the Company in retaining the services of employees holding key
positions with the Company and attracting new employees capable of filling key
positions with the Company, and to provide an incentive for such employees.
All but 2,000 shares of Common Stock of the Company reserved for issuance
pursuant to prior stock option plans (the most recent of which was adopted in
1988) have been granted as of the date of this proxy statement.
ADMINISTRATION
The 1994 Plan will be administered by the Cohu, Inc. Executive
Compensation Committee (the "Committee"). In order to exempt the grant of
options to executive officers from the reporting requirements and short swing
profit liability imposed by Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), each of the members of the Committee must be
"disinterested" (within the meaning of Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act). The Committee will have final
power to construe and interpret the 1994 Plan and to grant options thereunder,
and to determine all questions that may arise in the administration of the 1994
Plan. The Committee has been authorized by the Board to determine the persons
to whom and the dates on which options will be granted, the number of shares to
be subject thereto, the time or times during the term of each option within
which all or a portion of such option may be exercised, and all other terms of
the options. The Committee shall have the right to adopt, amend, and repeal
rules and regulations concerning the administration of the 1994 Plan.
TERM, AMENDMENT AND TERMINATION
The Board or the Committee may suspend or terminate the 1994 Plan at any
time. The term of the 1994 Plan shall commence on the date of its approval by
the Board, provided that the 1994 Plan is approved by a majority of the
stockholders of the Company within one (1) year thereafter. Unless sooner
terminated by the Committee, the term of the 1994 Plan shall be for ten (10)
years from the commencement date. Termination of the 1994 Plan shall not
affect any rights previously granted thereunder. The Committee may terminate,
modify or amend the 1994 Plan from time to time, provided that the affirmative
vote of the holders of a majority of the outstanding shares of the Company
would be required with respect to any amendment which would (1) increase the
number of shares of Common Stock reserved for issuance upon exercise of options
pursuant to the 1994 Plan; (2) materially modify the requirements relating to
eligibility for participation in the 1994 Plan; or (3) change any provision of
the 1994 Plan in a manner that would materially increase the benefits accruing
to participants thereunder.
ELIGIBILITY
Stock Options may be granted only to employees (including officers and
directors who are also employees) of the Corporation or its parent or
subsidiaries or to individuals who are rendering services as consultants,
advisors, or other independent contractors to the Corporation or its parent or
subsidiaries.
No incentive stock option may be granted to a person who, at the time of
the grant, owns, directly or indirectly, stock constituting more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company entitled to vote or of any parent or subsidiary thereof, unless the
exercise price of the stock subject to the option is at least one hundred and
ten percent (110%) of the fair market value of such stock on the date the
option is granted and the term of the option does not exceed five (5) years
from the date of grant.
8
<PAGE> 11
SHARES RESERVED FOR ISSUANCE
A total of 220,000 shares of the $1.00 par value Common Stock of the
Company shall be reserved for issuance pursuant to the 1994 Plan, subject to
adjustment in the event of stock dividends, splits, subdivisions or
combinations. Subject to shareholder approval of the 1994 Plan, the Committee
has granted options under the 1994 Plan for an aggregate of 60,000 shares to
Messrs. Barnes and Schwan and 115,000 for all other employees as a group. See
"Option Grants in Last Fiscal Year".
TERMS OF OPTIONS
Set forth below is a description of terms of options granted pursuant to
the 1994 Plan, provided, however, that individual option grants in any
particular case may be more restrictive as to any or all of the terms described
below.
a. PRICE. The purchase price per share deliverable upon the exercise of
an incentive stock option shall not be less than the fair market value of a
share on the date of grant. The purchase price per share deliverable upon the
exercise of an incentive stock option granted to a person, who at the time of
grant, owns directly or indirectly, stock constituting more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
entitled to vote (or a parent or subsidiary thereof), must be at least one
hundred and ten percent (110%) of the fair market value of such stock on the
date the option was granted. The purchase price per share deliverable upon the
exercise of a nonqualified stock option shall be determined by the Committee in
its sole discretion. The exercise price of options granted under the 1994 Plan
may be paid either (i) in cash at the time the option is exercised, or (ii) at
the discretion of the Committee, by delivery to the Company of other Common
Stock of the Company owned by the optionee.
b. OPTION EXERCISE. A stock option may be exercisable, in part or in
full, at any time and from time to time six months after the date of grant and
during an exercise period, and may be subject to such performance criteria, and
conditions as shall be determined by the Committee on a case-by-case basis and
such exercise period and restrictions shall be described in the agreement
evidencing the stock option. The exercise period applicable to any incentive
stock option shall not exceed ten (10) years from the date of grant and in
certain circumstances may not exceed five (5) years, as described above. The
Committee may accelerate the times at which a stock option may be exercised.
c. NONASSIGNABILITY. No option may be transferred by an optionee other
than by will or by the laws of descent and distribution. During the lifetime
of an optionee, an option may be exercised only by the optionee.
d. EXPIRATION FOLLOWING TERMINATION OF EMPLOYMENT. Under the 1994 Plan,
an option will terminate immediately upon the optionee ceasing to be employed
by the Company or a parent or subsidiary thereof, unless the option by its
terms specifically provides otherwise. If termination is due to disability of
the optionee, the optionee or his or her legal representative will have no more
than three (3) months from the date of disability to exercise the option. If
the termination is due to the death of the optionee, his or her legal
representatives will have no more than one (1) year from the date of death to
exercise the option, to the extent such option was exercisable on the date of
death.
ADJUSTMENT PROVISIONS
If there is a change in the Common Stock subject to the 1994 Plan through
recapitalization, stock dividend, stock split, combination or otherwise, the
Committee may make appropriate adjustments to the maximum number of shares
subject to the 1994 Plan and shall make appropriate adjustments to the price
per share of stock subject to the 1994 Plan and to any outstanding options
thereunder.
REORGANIZATION
A Reorganization shall be deemed to have occurred when the Company and/or
its stockholders enter into an agreement to dispose of all or substantially all
of the assets of the Company or an amount of the outstanding stock of the
Company sufficient to constitute effective control of the Company by means of a
sale, merger, reorganization, separation, liquidation or any other transaction.
In the event of a Reorganization, the "Acquiring Corporation" may assume the
Corporation's rights and obligations under outstanding Stock Options or
substitute options for the Acquiring Corporation's stock for such outstanding
Stock Options. In the event the Acquiring Corporation elects not to assume or
substitute for such outstanding Stock Options in connection with the
Reorganization, any unexercisable and/or unvested portion of the outstanding
Stock Options shall be immediately exercisable and vested as of the date thirty
(30) days prior to the date of the Reorganization. Any Stock Options which are
neither
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<PAGE> 12
assumed or substituted for by the Acquiring Corporation in connection with the
Reorganization nor exercised as of the date of the Reorganization shall
terminate and cease to be outstanding effective as of the date of the
Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
The Company may deduct from amounts otherwise due an optionee under a
stock option or from any wages or other compensation payable to such optionee
any sums required by federal, state or local tax to be withheld with respect to
the exercise or disposition of any option or other right, or require the
optionee to pay such sums as a condition of the issuance of shares. The 1994
Plan is not qualified under Internal Revenue Code Section 401(a) and is not
subject to the provisions of the Employee Retirement Income Security Act of
1974.
The grant of a nonqualified stock option will not result in taxable income
to the optionee at the time of grant, and ordinary income will be realized by
an optionee at the time of exercise of a nonqualified option in the amount by
which the fair market value of the Common Stock on the date of exercise exceeds
the exercise price. The Company will be entitled to a deduction from income
for federal income tax purposes in amount equal to the ordinary income
recognized by the optionee in such case. Any subsequent disposition of the
shares acquired pursuant to a nonqualified option will result in gain or loss
to the optionee in an amount equal to the difference between the sale price and
the market price at date of exercise.
With respect to incentive stock options, the excess of the fair market
value of stock received upon exercise over the exercise price is taken into
account for purposes of the alternative minimum tax described under Section 55
of the Internal Revenue Code of 1986, as amended (the "Code"). Otherwise,
there are generally no tax consequences to either the Company or an optionee
connected with the grant or the exercise of an incentive stock option. If the
stock acquired under an incentive stock option is not disposed of within two
(2) years from the date of grant nor within one (1) year from the date of
exercise, any gain on the sale thereof will generally be treated as long term
capital gain to the optionee, with no tax consequences to the Company. If the
stock is sold prior to such time, the optionee will recognize at the time of
sale ordinary income equal to the lesser of the gain on the sale or the
difference between the option price and the fair market value of the stock on
the date of exercise, and any additional gain will be long term or short term
capital gain, depending upon the holding period. The Company may have a tax
deduction equal to the ordinary income recognized by the optionee.
BOARD RECOMMENDS APPROVAL
The Board of Directors has adopted and recommends that the stockholders
approve the 1994 Plan. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
THE COMPANY'S OUTSTANDING COMMON STOCK VOTING IN PERSON OR BY PROXY AT THE
MEETING (PROVIDED A QUORUM IS PRESENT) IS REQUIRED TO APPROVE THE 1994 PLAN.
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<PAGE> 13
INDEPENDENT AUDITORS
Ernst & Young LLP served as the Company's auditors continuously since
1957. A representative of Ernst & Young LLP will be present at the
stockholders' meeting and be available for appropriate questions, and may make
a statement if he desires to do so.
OTHER MATTERS
The Board of Directors is unaware of any other business to be presented
for consideration at the stockholders' meeting. If, however, such other
business should properly come before the meeting, the proxies will be voted in
accordance with the best judgment of the proxy holders. The shares represented
by proxies received in time for the meeting will be voted, and if any choice
has been specified the vote will be in accordance with such specification.
All stockholder proposals must be submitted to the Secretary of the
Company no later than November 30, 1995 in order to be considered for inclusion
in the Company's 1996 proxy materials.
THIS SOLICITATION IS MADE BY THE BOARD OF DIRECTORS OF THE COMPANY.
Proxies will be solicited by mail and may be solicited in person or by
telephone or telegraph. Directors and officers may engage in such
solicitation. The Company has retained Georgeson & Co. in New York to aid in
the solicitation of proxies at an anticipated cost of $6,000, including
expenses. The Company will bear the entire cost of the solicitation.
The Board of Directors invites you to attend the meeting in person.
However, if you are unable to do so, please sign, date and return the enclosed
proxy promptly.
By Order of the Board of Directors
/s/ Charles A. Schwan
__________________________________
Charles A. Schwan
Secretary
San Diego, California
March 30, 1995
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<PAGE> 14
EXHIBIT A
COHU, INC.
1994 STOCK OPTION PLAN
The Cohu, Inc. 1994 Stock Option Plan is hereby adopted for the benefit
of officers, directors (who are also employees), service providers and key
employees of Cohu, Inc., a Delaware corporation and its parent or subsidiaries,
if any.
1. Purpose. The purpose of the Plan is to advance the growth and
prosperity of the Corporation and its stockholders by providing to officers,
directors, service providers and key employees of the Corporation an incentive
to serve the Corporation. By encouraging and enabling such persons to become
owners of capital stock of the Corporation, the Corporation seeks to attract
and retain persons of training, experience and ability and to furnish
additional incentives to those persons upon whose judgment, initiative and
efforts the successful conduct of the Corporation's business depends. It is
the intention of the Corporation that this objective will be accomplished
through the granting of incentive stock options and nonqualified stock options
to certain officers, directors, service providers and key employees of the
Corporation.
2. Definitions. As used herein, the following terms shall have the
corresponding meanings.
2.1 "Committee" shall mean the Cohu, Inc. Executive Compensation
Committee, appointed by the Board of Directors of the Corporation. If no such
Committee is appointed, the entire Board of Directors of the Corporation shall
be deemed to constitute the Committee.
2.2 "Corporation" shall mean Cohu, Inc. and any successor
corporation thereto and/or its parent or subsidiaries, if any, as the context
requires. The terms "parent" and "subsidiary" shall mean any existing or
future corporation which would be a parent or subsidiary corporation of the
Corporation, as those terms are defined in Section 424 of the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations promulgated thereunder
(the "Code").
2.3 "Date of Grant" shall mean the date of grant of a Stock Option
granted hereunder as set forth in the Stock Option Agreement. In the event of
a grant conditioned, among other things, upon stockholder ratification of this
Plan, the date of such conditional grant shall be the Date of Grant for
purposes of this Plan.
2.4 "Employee" shall mean any common-law employee of the
Corporation. The determination of whether or not a person is an Employee of
the Corporation with respect to the grant or exercise of an Incentive Stock
Option shall be made in accordance with the rule of Income Tax Regulation
Section 1.421-7(h) (or successor regulation).
2.5 "Fair Market Value" shall mean, with respect to the exercise
of an option under the Plan, (a) if the Common Stock is listed on a national
securities exchange, the closing price of the Common Stock for the business day
immediately preceding the day for which the determination is being made, or (b)
if the Common Stock is not then listed on an exchange, the average of the
closing bid and asked prices per share for the Common Stock in the
over-the-counter market as quoted on NASDAQ for the business day immediately
preceding the day for which the determination is being made, or (c) if the
Common Stock is not then listed on any exchange or quoted on NASDAQ, an amount
determined in good faith by the Board of Directors to be the fair market value
of the Common Stock, after consideration of all relevant factors.
2.6 "Holder" shall mean any person entitled to exercise a Stock
Option pursuant to the terms of the Plan, provided that no director who is not
also an Employee may be a Holder.
2.7 "Incentive Stock Option" shall mean a Stock Option which is
intended to qualify for tax treatment as an incentive stock option under
Section 422 of the Code. An Incentive Stock Option may only be granted to an
Employee.
2.8 "Nonqualified Stock Option" shall mean a Stock Option which is
not intended to qualify for tax treatment as an Incentive Stock Option under
Section 422 of the Code.
2.9 "Plan" shall mean the Cohu, Inc. 1994 Stock Option Plan, as
herein adopted and as may be amended from time to time.
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<PAGE> 15
2.10 "Purchase Price" shall mean the price paid for Shares upon the
exercise of a Stock Option granted hereunder.
2.11 "Shares" shall mean those shares of Common Stock of the
Corporation which are available for issuance pursuant to the terms of the Plan.
2.12 "Stock Option" shall mean a stock option giving a Holder the
right to purchase Shares. A Stock Option may be an Incentive Stock Option or a
Nonqualified Stock Option.
3. Term. All Stock Options shall be granted, if at all, within ten (10)
years from the earlier of the date the Plan is adopted by the Board of
Directors of the Corporation and the date the Plan is duly approved by the
stockholders of the Corporation.
4. Eligibility. Stock Options may be granted only to employees
(including officers and directors who are also employees) of the Corporation or
its parent or subsidiaries or to individuals who are rendering services as
consultants, advisors, or other independent contractors to the Corporation or
its parent or subsidiaries. For purposes of the foregoing sentence,
"employees" shall include prospective employees to whom Stock Options are
granted in connection with written offers of employment with the Corporation or
its parent or subsidiaries and "consultants" or "advisors" shall include
prospective consultants or advisors to whom Stock Options are granted in
connection with written consulting or advising offers with the Corporation or
its parent or subsidiaries. The Committee shall, in the Committee's sole
discretion, determine which persons shall be granted Stock Options. An
individual who is rendering services as a consultant, advisor, or other
independent contractor or who is a prospective employee, consultant or advisor
shall be eligible to be granted only a Nonqualified Stock Option. A Holder
may, if otherwise eligible, be granted more than one Stock Option.
5. Shares of Stock Subject to the Plan. Subject to the adjustments set
forth in the Plan, the Shares which may be issued pursuant to the Plan shall
not exceed in the aggregate 220,000 shares of the Corporation's Common Stock,
$1.00 par value. Such Shares shall be authorized and unissued shares. Any
Shares subject to a Stock Option granted under this Plan which for any reason
expires or is terminated unexercised and/or Shares subject to repurchase which
are repurchased by the Corporation shall again be subject to and be available
for issuance pursuant to the terms of this Plan. Notwithstanding the
foregoing, any such shares shall be made subject to a new Stock Option only if
the grant of such new Stock Option and the issuance of such shares pursuant to
such new Stock Option would not cause the Plan or any Stock Option granted
under the Plan to contravene Rule 16b-3, as promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as amended from time
to time or any successor rule or regulation ("Rule 16b-3").
6. Administration of the Plan. Within the limitations described herein,
the Committee shall administer the Plan, select the officers, directors,
service providers and Employees of the Corporation to whom Stock Options shall
be granted, determine the number of Shares to be subject to each grant,
determine the method of payment upon exercise of each Stock Option, determine
all other terms of Stock Options granted hereunder and interpret, construe and
implement the provisions of the Plan. By the adoption of this Plan, the
Board of Directors of the Corporation is delegating to the Committee plenary
authority to administer the Plan. All questions of interpretation of the Plan
or any Stock Option granted under the Plan shall be determined by the
Committee, and such decisions shall be binding upon all persons having an
interest in the Plan and/or any Stock Option.
With respect to the participation of any Employees who are also
officers or directors of the Corporation subject to Section 16(b) of the
Exchange Act, the Plan shall be administered in compliance with the
"disinterested administration" requirement of Rule 16b-3. In the case of
officers or other Employees or persons who are not directors of the
Corporation, grants may be approved by the Committee or by a majority
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<PAGE> 16
of the members of the Board of Directors. Notwithstanding the above, the
Committee, in its sole discretion, may delegate its powers hereunder to grant
Stock Options to persons who are not subject to Section 16(b) of the Exchange
Act, to certain officers of the Corporation. Any such delegation shall be in
writing and shall clearly describe any limitations to which such delegation of
authority is subject.
In the event the Corporation is a "publicly held corporation" as
defined in paragraph (2) of section 162(m) of the Code, as amended by the
Revenue Reconciliation Act of 1993 (P.L. 103-66), and the regulations
promulgated thereunder ("Section 162(m)"), the Corporation may establish a
committee of outside directors meeting the requirements of Section 162(m) to
approve the grant of Stock Options which might reasonably be anticipated to
result in the payment of employee remuneration that would otherwise exceed the
limit on employee remuneration deductible for income tax purposes pursuant to
Section 162(m).
7. Indemnification. In addition to such other rights of indemnification
as they may have as directors or as members of the Committee, members of the
Board of Directors of the Corporation, members of the Committee and any
officers to whom authority to act for the Committee is delegated shall be
indemnified by the Corporation against all reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such person is liable for
gross negligence or misconduct in duties; provided, however, that within sixty
(60) days after the institution of such action, suit or proceeding, such person
shall offer to the Corporation, in writing, the opportunity at its own expense
to handle and defend the same.
8. Stock Options. The granting of a Stock Option shall be evidenced by a
stock option agreement ("Stock Option Agreement"), in such form and not
inconsistent with this Plan, as the Committee shall approve from time to time.
The Committee shall determine for each Stock Option (which need not be
identical), the exercise price of the Stock Option, the timing and terms of
exercisability and vesting of the Stock Option, the time of expiration of the
Stock Option, the effect of the Holder's termination of employment or service,
whether the Stock Option is to be treated as an Incentive Stock Option or as a
Nonqualified Stock Option, the method for satisfaction of any tax withholding
obligation arising in connection with the Stock Option, including by the
withholding or delivery of shares of Common Stock, and all other terms and
conditions of the Stock Option not inconsistent with the Plan. Each Stock
Option Agreement shall contain in substance the following terms and conditions:
8.1 Price. The Stock Option Agreement shall specify the Purchase
Price per Share. The Purchase Price per Share deliverable upon the exercise of
an Incentive Stock Option shall not be less than the Fair Market Value of a
Share on the Date of Grant of the Incentive Stock Option. In the case of a
grant of an Incentive Stock Option to an Employee who, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation, or of any parent or subsidiary corporation, the Purchase Price per
Share deliverable upon the exercise of the Incentive Stock Option shall not be
less than one hundred ten percent (110%) of the Fair Market Value of such Share
on the Date of Grant of the Incentive Stock Option. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with a Purchase Price lower
than the minimum price set forth above if such Stock Option is granted pursuant
to an assumption or substitution for another Stock Option in a manner
qualifying with the provisions of Section 424(a) of the Code. The Purchase
Price per Share deliverable upon exercise of a Nonqualified Stock Option shall
be determined by the Committee in its sole discretion.
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<PAGE> 17
8.2 Number of Shares. The Stock Option Agreement shall specify the
number of Shares subject to the Stock Option.
8.3 Exercisability of Stock Options. A Stock Option may be
exercisable, in part or in full, at any time and from time to time during an
exercise period, and subject to such performance criteria, conditions and
restrictions as determined by the Committee on a case-by-case basis for each
Stock Option, and as set forth in the Stock Option Agreement. In no event
shall the exercise period of any Incentive Stock Option granted hereunder
exceed ten (10) years from the Date of Grant of such Option; provided, however,
that in the case of a grant of an Incentive Stock Option to an Employee, who,
at the time the Incentive Stock Option is granted, owns stock possessing more
than ten percent (10%) of the total combined voting stock of the Corporation or
of any parent or subsidiary corporation, such Incentive Stock Option shall not
be exercisable after the expiration of five (5) years from its Date of Grant.
In the event that the aggregate Fair Market Value (determined as of
the Date of Grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by an Employee during any calendar year (under
all stock option plans of the Corporation and its parent or subsidiary
corporations) exceeds $100,000, the excess shall be treated as a Nonqualified
Stock Option. This paragraph shall be applied by taking Incentive Stock
Options into account in the order in which they were granted.
8.4 Payment of Purchase Price.
(a) Forms of Payment Authorized. Payment of the Purchase Price
for the number of Shares being purchased pursuant to any Stock Option shall be
made (1) in cash, by check, or cash equivalent, (2) by tender to the
Corporation of shares of the Corporation's Common Stock owned by the Holder
having a value, as determined by the Committee (but without regard to any
restrictions on transferability applicable to such stock by reason of federal
or state securities laws or agreements with an underwriter for the
Corporation), not less than the option price, (3) if specifically permitted by
the Committee and set forth in the Holder's Stock Option Agreement, by the
Holder's recourse promissory note, (4) by the assignment of the proceeds of a
sale of some or all of the shares being acquired upon the exercise of a Stock
Option (including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Committee of
Governors of the Federal Reserve System), or (5) by any combination thereof.
The Committee may at any time or from time to time, grant Stock Options which
do not permit all of the foregoing forms of consideration to be used in payment
of the option price and/or which otherwise restrict one (1) or more forms of
consideration.
(b) Tender of Corporation Stock. Notwithstanding the foregoing,
a Stock Option may not be exercised by tender to the Corporation of shares of
the Corporation's Common Stock to the extent such tender of stock would
constitute a violation of the provisions of any law, regulation and/or
agreement restricting the redemption of the Corporation's stock. Unless
otherwise provided by the Committee, a Stock Option may not be exercised by
tender to the Corporation of shares of the Corporation's Common Stock unless
such shares of the Corporation's common stock either have been owned by the
Holder for more than six (6) months or were not acquired, directly or
indirectly, from the Corporation.
(c) Promissory Notes. No promissory note shall be permitted if
an exercise using a promissory note would be a violation of any law. Any
permitted promissory note shall be due and payable not more than five (5) years
after the Stock Option is exercised, and interest shall be payable at least
annually and be at least equal to the minimum interest rate necessary to avoid
imputed interest pursuant to all applicable sections of the Code. The
Committee shall have the authority to permit or require the Holder to secure
any promissory note used to exercise a Stock Option with the Shares acquired on
exercise of the Stock Option and/or with other collateral acceptable to the
Corporation. Unless otherwise provided by the Committee, in the event the
Corporation at any time becomes subject to the regulations promulgated by the
Board of Governors of the Federal Reserve System or any other governmental
entity affecting the extension of credit in connection with the Corporation's
securities, any promissory note shall comply with such applicable regulations,
and the Holder shall pay the unpaid principal and accrued interest, if any, to
the extent necessary to comply with such applicable regulations.
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<PAGE> 18
(d) Assignment of Proceeds of Sale. The Corporation reserves,
at any and all times, the right, in the Corporation's sole and absolute
discretion, to establish, decline to approve and/or terminate any program
and/or procedures for the exercise of Stock Options by means of an assignment
of the proceeds of a sale of some or all of the Shares to be acquired upon such
exercise.
9. Recapitalization. Appropriate adjustments shall be made in the number
and class of Shares subject to the Plan, and to any outstanding Stock Options
and in the Purchase Price per Share of any outstanding Stock Options in the
event of a stock dividend, stock split, reverse stock split, combination,
reclassification, or like change in the capital structure of the Corporation.
10. Reorganization. A "Reorganization" shall be deemed to have occurred
in the event any of the following occurs with respect to the Corporation: (a)
the direct or indirect sale or exchange by the stockholders of the Corporation
of all or substantially all of the stock of the Corporation where the
stockholders of the Corporation before such sale or exchange do not retain,
directly or indirectly, at least a majority of the beneficial interest in the
voting stock of the Corporation after such sale or exchange; (b) a merger or
consolidation in which the Corporation is not the surviving corporation; (c) a
merger or consolidation in which the Corporation is the surviving corporation
where the stockholders of the Corporation before such merger or consolidation
do not retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Corporation after such merger or
consolidation; (d) the sale, exchange, or transfer of all or substantially all
of the assets of the Corporation (other than a sale, exchange, or transfer to
one (1) or more subsidiary corporations (as defined in paragraph 2.2 above) of
the Corporation); or (e) a liquidation or dissolution of the Corporation.
In the event of a Reorganization, the surviving, continuing,
successor, or purchasing corporation or parent corporation thereof, as the case
may be (the "Acquiring Corporation"), may assume the Corporation's rights and
obligations under outstanding Stock Options or substitute options for the
Acquiring Corporation's stock for such outstanding Stock Options. In the event
the Acquiring Corporation elects not to assume or substitute for such
outstanding Stock Options in connection with the Reorganization, any
unexercisable and/or unvested portion of the outstanding Stock Options shall be
immediately exercisable and vested as of the date thirty (30) days prior to the
date of the Reorganization. The exercise and/or vesting of any Stock Option
that was permissible solely by reason of this paragraph 10 shall be conditioned
upon the consummation of the Reorganization. Any Stock Options which are
neither assumed or substituted for by the Acquiring Corporation in connection
with the Reorganization nor exercised as of the date of the Reorganization
shall terminate and cease to be outstanding effective as of the date of the
Reorganization.
11. Investment Representations. The Committee may require a
Holder to whom a Stock Option is granted, as a condition of receipt and/or
exercise of the Stock Option, to give written assurances in substance and form
satisfactory to the Committee to the effect that the Holder is acquiring the
Stock Option granted hereunder or the Shares issuable upon exercise thereof for
the Holder's own account and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Committee
deems necessary or appropriate in order to comply with federal and applicable
state securities laws. Appropriate legends may be placed on any Shares issued
under the Plan evidencing such representations.
12. Compliance With Securities Laws. Each Stock Option granted
hereunder shall be subject to the requirement that, if at any time the
Committee, in its discretion, shall determine that the listing, registration or
qualification of the Shares subject to such Stock Option upon any securities
exchange or under any state or federal law, or the consent or approval of any
government or regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of such Stock Option granted hereunder or the
issue of Shares, such Stock Option may not be granted or exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Nothing in the Plan or related Stock Option Agreements shall be
deemed
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<PAGE> 19
to require the Corporation to apply for or obtain such listing, registration or
qualification.
13. Rights as a Stockholder. A Holder shall have no rights as a
stockholder of the Corporation with respect to any Shares covered by a Stock
Option granted hereunder until said Holder tenders an effective and
unconditional notice of exercise of the Stock Option to the Corporation,
complies with all other terms and conditions of exercise and, if applicable,
pays the Purchase Price. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date on which the Holder tenders notice of exercise,
complies with all other terms and conditions of exercise, and pays any
applicable Purchase Price. The Committee shall use its best efforts to secure
prompt issuance of stock certificates following full performance of exercise by
any Holder.
14. Non-Assignability of Options. No Incentive Stock Option shall
be assignable or transferable by the Holder except by will or by the laws of
descent and distribution. During the life of the Holder, an Incentive Stock
Option shall be exercisable only by the Holder or by the duly appointed legal
representative of an incompetent Holder. A Nonqualified Stock Option may be
assignable or transferable to the extent set forth in the Stock Option
Agreement governing such Stock Option.
15. Withholding Taxes. The Corporation shall have the right to
deduct from amounts otherwise due Holder under a Stock Option granted hereunder
or from any wages or other compensation to be paid to Holder any sums required
by federal, state and local tax law to be withheld with respect to the exercise
of any Stock Option or with respect to the disposition of Shares issued
hereunder or, in the alternative, to require the Holder to pay such sums to the
Corporation. The Corporation may, in its discretion and upon request by
Holder, withhold from the Shares to be issued to Holder under this Plan a
number of Shares (based on the Fair Market Value of the Shares on the date of
exercise of the Stock Option) necessary to satisfy any tax withholding
requirements.
16. Termination or Amendment of the Plan and Stock Options. The Committee
may terminate or amend the Plan or any Stock Option at any time; except that,
without stockholder approval, the Committee may not increase the number of
Shares which may be issued under the Plan (except by operation of paragraph 9)
or modify the requirements as to eligibility for participation in the Plan. In
addition, the approval of the Corporation's stockholders shall be sought for
any amendment to the Plan or a Stock Option for which the Committee deems
stockholder approval necessary in order to comply with Rule 16b-3. In any
event, no amendment may adversely affect any then outstanding Stock Option or
any unexercised portion thereof, without the consent of the Holder, unless such
amendment is required to enable a Stock Option designated as an Incentive Stock
Option to qualify as an Incentive Stock Option.
17. No Special Employment Rights. Nothing contained in this Plan
or in any Stock Option granted hereunder shall confer upon any Holder any right
with respect to continued employment or engagement with the Corporation or
interfere in any way with the right of the Corporation, subject to the terms of
any separate agreement with the Holder to the contrary, at any time to
terminate such employment or engagement or to increase or decrease the
compensation or other benefits paid to the Holder.
18. Governing Law. This Plan and any Stock Options issued
hereunder shall be governed by and construed in accordance with the laws of the
State of California.
IN WITNESS WHEREOF, the undersigned Secretary of the Corporation
certifies that the foregoing Cohu, Inc. 1994 Stock Option Plan was duly adopted
by the Board of Directors of the Corporation on July 21, 1994.
/s/ Charles A. Schwan
----------------------------
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COHU, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 2, 1995
The undersigned hereby (i) acknowledge(s) receipt of the Notice and Proxy
Statement dated March 30, 1995 relating to the Annual Meeting of Stockholders
of Cohu, Inc. (the "Company") to be held May 2, 1995 and (ii) appoint(s)
WILLIAM S. IVANS, JAMES W. BARNES and CHARLES A. SCHWAN as proxies, with full
power of substitution, and authorizes them, or any of them, to vote all the
shares of common stock of the Company standing in the name of the undersigned
at said meeting or any adjournment thereof upon the matter specified below and
upon such other matters as may be properly brought before the meeting,
conferring discretionary authority upon such proxies as to such other matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1, 2 AND 3.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS. FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
</TABLE>
JAMES W. BARNES WILLIAM S. IVANS
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
________________________________________________________________________________
(Please sign and date on the reverse side)
2. ADOPTION OF THE COHU, INC. 1994 EMPLOYEE STOCK OPTION PLAN.
FOR / / AGAINST / / ABSTAIN / /
3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE IN PERSON EVEN THOUGH THEY HAVE
PREVIOUSLY MAILED THIS PROXY.
Dated: _____________________ 1995 _________________________________
Signature of Stockholder
_________________________________
Signature of Stockholder
IMPORTANT: Please date this Proxy and
sign exactly as your name(s) appears
hereon. When signing as a fiduciary,
please give your full title. If shares
are held in the names of two or more
persons, any one may sign.
PLEASE DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENVELOPE. NO POSTAGE IS
REQUIRED FOR DOMESTIC MAILING.
