<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/ No fee required.
/ / 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. LETTERHEAD]
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 6, 1997, at 2:00 p.m. Pacific Time, for the
following purposes:
1. To elect two Directors, each for a term of three years; and
2. To approve the Cohu, Inc. 1997 Employee Stock Purchase Plan; and
3. To approve the Cohu, Inc. 1996 Outside Directors Stock Option Plan; and
4. 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 21, 1997 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. You may also revoke your proxy 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/ JOHN H. ALLEN
-----------------
John H. Allen
Secretary
San Diego, California
April 1, 1997
YOUR VOTE IS IMPORTANT
IN ORDER TO INSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED POSTAGE PREPAID 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., a Delaware corporation (the "Company"), of
your Proxy for use at the Annual Meeting of Stockholders on Tuesday, May 6,
1997, at 2:00 p.m. Pacific Time 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 April 1, 1997. 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 Meeting.
On March 21, 1997, the record date fixed by the Board of Directors (the
"Record Date"), the Company had outstanding 9,384,861 shares of Common Stock.
Stockholders have one vote for each share on all business of the Meeting. 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.
Except with respect to the election of directors where cumulative voting is
involved and except in certain other specific circumstances, the affirmative
vote of a majority of shares present in person or represented by proxy at a duly
held meeting at which a quorum is present is required under Delaware law for
approval of proposals presented to stockholders. A quorum generally consists of
a majority of the shares entitled to vote and present or represented by proxy at
the meeting. Abstentions will not be considered to be a vote "for" or "against"
a proposal, but will be included in determining whether a quorum is present. If
a broker indicates on the enclosed proxy or its substitute that it does not have
discretionary authority as to certain shares to vote on a particular matter
("broker non-votes"), those shares will be included in determining whether a
quorum is present but will not be considered as present with respect to that
matter. Any proxy that is returned not marked as to a particular item will be
voted FOR the election of Directors, FOR the approval of the Cohu, Inc. 1997
Employee Stock Purchase Plan and FOR the approval of the Cohu, Inc. 1996 Outside
Directors Stock Option Plan.
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 days immediately prior to the Meeting.
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,
facsimile transmission or telegram. Directors and officers may engage in such
solicitation but will not be entitled to any additional compensation for such
efforts. The Company has retained Georgeson & Co. 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. Votes will be tabulated by the
inspector of elections of the Meeting with the assistance of Georgeson & Co.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 21, 1997 by (i) each person
known by the Company, based on information provided by such person, to own more
than 5% of the Company's Common Stock; (ii) each director of the Company; (iii)
each named executive officer included in the "Summary Compensation Table"; and
(iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT & NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2)
- ------------------------------------------------------------ ----------------------- -------------------
<S> <C> <C>
Nicholas J. Cedrone......................................... 696,121 7.42%
One Monarch Drive
Littleton, MA 01460
John H. Allen............................................... -- *
James W. Barnes............................................. 247,168 2.61%
Harry L. Casari............................................. 800 *
Frank W. Davis.............................................. 19,600 *
William S. Ivans............................................ 136,152 1.45%
Gene E. Leary............................................... 10,000 *
Charles A. Schwan........................................... 152,696 1.62%
All current directors and executive officers as a group (7
persons).................................................. 566,416 5.96%
</TABLE>
- ---------------
* Less than 1%
(1) Includes 75,000, 45,000 and 120,000 shares issuable upon exercise of stock
options held by Mr. Barnes, Mr. Schwan and all current directors and
executive officers as a group, respectively, that were exercisable on, or
exercisable within 60 days of, March 21, 1997.
(2) Computed on the basis of 9,384,861 shares of common stock outstanding as of
March 21, 1997, plus, with respect to those persons holding options to
purchase common stock exercisable within 60 days of March 21, 1997, the
number of shares of common stock issuable upon exercise thereof.
ITEM 1 -- ELECTION OF DIRECTORS
The Certificate of Incorporation divides the directors of the Company into
three classes whose terms expire at different times. One class of directors is
elected for a term of three years at each annual meeting with the remaining
directors continuing in office. At the Meeting two directors are to be elected
for a term expiring in 2000. 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 2000 -- CLASS 3
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ----------------------- --- --------------------------------------------------------- --------
<S> <C> <C> <C>
Frank W. Davis......... 82 Retired former President of Convair Aerospace Division of 1976
General Dynamics
Harry L. Casari........ 60 Retired partner, Ernst & Young LLP. Mr. Casari is also a 1995
director of Mail Boxes Etc.
</TABLE>
2
<PAGE> 5
INFORMATION CONCERNING OTHER DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE IN 1998 -- CLASS 1
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ----------------------- --- --------------------------------------------------------- --------
<S> <C> <C> <C>
James W. Barnes........ 67 Retired President & Chief Executive Officer of the 1983
Company (1983-1996)
William S. Ivans....... 76 Chairman of the Board of the Company since February 1983 1960
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 1999 -- CLASS 2
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ----------------------- --- ------------------------------------------------------------- --------
<S> <C> <C> <C>
Charles A. Schwan...... 57 President & Chief Executive Officer of the Company since 1990
March 1996, Executive Vice President & Chief Operating
Officer from September 1995 to March 1996, Vice President,
Finance from 1983 until September 1995 and Secretary from
1988 until September 1995
Gene E. Leary.......... 76 Retired executive at Honeywell, Inc. and Control Data Corp. 1976
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
ORGANIZATION OF THE BOARD OF DIRECTORS
The Board held a total of nine meetings during 1996.
The Board of Directors has established two standing committees: the Audit
Committee and the Compensation Committee. The Audit Committee, composed of
Messrs. Leary, Casari and Davis, is the principal link between the Board and the
Company's independent auditors, and monitors audit and internal accounting
control procedures. The Audit Committee held two meetings during 1996. The
Compensation Committee, also consisting of Messrs. Davis, Casari 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 Compensation Committee held five meetings in 1996.
DIRECTORS' COMPENSATION
Outside Directors receive (i) an annual retainer of $8,500; (ii) $500 per
meeting attended in person to a maximum of $2,500 annually; and (iii) $1,000
annually for membership on one or more active committees. The Cohu, Inc. 1996
Outside Directors Stock Option Plan, which is subject to stockholder approval,
provides that each Outside Director will receive an automatic grant of an option
to purchase 10,000 shares of the Company's Common Stock upon their appointment
to the Board. See "Approval of the Cohu Inc. 1996 Outside Directors Stock Option
Plan". For services as Chairman of the Board, Mr. Ivans received compensation
totaling approximately $36,000 from the Company in 1996. Pursuant to an
employment agreement with the Company, Mr. Barnes is paid an annual salary of
$30,000.
3
<PAGE> 6
COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table discloses compensation paid to the Company's Chief
Executive Officer and the other executive officers whose aggregate cash
compensation exceeded $100,000 (the "Named Executive Officers") during the last
three years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) COMPENSATION($)(2)
- ---------------------------------- ---- --------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
James W. Barnes(3)................ 1996 66,667 37,416 -- 2,667
President & Chief Executive 1995 245,095 226,000 -- 16,516
Officer until March 1, 1996 1994 228,460 184,710 80,000 14,912
Charles A. Schwan(3).............. 1996 263,333 246,950 50,000(5) 20,878
President & Chief Executive 1995 210,712 181,585 -- 13,047
Officer since March 1, 1996 1994 185,500 137,236 40,000 11,159
John H. Allen(4).................. 1996 143,000 122,846 40,000(5) 10,994
Vice President, Finance & Chief 1995 62,500 50,850 20,000 --
Financial Officer, Secretary
</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
Employees' Retirement 401(k) Plan and the Executive Deferred Compensation
Plan.
(3) Mr. Barnes retired as President & Chief Executive Officer of the Company
effective March 1, 1996. Mr. Schwan, who was promoted from Vice President,
Finance to Executive Vice President & Chief Operating Officer on September
6, 1995 was promoted to President & Chief Executive Officer on March 1,
1996.
(4) Mr. Allen joined the Company in June, 1995. He was Director of Finance until
September 5, 1995, became Vice President, Finance and Secretary on September
6, 1995 and was appointed Chief Financial Officer on October 30, 1995. On an
annualized basis his salary for the year ended December 31, 1995 was
$125,000.
(5) Includes 25,000 and 30,000 stock options for Mr. Schwan and Mr. Allen,
respectively, that were repriced on November 13, 1996 to $17.00 per share.
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 Compensation Committee. 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 the 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 Compensation
Committee, or in the case of divisions and subsidiaries, by the corporate
management.
RETIREMENT PLAN. The Cohu Employees' Retirement 401(k) Plan was
implemented on January 1, 1978. The majority of the Company's employees,
including the Named Executive Officers, who are at least 21 years of age and
complete six months of service are eligible to enroll in this Plan. The
participant may contribute up to 11% of his or her annual compensation. The
Company matches participant contributions up to 4% of annual employee
compensation not to exceed $150,000. The amounts contributed by the Company are
vested 10% after one year of participation, another 10% after two years, and an
additional 20% each year thereafter to the full 100%. None of the contributions
nor accumulated earnings are taxable to the participant until withdrawn. The
maximum annual amount that a participant may contribute is currently $9,500.
4
<PAGE> 7
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 participant
contributions up to 4% of the executive's compensation 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's 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.
TERMINATION AGREEMENTS. The Company has entered into Termination
Agreements with Mr. Schwan and Mr. Allen 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 consecutive 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 for specified causes including death, disability,
wrongful acts, habitual intoxication, habitual neglect of duties or normal
retirement. Termination 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 agreements will change from year to
year based on the executive's compensation. In the event of a termination in
1997 following a change of control, the amounts payable to Mr. Schwan and Mr.
Allen would be approximately $1,040,000 and $760,000, respectively.
EMPLOYMENT AGREEMENT. James W. Barnes resigned as President & Chief
Executive Officer of the Company effective March 1, 1996. The Company and Mr.
Barnes entered into an employment agreement for a three-year period commencing
March 1, 1996. Pursuant to the Agreement, Mr. Barnes agreed to provide the
Company with employment services under the direction and control of the Company
on a part-time basis. For such services Mr. Barnes will be paid an annual salary
of $30,000. Mr. Barnes will continue to serve as a member of the Company's Board
of Directors, subject to reelection by the stockholders at the conclusion of his
term in office.
5
<PAGE> 8
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on grants of options to purchase
the Company's Common Stock made to the Named Executive Officers during the year
ended December 31, 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED PRICE APPRECIATION
OPTIONS TO EMPLOYEES EXERCISE OR FOR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME (#)(1) YEAR ($/SH) DATE 5%($) 10%($)
- ---------------------------------- ---------- ------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Schwan................. 25,000 5.7 26.06 2/15/06 409,750 1,038,250
25,000(2) 5.7 17.00 11/13/06 267,250 677,250
John H. Allen..................... 10,000 2.3 26.06 2/15/06 163,900 415,300
30,000(2) 6.8 17.00 11/13/06 320,700 812,700
</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 one-fourth each year and expire
ten years from the date of grant. The options were granted under the
Company's 1994 and 1996 Employee Stock Option Plans.
(2) Options that were repriced on November 13, 1996, replacing all options that
were outstanding at that date with exercise prices higher than $17.00 (See
Summary Compensation Table, note 5). The repricing was offered to all option
holders.
(3) The "potential realizable value" shown represents the potential gains based
on annual compound stock price appreciation of 5% and 10% from the date of
grant through the full 10-year option term, net of exercise price, but
before taxes associated with the exercise. The amounts represent assumed
rates of appreciation only based on the Securities and Exchange Commission
rules and do not represent the Company's estimate of the possible future
appreciation in the Company's common stock or gains, if any, that may
ultimately be realized by the above option holders.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1996 by the
Named Executive Officers and the value of such officers' unexercised options at
December 31, 1996.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE AT FISCAL YEAR-END(#) FISCAL YEAR-END($)(1)
ON EXERCISE REALIZED ------------------------------- ----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James W. Barnes............ 35,000 459,900 85,000 40,000 1,311,850 607,600
Charles A. Schwan.......... 15,000 306,000 45,000 45,000 695,050 460,050
John H. Allen.............. -- -- -- 30,000 -- 187,500
</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, 1996, minus the aggregate
exercise price. The closing price of the Company's Common Stock on December
31, 1996 as reported on NASDAQ was $23.25.
6
<PAGE> 9
TEN-YEAR OPTION REPRICING
The following table summarizes stock options granted to the executive
officers of the Company that have been repriced during the last ten years.
<TABLE>
<CAPTION>
NUMBER OF MARKET LENGTH OF
SECURITIES PRICE OF EXERCISE ORIGINAL TERM
UNDERLYING STOCK AT PRICE AT NEW REMAINING AT
REPRICING OPTIONS TIME OF TIME OF EXERCISE DATE OF
NAME DATE REPRICED(#) REPRICING($) REPRICING($) PRICE($) REPRICING
- ----------------------------- --------- ---------- ------------ ------------ -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James W. Barnes.............. 10/23/90 100,000(1) 1.91 2.72 1.91 4 years 276 days
Charles A. Schwan............ 10/23/90 60,000(1) 1.91 2.72 1.91 4 years 276 days
11/13/96 25,000 17.00 26.06 17.00 9 years 94 days
John H. Allen................ 11/13/96 20,000 17.00 22.25 17.00 8 years 228 days
11/13/96 10,000 17.00 26.06 17.00 9 years 94 days
</TABLE>
- ---------------
(1) Number of options and market and exercise prices reflect two-for-one stock
splits in 1993 and 1995. Number of options repriced before stock splits were
25,000 and 15,000 for Mr. Barnes and Mr. Schwan, respectively.
COMPENSATION COMMITTEE REPORT
Notwithstanding any statement to the contrary in any of the Company's
previous or future filings with the Securities and Exchange Commission, this
Report shall not be incorporated by reference into any such filings.
The Compensation Committee (the "Committee") of the Board of Directors,
comprised of the non-employee directors, determines and administers the
Company's executive compensation policies and programs.
COMPENSATION PHILOSOPHY
One of the Committee's primary objectives in establishing compensation
policies is to maintain competitive programs to attract, retain and motivate
high caliber executives and maximize the long-term success of the Company by
appropriately rewarding such individuals for their achievements. Another
objective is to provide an incentive to executives to focus their efforts on
long-term goals for the Company by closely aligning their financial interests
with those of the stockholders. To attain these goals, the Committee has
designed the Company's executive compensation program to include base salary,
annual incentives and long-term incentives in the form of stock options. The
Committee believes that the Company's executive compensation programs, as
summarized below, have met these objectives.
BASE SALARY
The Committee generally determines base salary levels for executive level
positions prior to the annual stockholders' meeting in May. The process involved
in the determination of executive base salaries for fiscal 1996 is summarized
below.
In April 1996, 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 1996, 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 1996. The Company's performance was
compared to objectives for the last fiscal year and performance targets for
fiscal 1996 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, 1996, for each
executive level position other than the chief executive officer.
7
<PAGE> 10
The Committee reviewed the base salary of the chief executive officer and
compared it to those in peer positions in companies of similar size and
performance. As a result of this review, the Committee determined that effective
May 1, 1996, 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.
ANNUAL INCENTIVES
Bonuses are designed to be a significant component of cash compensation.
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 1997, the Committee reviewed and approved incentive awards for
1996 for all eligible participants in the Company's Incentive Plan. The bonuses
were 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 the earnings
objectives were exceeded.
STOCK OPTIONS
The Committee grants stock options to focus the executive on the long-term
performance of the Company and on maximizing stockholder value. The grant of
stock options is closely tied to individual executive performance. The Committee
grants such stock options after a review of various factors, including the
executive's current equity ownership in the Company, potential future
contributions to the Company and job responsibilities. Stock options are granted
with an exercise price equal to the current fair market value of the Company's
stock and utilize vesting periods to encourage retention of executive officers.
The Committee believes stock options serve to align the interests of executive
officers with those of other stockholders.
STOCK OPTION REPRICING
In November 1996, the Committee authorized the reduction of the exercise
price under options granted to employees, including executives, that had an
exercise price higher than the market price of the Company's Common Stock at the
time of the repricing ($17.00). The options granted to employees were designed
to provide an incentive to the employees to work to achieve long-term success
for the Company. The Committee determined that the decline in the market price
of the Company's Common Stock since the date the options had been granted had
diminished the motivational impact of the options. As a result, the Committee
deemed it to be in the best interests of the Company to allow the reissue of the
options with an exercise price equal to the market price at the date of reissue.
All repriced options are subject to a new four-year vesting period beginning on
the date of reissue.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:
Frank W. Davis Harry L. Casari Gene E. Leary
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, Messrs. Davis, Casari and Leary served as members of the
Compensation Committee. None of the Compensation Committee members or Named
Executive Officers have any relationships which must be disclosed under this
caption.
8
<PAGE> 11
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 NASDAQ 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 December 31, 1991, and reinvestment of
all dividends). The Peer Group Index set forth on the Performance Graph is the
index for Media General Financial Services, Inc. Industry Group 171, "Electronic
Equipment Manufacturers". Historical stock price performance is not necessarily
indicative of future stock price performance. Notwithstanding any statement to
the contrary in any of the Company's previous or future filings with the
Securities and Exchange Commission, the graph shall not be incorporated by
reference into any such filings.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Cohu, Inc. Peer Group NASDAQ
<S> <C> <C> <C>
1992 111 132 101
1993 320 191 121
1994 381 212 127
1995 870 292 165
1996 800 400 205
</TABLE>
ITEM 2 -- APPROVAL OF THE COHU, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
On February 28, 1997 the Board of Directors of the Company approved for
submission to the stockholders at the Meeting the Cohu, Inc. 1997 Employee Stock
Purchase Plan (the "Purchase 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 Purchase Plan pursuant to which 300,000 shares of the Company's
Common Stock will be reserved for issuance. The following is a summary of the
principal features of the Purchase Plan and does not purport to be a complete
description of all provisions of the Purchase Plan. A copy of the Purchase Plan
is available to any stockholder upon written request to the Company Secretary.
In the event of any discrepancy between the language of the Purchase Plan and
the summary provided herein, the language in the Purchase Plan shall control.
PURPOSE
The Board of Directors believes that the recruitment and retention of
qualified personnel are essential to the Company's continued growth and success
and that an incentive plan such as the Purchase Plan is necessary for the
Company to remain competitive in its compensation practices. The majority of
high technology companies have purchase plans similar to the Purchase Plan
described herein. The Purchase Plan will provide employees the opportunity to
purchase Common Stock of the Company at a discount from market through payroll
deductions.
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<PAGE> 12
ADMINISTRATION
The Purchase Plan will be administered by the Compensation Committee of the
Board. Such committee will have full authority to adopt such rules and
procedures as it may deem necessary for proper plan administration and to
interpret the provisions of the Purchase Plan. All costs and expenses incurred
in plan administration will be paid by the Company without charge to
participants.
ELIGIBILITY AND PARTICIPATION
Any regular employee, including officers, who is employed by the Company
(or any of its majority-owned subsidiaries) for more than 20 hours per week and
more than five months in a calendar year is eligible to participate in the
Purchase Plan provided that the employee is employed on the first day of an
offering period and subject to certain limitations imposed by Section 423(b) of
the Internal Revenue Code of 1986 (the "Code"). As of March 7, 1997
approximately 800 employees were eligible to participate in the Purchase Plan.
Eligible employees become participants in the Purchase Plan by delivering
to the Company a subscription agreement authorizing payroll deductions prior to
the applicable offering date, or at such other time as may be determined by the
Compensation Committee with respect to a given offering. By executing a
subscription agreement to participate in the Purchase Plan, each employee is in
effect granted an option to purchase shares of the Company's Common Stock.
No employee shall be permitted to subscribe for shares under the Purchase
Plan if, immediately after the grant of the option, the employee would own 5% or
more of the voting stock of all classes of stock of the Company nor shall any
employee be granted an option that would permit such employee to purchase stock
under the Purchase Plan at a rate that exceeds $25,000 worth of stock
(determined at the fair market value of the shares at the time the option is
granted) for each calendar year in which such option is outstanding at any time.
OFFERING PERIODS
The Purchase Plan will be implemented in a series of successive offering
periods each with a duration of six months, except that the initial offering
period is currently scheduled to run from July 1, 1997 to October 31, 1997.
Thereafter, offering periods will commence each November 1 and May 1. Shares
will be purchased on the last business day of each offering period. The Board of
Directors may alter the duration of the offering periods without stockholder
approval.
PURCHASE PRICE
The price per share at which shares are purchased under the Purchase Plan
is equal to the lower of (i) 85% of the fair market value of the Common Stock on
the date of commencement of the offering period and (ii) 85% of the fair market
value of the Common Stock on the last day of the offering period. The fair
market value of the Common Stock on any relevant date will be deemed to equal
the closing price on such date on the NASDAQ National Market.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions
during the offering period. The deductions may not exceed 10% of a participant's
eligible compensation, which is defined in the Purchase Plan to include regular
straight-time salary, exclusive of any payments for overtime, bonuses,
commissions or incentive compensation. Payroll deductions shall commence on the
first payday following the commencement date of the offering and shall continue
until the end of the offering period unless sooner terminated as provided for in
the Purchase Plan.
All payroll deductions are credited to the participant's account under the
Purchase Plan and are deposited with the general funds of the Company and until
shares are purchased under the Purchase Plan such funds may be used by the
Company for any corporate purpose.
WITHDRAWAL
A participant's interest in a given offering may be terminated in whole,
but not in part, by signing and delivering to the Company a notice of withdrawal
from the Purchase Plan. Such withdrawal may be elected at any time prior
10
<PAGE> 13
to the end of the applicable six-month offering period and will result in a
refund of all payroll deductions for that offering period. Any withdrawal by the
participant of accumulated payroll deductions for a given offering automatically
terminates the participant's interest in that offering. A participant who ceases
to be an eligible employee will receive a refund of their payroll deductions for
the offering period in which such loss of eligibility status occurs. No interest
will be paid on such refunds.
SHARES RESERVED FOR ISSUANCE; CAPITAL CHANGES
A maximum of 300,000 shares of the Company's Common Stock may be issued
under the Purchase Plan. In the event any change is made in the capitalization
of the Company, such as stock splits or stock dividends, which results in an
increase or decrease in the number of shares of Common Stock outstanding,
appropriate adjustments will be made by the Company in the shares subject to
purchase and in the purchase price per share.
In the event the Company is acquired by merger or asset sale during an
offering period, all outstanding purchase options shall be assumed or an
equivalent option shall be substituted by the successor corporation. If the
successor corporation does not agree to assume the option or to substitute an
equivalent option, the Board shall provide for the optionee to have the right to
exercise the option immediately prior to the acquisition.
NONASSIGNABILITY
No rights or accumulated payroll deductions of an employee under the
Purchase Plan may be pledged, assigned or transferred for any reason and any
such attempt may be treated by the Company as an election to withdraw from the
Purchase Plan.
AMENDMENT AND TERMINATION
The Purchase Plan will terminate upon the earliest to occur of (i) February
28, 2007, (ii) the date on which all available shares are issued or (iii) the
date on which all outstanding purchase options are exercised in connection with
an acquisition of the Company.
The Board of Directors may at any time amend or terminate the Purchase
Plan, except that such termination shall not affect options previously granted
nor may any amendment make any change in an option granted prior thereto which
adversely affects the rights of any participant. No amendment may be made to the
Purchase Plan without the prior approval of the stockholders of the Company if
such amendment would increase the number of shares reserved under the Purchase
Plan, permit payroll deductions in excess of 10% of the participant's
compensation, materially modify the eligibility requirements or materially
increase the benefits which may accrue under the Purchase Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is only a summary of the United States federal income tax
consequences to participants in the Purchase Plan and does not purport to be
complete. Interested parties and participants should refer to the applicable
provisions of the Code. The summary does not address other taxes such as state
and local income taxes, federal and state estate, inheritance and gift taxes and
foreign taxes. Each participant should consult his or her own tax advisor
concerning the tax consequences of the Purchase Plan.
The Purchase Plan is intended to qualify under the provisions of Sections
421 and 423 of the Code. Under these provisions, no income will be taxable to a
participant at the time of grant of the option or when shares are purchased.
Upon disposition of the shares, the participant will generally be subject to tax
and the amount of the tax will depend upon the holding period. If the shares
have been held by the participant for more than two years after the first day of
the offering period in which the shares were acquired and more than one year
after the purchase date of the shares then the lesser of (i) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price of the shares, or (ii) 15% of the fair market value of the shares
on the first day of the offering period, will be treated as ordinary income, and
any further gain upon such disposition will be treated as long-term capital
gain. If the shares are disposed of before the expiration of the holding periods
described above, the excess of the fair market value of the shares on the last
day of the offering period over the purchase price will be treated as ordinary
income, and any further gain or loss on such disposition will be long-term or
short-term capital gain or loss, depending on the holding period. The Company is
not entitled to a deduction for amounts taxable to a participant,
11
<PAGE> 14
except to the extent of ordinary income reported by participants upon
disposition of shares prior to the expiration of the holding periods described
above.
BOARD RECOMMENDS APPROVAL
The Board of Directors has adopted and recommends that the stockholders
approve the Purchase 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 PURCHASE PLAN.
ITEM 3 -- APPROVAL OF THE COHU, INC.
1996 OUTSIDE DIRECTORS STOCK OPTION PLAN
On November 13, 1996 The Board of Directors of the Company approved for
submission to the stockholders at the Meeting the Cohu, Inc. 1996 Outside
Directors Stock Option Plan (the "1996 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 1996 Plan pursuant to which 100,000 shares of the
Company's Common Stock will be reserved for issuance. The following is a summary
of the principal features of the 1996 Plan and does not purport to be a complete
description of all provisions of the 1996 Plan. A copy of the 1996 Plan is
available to any stockholder upon written request to the Company Secretary. In
the event of any discrepancy between the language of the 1996 Plan and the
summary provided herein the language in the 1996 Plan shall control.
PURPOSE
The 1996 Plan was approved by the Board of Directors to increase the
proprietary interest in the Company of the directors who are not employees of
the Company ("Outside Directors") and to align their interests more closely with
those of the Company's stockholders. The 1996 Plan will also improve the
Company's ability to attract and retain the services of experienced and highly
qualified Outside Directors.
ADMINISTRATION
The 1996 Plan will be administered by the Cohu, Inc. Board of Directors or
by a duly appointed committee of the Board having such powers specified by the
Board. The Board will have final power to construe and interpret the 1996 Plan.
However, the Board will have no authority, discretion, or power to select the
Outside Directors who will receive options under the 1996 Plan, to set the
exercise price of the options granted under the 1996 Plan, to determine the
number of shares of common stock to be granted under the option or to alter any
other terms of the 1996 Plan, except in the sense of administering the 1996 Plan
subject to the provisions thereof.
ELIGIBILITY AND TYPE OF OPTION
Stock Options under the 1996 Plan may be granted only to Outside Directors
of the Company. All options granted to Outside Directors under the 1996 Plan
will be nonstatutory stock options not intended to qualify under section 422(b)
of the Code.
TERM, AMENDMENT AND TERMINATION
The Board may suspend or terminate the 1996 Plan at any time. The term of
the 1996 Plan shall commence on the date of its approval by the Board, provided
that the 1996 Plan is approved by a majority of the stockholders of the Company
within one year thereafter. Unless sooner terminated by the Board, the term of
the 1996 Plan shall be for ten years from the commencement date. Termination of
the 1996 Plan shall not affect any rights previously granted thereunder. The
Committee may terminate, modify or amend the 1996 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 (i) increase the number of shares of Common Stock reserved
for issuance upon exercise of options pursuant to the 1996 Plan; (ii) modify the
requirements relating to eligibility for participation in the 1996 Plan; or
(iii) change any provision of the 1996 Plan in a manner that would increase the
benefits accruing to participants thereunder.
12
<PAGE> 15
SHARES RESERVED FOR ISSUANCE; CAPITAL CHANGES
A maximum of 100,000 shares of the $1.00 par value Common Stock of the
Company may be issued under the 1996 Plan, subject to adjustment in the event of
stock dividends, splits, subdivisions or combinations. Appropriate adjustments
shall be made in the number of shares subject to the 1996 Plan, the number of
shares subject to options to be granted under the 1996 Plan and to any
outstanding options and in the exercise price of such options in the event of a
stock dividend, stock split, recapitalization or like change in the capital
structure of the Company.
TERMS OF OPTIONS
Set forth below is a description of the terms of options granted or to be
granted pursuant to the 1996 Plan.
A. AUTOMATIC GRANT OF OPTIONS. Each person who was an Outside Director as
of the date the 1996 Plan was adopted by the Board of Directors or who is newly
elected or appointed as an Outside Director after such date shall be granted an
option to purchase 10,000 shares of Common Stock of the Company. Subject to
stockholder approval of the 1996 Plan, on November 13, 1996 the Board of
Directors granted options under the 1996 Plan to purchase 10,000 shares each to
Messrs. Casari, Davis and Leary.
B. OPTION EXERCISE PRICE. The purchase price per share deliverable upon
the exercise of a stock option under the 1996 Plan shall be the fair market
value of a share on the date of grant.
C. EXERCISE PERIOD AND EXERCISABILITY OF OPTIONS. An option granted
pursuant to the 1996 Plan shall be exercisable for a term of ten years. Each
option shall become exercisable in four equal installments commencing on the
first anniversary date of grant. One-quarter of the total number of shares
covered by the option shall be exercisable on the first anniversary and an
additional one-quarter shall be exercisable on each anniversary thereafter until
on the fourth anniversary all the shares subject to the option shall be fully
vested.
D. PAYMENT OF OPTION EXERCISE PRICE. Payment of the exercise price for the
number of shares of common stock purchased pursuant to any stock option shall be
made in cash or cash equivalent, by delivery to the Company of shares of Company
Common Stock that have been owned by the option holder for more than six months
and which have an aggregate value equal to such exercise price, or by any
combination thereof.
E. TRANSFER OF CONTROL. In the event of a proposed Transfer of Control, as
defined, any portion of an outstanding option that has not yet become
exercisable shall automatically become exercisable for a period of 30 days prior
to the proposed effective date of the Transfer of Control.
F. NONASSIGNABILITY. No option may be assigned or 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.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is only a summary of the United States federal income tax
consequences to option holders under the 1996 Plan and does not purport to be
complete. Interested parties and option holders should refer to the applicable
provisions of the Code. The summary does not address other taxes such as state
and local income taxes, federal and state estate, inheritance and gift taxes and
foreign taxes.
The grant of a nonstatutory stock option will generally 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 nonstatutory option in the
amount by which the fair market value of the Common Stock purchased 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 an amount equal to the
ordinary income recognized by the optionee in such case. Any subsequent
disposition of the shares acquired pursuant to a nonstatutory option will result
in gain or loss to the optionee in an amount equal to the difference between the
sale price and the fair market value at the date of exercise. Such gain or loss
will be treated as long-term or short-term capital gain or loss, depending upon
the holding period.
BOARD RECOMMENDS APPROVAL
The Board of Directors has adopted and recommends that the stockholders
approve the 1996 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 1996 PLAN.
13
<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1994 the Company acquired Daymarc Corporation, currently Daymarc,
Inc. ("Daymarc") a wholly-owned subsidiary of the Company. Pursuant to the
related Agreement and Plan of Merger dated June 16, 1994 the Company is
obligated to pay to Nicholas J. Cedrone, the former owner of Daymarc Corporation
and a current stockholder and employee of the Company, a specified percentage of
the profits of Daymarc through June 1998. Certain of such payments are payable
in shares of Cohu, Inc. Common Stock and totaled approximately $589,000 in 1996.
Mr. Cedrone is currently a Vice President of Daymarc and pursuant to an
Employment Agreement dated June 16, 1994 receives an annual salary of $168,000
through June 1998 and was paid a bonus of $221,000 in 1996. Under an Agreement
and Covenant Not To Compete entered into in connection with the Daymarc
acquisition, Mr. Cedrone was paid approximately $368,000 in 1996. Rental
payments made in 1996 to Mr. Cedrone under a facilities lease for the Daymarc
operation totaled approximately $363,000.
INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors
continuously since 1957 and the Board has selected this firm to serve as
independent auditors for the current year. Representatives of Ernst & Young LLP
will be present at the Meeting and be available to respond to appropriate
questions, and may make a statement if they desire to do so.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's executive officers and directors, and persons who own more than 10% of
a registered class of the Company's equity securities, file an initial report of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission (the "SEC") and The NASDAQ National Market. Such
officers, directors and 10% stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for such persons, the Company believes that during the year ended
December 31, 1996 its executive officers, directors and 10% stockholders
complied with all Section 16(a) filing requirements applicable to them.
OTHER MATTERS
The Board of Directors is unaware of any other business to be presented for
consideration at the 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, 1997 in order to be considered for inclusion in the
Company's 1998 proxy materials.
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/ JOHN H. ALLEN
-----------------
John H. Allen
Secretary
San Diego, California
April 1, 1997
14
<PAGE> 17
COHU, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 6, 1997
The undersigned hereby (i) acknowledge(s) receipt of the Notice and Proxy
Statement dated April 1, 1997 relating to the Annual Meeting of Stockholders of
Cohu, Inc. (the "Company") to be held May 6, 1997 and (ii) appoint(s) WILLIAM S.
IVANS, CHARLES A. SCHWAN and JOHN H. ALLEN 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> <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>
FRANK W. DAVIS HARRY L. CASARI
(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)
<PAGE> 18
2. APPROVAL OF THE COHU, INC. 1997 EMPLOYEE STOCK PURCHASE PLAN.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF THE COHU, INC. 1996 OUTSIDE DIRECTORS STOCK OPTION PLAN.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. 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:
___________________________, 1997
_________________________________
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
name 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.
