Note 8 - Subsequent Event	3 Months Ended
Mar. 31, 2018
Notes to Financial Statements
Subsequent Events [Text Block]	8. Subsequent Event On May 8, 2018, we announced that we entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 7, 2018, by and among Cohu, Inc., a Delaware corporation (“Cohu”), Xavier Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Cohu (the “Merger Sub”) and Xcerra Corporation, a Massachusetts corporation (“Xcerra”). Under the terms of the Merger Agreement, the acquisition of Xcerra will be accomplished through a merger of Merger Sub with and into Xcerra (the “Merger”), with Xcerra surviving the Merger as a wholly-owned subsidiary of Cohu. At the effective time of the Merger, each share of Xcerra’s common stock (“Xcerra Common Stock”) issued and outstanding immediately prior to the Merger (other than dissenting shares and shares held by Cohu, Merger Sub, Xcerra or any of their respective subsidiaries) will be converted into the right to receive (i) $9.00 in cash, without interest, (the “Cash Consideration”) and (ii) 0.2109 of a validly issued, fully paid and nonassessable share of common stock of Cohu (“Cohu Common Stock”) (the “Stock Consideration” and, together with the Cash Consideration, the “Merger Consideration”). Pursuant to the Merger Agreement, each outstanding Xcerra restricted stock unit (a “Xcerra Restricted Stock Unit”) that will either (i) vest automatically according to its terms at the effective time of the Merger, or (ii) is held by members of Xcerra’s board of directors, will be cancelled and converted into the right to receive the Merger Consideration. All Xcerra Restricted Stock Units not described in the preceding sentence that are outstanding and unvested at the effective time of the Merger will be converted into equivalent restricted stock unit awards in respect of Cohu Common Stock using a customary exchange ratio equivalent to the Merger Consideration. Our Board of Directors has unanimously approved the Merger Agreement. Our stockholders will be asked to vote on the issuance of Cohu Common Stock in the Merger at a special stockholders meeting that will be held on a date to be announced. The closing of the Merger is subject to the adoption of the Merger Agreement by the affirmative vote of two -thirds of the outstanding shares of common stock of Xcerra entitled to vote at the special stockholders meeting. We currently expect the Merger, which is subject to stockholder and regulatory approvals, and other customary closing conditions, to close by the end of 2018. The Merger Agreement contains certain customary termination rights, including, among others, (i) the right of either Cohu or Xcerra to terminate the Merger Agreement if Xcerra’s stockholders fail to adopt the Merger Agreement, or if Cohu’s shareholders fail to approve the issuance of Cohu Common Stock, (ii) the right of either party to terminate the Merger Agreement if the board of directors of the other party changes its recommendation, (iii) the right of Xcerra to terminate the Merger Agreement to accept a superior proposal (subject to the payment of a termination fee as described further below) (iv) the right of either Cohu or Xcerra to terminate the Merger Agreement if the Merger has not occurred by November 7, 2018 ( the “Termination Date”, which date the Merger Agreement provides to be extended by either party to May 7, 2019 under certain circumstances) and (v) the right of either party to terminate the Merger Agreement due to a material breach by the other party of any of its representations, warranties or covenants, subject to certain conditions. The Merger Agreement provides for Xcerra to pay to Cohu a termination fee of $22.8 million if the Merger Agreement is terminated (i) by Cohu as a result of the Xcerra board of directors changing its recommendation that Xcerra stockholders adopt the Merger Agreement or if the Merger Agreement is terminated by Xcerra to accept a superior proposal; (ii) as a result of Xcerra stockholder approval not being obtained or the Merger not being consummated by the Termination Date, where a competing proposal was publicly disclosed and not publicly, irrevocably withdrawn prior to Xcerra stockholder meeting or the termination of the Merger Agreement as a result of the Merger not being consummated by the Termination Date, as applicable, and Xcerra subsequently consummates a competing proposal within twelve months of such termination or Xcerra enters into a definitive agreement for a competing proposal within such twelve month period and such competing proposal is subsequently consummated; or (iii) by Cohu if Xcerra is in breach of a representation, warranty or covenant that would cause the closing conditions to fail, and the breach cannot be cured within 20 calendar days, so long as Cohu has not materially breached the Merger Agreement. The Merger Agreement provides for Cohu to pay to Xcerra a termination fee of $22.8 million if the Merger Agreement is terminated by Xcerra (i) if Cohu is in breach of a representation, warranty or covenant that would cause the closing conditions to fail, and the breach cannot be cured within 20 calendar days, so long as Xcerra has not materially breached the Merger Agreement or (ii) if the Cohu board of directors changes its recommendation that the Cohu shareholders approve the issuance of Cohu Common Stock. The Merger Agreement further provides for Cohu to pay to Xcerra a termination fee of $45 million if the Merger Agreement is terminated by Xcerra if, upon the satisfaction of closing conditions and the expiration of a marketing period in connection with Cohu’s debt financing, Cohu fails to consummate the Merger within five business days following written notice from Xcerra to Cohu in the form described in the Merger Agreement. Cohu has obtained debt financing commitments for the transactions contemplated by the Merger Agreement. Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, has committed to capitalize Cohu to fund the transaction. The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to Cohu’s Current Report on Form 8 K filed with the SEC on May 8, 2018.

Subsequent Event

May 8, 2018,

we announced that we entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of

May 7, 2018,

by and among Cohu, Inc., a Delaware corporation (“Cohu”), Xavier Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Cohu (the “Merger Sub”) and Xcerra Corporation, a Massachusetts corporation (“Xcerra”). Under the terms of the Merger Agreement, the acquisition of Xcerra will be accomplished through a merger of Merger Sub with and into Xcerra (the “Merger”), with Xcerra surviving the Merger as a wholly-owned subsidiary of Cohu.

At the effective time of the Merger, each share of Xcerra’s common stock (“Xcerra Common Stock”) issued and outstanding immediately prior to the Merger (other than dissenting shares and shares held by Cohu, Merger Sub, Xcerra or any of their respective subsidiaries) will be converted into the right to receive (i)

$9.00

in cash, without interest, (the “Cash Consideration”) and (ii)

0.2109

of a validly issued, fully paid and nonassessable share of common stock of Cohu (“Cohu Common Stock”) (the “Stock Consideration” and, together with the Cash Consideration, the “Merger Consideration”).

Pursuant to the Merger Agreement, each outstanding Xcerra restricted stock unit (a “Xcerra Restricted Stock Unit”) that will either (i) vest automatically according to its terms at the effective time of the Merger, or (ii) is held by members of Xcerra’s board of directors, will be cancelled and converted into the right to receive the Merger Consideration. All Xcerra Restricted Stock Units

not

described in the preceding sentence that are outstanding and unvested at the effective time of the Merger will be converted into equivalent restricted stock unit awards in respect of Cohu Common Stock using a customary exchange ratio equivalent to the Merger Consideration.

Our Board of Directors has unanimously approved the Merger Agreement. Our stockholders will be asked to vote on the issuance of Cohu Common Stock in the Merger at a special stockholders meeting that will be held on a date to be announced. The closing of the Merger is subject to the adoption of the Merger Agreement by the affirmative vote of

two

-thirds of the outstanding shares of common stock of Xcerra entitled to vote at the special stockholders meeting. We currently expect the Merger, which is subject to stockholder and regulatory approvals, and other customary closing conditions, to close by the end of

2018.

The Merger Agreement contains certain customary termination rights, including, among others, (i) the right of either Cohu or Xcerra to terminate the Merger Agreement if Xcerra’s stockholders fail to adopt the Merger Agreement, or if Cohu’s shareholders fail to approve the issuance of Cohu Common Stock, (ii) the right of either party to terminate the Merger Agreement if the board of directors of the other party changes its recommendation, (iii) the right of Xcerra to terminate the Merger Agreement to accept a superior proposal (subject to the payment of a termination fee as described further below) (iv) the right of either Cohu or Xcerra to terminate the Merger Agreement if the Merger has

not

occurred by

November 7, 2018 (

the “Termination Date”, which date the Merger Agreement provides to be extended by either party to

May 7, 2019

under certain circumstances) and (v) the right of either party to terminate the Merger Agreement due to a material breach by the other party of any of its representations, warranties or covenants, subject to certain conditions.

The Merger Agreement provides for Xcerra to pay to Cohu a termination fee of

$22.8

million if the Merger Agreement is terminated (i) by Cohu as a result of the Xcerra board of directors changing its recommendation that Xcerra stockholders adopt the Merger Agreement or if the Merger Agreement is terminated by Xcerra to accept a superior proposal; (ii) as a result of Xcerra stockholder approval

not

being obtained or the Merger

not

being consummated by the Termination Date, where a competing proposal was publicly disclosed and

not

publicly, irrevocably withdrawn prior to Xcerra stockholder meeting or the termination of the Merger Agreement as a result of the Merger

not

being consummated by the Termination Date, as applicable, and Xcerra subsequently consummates a competing proposal within

twelve

months of such termination or Xcerra enters into a definitive agreement for a competing proposal within such

twelve

month period and such competing proposal is subsequently consummated; or (iii) by Cohu if Xcerra is in breach of a representation, warranty or covenant that would cause the closing conditions to fail, and the breach cannot be cured within

calendar days, so long as Cohu has

not

materially breached the Merger Agreement.

The Merger Agreement provides for Cohu to pay to Xcerra a termination fee of

$22.8

million if the Merger Agreement is terminated by Xcerra (i) if Cohu is in breach of a representation, warranty or covenant that would cause the closing conditions to fail, and the breach cannot be cured within

calendar days, so long as Xcerra has

not

materially breached the Merger Agreement or (ii) if the Cohu board of directors changes its recommendation that the Cohu shareholders approve the issuance of Cohu Common Stock. The Merger Agreement further provides for Cohu to pay to Xcerra a termination fee of

$45

million if the Merger Agreement is terminated by Xcerra if, upon the satisfaction of closing conditions and the expiration of a marketing period in connection with Cohu’s debt financing, Cohu fails to consummate the Merger within

five

business days following written notice from Xcerra to Cohu in the form described in the Merger Agreement.

Cohu has obtained debt financing commitments for the transactions contemplated by the Merger Agreement. Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, has committed to capitalize Cohu to fund the transaction.

The foregoing description of the Merger and the Merger Agreement does

not

purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit

2.1

to Cohu’s Current Report on Form

K filed with the SEC on

May 8, 2018.