-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DeOFiwiqt4XVJ2NuX7cyVDuntJzXBiNjIaFL7ZGShh7+6BOoTmtTEz8vyNq9iRyD X76jo5MsGLFpgeqFk4lKcg== /in/edgar/work/0000893220-00-001172/0000893220-00-001172.txt : 20001026 0000893220-00-001172.hdr.sgml : 20001026 ACCESSION NUMBER: 0000893220-00-001172 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20001025 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CERPROBE CORP CENTRAL INDEX KEY: 0000725259 STANDARD INDUSTRIAL CLASSIFICATION: [3679 ] IRS NUMBER: 860312814 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-34824 FILM NUMBER: 745311 BUSINESS ADDRESS: STREET 1: 1150 NORTH FIESTA BLVD CITY: GILBERT STATE: AZ ZIP: 85233-2237 BUSINESS PHONE: 4803331500 MAIL ADDRESS: STREET 1: 600 S ROCKFORD DR CITY: TEMPE STATE: AZ ZIP: 85281 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KULICKE & SOFFA INDUSTRIES INC CENTRAL INDEX KEY: 0000056978 STANDARD INDUSTRIAL CLASSIFICATION: [3559 ] IRS NUMBER: 231498399 STATE OF INCORPORATION: PA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 2101 BLAIR MILL RD CITY: WILLOW GROVE STATE: PA ZIP: 19090 BUSINESS PHONE: 2157846000 MAIL ADDRESS: STREET 1: 2101 BLAIR MILL RD CITY: WILLOW GROVE STATE: PA ZIP: 19090 SC TO-T 1 w41645scto-t.txt CERPROBE CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE TO (Rule 14d-100) Tender Offer Statement Under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934 CERPROBE CORPORATION (Name of Subject Company (Issuer)) CARDINAL MERGER SUB., INC., a Wholly-Owned Subsidiary of KULICKE AND SOFFA INDUSTRIES, INC. (Name of Filing Person (Offeror)) Common Stock Par Value $.05 (Title of Class of Securities) 156787103 (CUSIP Number of Class of Securities) Clifford G. Sprague Senior Vice President and Chief Financial Officer 2101 Blair Mill Road Willow Grove, PA 19090 (215) 784-6000 With a copy to: F. Douglas Raymond Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 (215) 988-2700 (Name, Address, and Telephone of Person Authorized to Receive Notices and Communications on Behalf of Filing Person) Calculation of Filing Fee
Transaction valuation* Amount of filing fee $214,840,660 $42,968.13
* Estimated for purposes of calculating the filing fee only. The filing fee calculation assumes the purchase of all 9,489,760 shares of common stock of Cerprobe Corporation outstanding on September 30, 2000 at a purchase price of $20.00 cash per share. The transaction value also includes the offer price of $20.00 per share multiplied by the number of outstanding options on September 30, 2000, which was 1,252,273. The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, is 1/50th of one percent of the aggregate transaction value. 2 [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Form or Registration No.: N/A Filing Party: N/A Date Filed: N/A [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third-party tender offer subject to Rule 14d-1. [ ] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] This Tender Offer Statement on Schedule TO relates to the offer by Cardinal Merger Sub., Inc., a Delaware corporation ("Merger Sub") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Parent"), to purchase all of the outstanding shares of common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares") of Cerprobe Corporation, a Delaware corporation (the "Company"), at a price of $20.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 25, 2000 (the "Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of which is attached hereto as Exhibit (a)(2) (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). The information in the Offer to Purchase, including all schedules and annexes thereto, is hereby incorporated by reference in response to all the items of this Schedule TO, except as otherwise set forth below. Item 10. Financial Statements. (a) Financial information. Not applicable. (b) Pro forma information. Not applicable. Item 11. Additional Information. -2- 3 (b) Other material information. The information set forth in the Letter of Transmittal attached hereto as Exhibit (a)(2) is incorporated herein by reference. Item 12. Exhibits. Material to be filed as exhibits to this Schedule TO: (a)(1) Offer to Purchase, dated October 25, 2000. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(5) Form of Letter to brokers, dealers, commercial banks, trust companies and other nominees. (a)(6) Form of Letter for use by brokers, dealers, commercial banks, trust companies and other nominees. (a)(7) Summary newspaper advertisement as published in The Wall Street Journal on October 25, 2000. (a)(8) Press Release dated October 25, 2000. Exhibit (b) Amended and Restated Loan Agreement between Kulicke and Soffa Industries, Inc. and PNC Bank, N.A., dated March 26, 1998, filed as Exhibit 10(a) to Kulicke and Soffa Industries, Inc.'s quarterly report on Form 10-Q for the quarterly period ended March 31, 1998, and incorporated herein by reference. Exhibit (d)(1) Agreement and Plan of Merger, dated as of October 11, 2000, by and among Kulicke and Soffa Industries, Inc., Cardinal Merger Sub.,Inc. and Cerprobe Corporation. Exhibit (d)(2) Stock Option Agreement, dated October 11, 2000, by and among Kulicke and Soffa Industries, Inc., Cardinal Merger Sub., Inc. and Cerprobe Corporation. Exhibit (d)(3) Form of Affiliate Tender Agreement, dated as of October 11, 2000, between Kulicke and Soffa Industries, Inc. and certain stockholders of Cerprobe Corporation, filed as Exhibit 4 to Kulicke and Soffa Industries, Inc.'s Schedule 13D filed on October 23, 2000, and incorporated herein by reference. Exhibit (g) Not applicable. Exhibit (h) Not applicable. Item 13. Information Required by Schedule 13E-3. Not applicable. -3- 4 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: October 25, 2000 KULICKE AND SOFFA INDUSTRIES, INC. By: /s/ Clifford G. Sprague _______________________________ Name: Clifford G. Sprague Title: Chief Financial Officer CARDINAL MERGER SUB., INC. By: /s/ Clifford G. Sprague _______________________________ Name: Clifford G. Sprague Title: Vice President -4- 5 INDEX TO EXHIBITS (a)(1) Offer to Purchase, dated October 25, 2000. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(5) Form of Letter to brokers, dealers, commercial banks, trust companies and other nominees. (a)(6) Form of Letter for use by brokers, dealers, commercial banks, trust companies and other nominees. (a)(7) Summary newspaper advertisement as published in The Wall Street Journal on October 25, 2000. (a)(8) Press release dated October 25, 2000. (b) Amended and Restated Loan Agreement between Kulicke and Soffa Industries Inc., and PNC Bank, N.A., dated March 26, 1998, filed as Exhibit 10(a) to Kulicke and Soffa Industries, Inc.'s quarterly report on Form 10-Q for the quarterly period ended March 31, 1998, and incorporated herein by reference. (d)(1) Agreement and Plan of Merger, dated as of October 11, 2000, by and among Kulicke and Soffa Industries, Inc., Cardinal Merger Sub., Inc., and Cerprobe Corporation, (d)(2) Stock Option Agreement, dated October 11, 2000, by and among Kulicke and Soffa Industries, Inc., Cardinal Merger Sub. Inc. and Cerprobe Corporation. (d)(3) Form of Affiliate Tender Agreement, dated as of October 11, 2000, between Kulicke and Soffa Industries, Inc. and certain stockholders of Cerprobe Corporation, filed as Exhibit 4 to Kulicke and Soffa Industries, Inc.'s Schedule 13D filed on October 23, 2000, and incorporated herein by reference. EX-99.(A)(1) 2 w41645ex99-a1.txt OFFER TO PURCHASE 1 OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) OF CERPROBE CORPORATION AT $20 NET PER SHARE BY CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.05 PER SHARE (THE "COMMON STOCK"), TOGETHER WITH THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK (THE "RIGHTS" AND, COLLECTIVELY WITH THE COMMON STOCK, THE "SHARES"), OF CERPROBE CORPORATION (THE "COMPANY"), REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES. THE CONSUMMATION OF THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS DESCRIBED IN THIS OFFER TO PURCHASE. SEE SECTION 13. THE OFFER IS BEING MADE UNDER AN AGREEMENT AND PLAN OF MERGER, DATED AS OF OCTOBER 11, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG KULICKE AND SOFFA INDUSTRIES, INC., CARDINAL MERGER SUB., INC. AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE AT A MEETING HELD ON OCTOBER 11, 2000, DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER (EACH AS DEFINED IN THIS OFFER TO PURCHASE) ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, APPROVED THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND APPROVED THE MERGER AGREEMENT. THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER. IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares should (1) complete and sign the Letter of Transmittal or a facsimile of the letter in accordance with the instructions in the Letter of Transmittal, including any required signature guarantees, and mail or deliver the Letter of Transmittal or such facsimile with such stockholder's certificate(s) for the tendered Shares and any other required documents to the Depositary named in this Offer to Purchase, (2) follow the procedures for book-entry tender of Shares described in Section 3, or (3) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender Shares so registered. The Rights are presently evidenced by the certificates for the Common Stock and a tender by a stockholder of such stockholder's Shares will also constitute a tender of the associated Rights. Unless the context otherwise requires, all references to Shares in this Offer to Purchase shall include the associated Rights. A stockholder of the Company who desires to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply with the procedure for book-entry transfer on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent or the Dealer Manager. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee. The Dealer Manager for the Offer is: [GEORGESON SHAREHOLDER LOGO] October 25, 2000 2 SUMMARY TERM SHEET This summary highlights important information from this Offer to Purchase but does not purport to be complete. To fully understand the offer described in this document and for a more complete description of the terms of the offer, you should read carefully this entire Offer to Purchase and the Letter of Transmittal, which together, as they may be amended and supplemented, constitute the "Offer." We have included section references to direct you to a more complete description of the topics contained in this summary. - - WHO IS OFFERING TO BUY MY SECURITIES? Our name is Cardinal Merger Sub., Inc. We are a Delaware corporation and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc. formed for the purpose of making this tender offer for all the outstanding Shares. See Section 9 of this document for more information about us and Kulicke and Soffa Industries, Inc. - - WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER? We are offering to buy all of the outstanding Shares, including the associated Rights, of Cerprobe Corporation. See the "Introduction" and Section 1 of this document for more information about the terms of the Offer, and Section 13 of this document for more information about the conditions to which the Offer is subject. - - HOW MUCH IS CARDINAL MERGER SUB., INC. OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT? We are offering to pay $20 in cash for each Share, including the associated Rights, of Cerprobe Corporation. See the "Introduction" and Section 1 of this document for more information about the terms of the Offer. - - DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Yes. Kulicke and Soffa Industries, Inc., our parent, will be financing the Offer described in this document with funds provided by Kulicke and Soffa Industries, Inc. See Section 12 of this document for more information about how Kulicke and Soffa Industries, Inc. will finance the Offer. - - ARE KULICKE AND SOFFA INDUSTRIES, INC.'S FINANCIAL RESULTS RELEVANT TO MY DECISION AS TO WHETHER TO TENDER IN THE OFFER? Because the Offer is for cash and is not subject to any financing condition, Kulicke and Soffa Industries, Inc.'s financial results should not be relevant to your decision on whether to tender your Shares in the Offer. - - HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE INITIAL OFFERING PERIOD? You may tender your Shares into the Offer until 12:00 midnight, New York City time, on Tuesday, November 21, 2000, which is the scheduled expiration date of the offering period, unless we decide to extend the offering period or provide a subsequent offering period. See Sections 1 and 3 of this document for more information about tendering your Shares. - - CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES? Yes, we can elect to extend the Offer (1) on one or more occasions, each for a period not longer than 5 business days at any one time and not longer than 10 business days in total, if on November 21, 2000 (A) any of the conditions to our obligations to accept for payment and pay for the Shares shall not have been satisfied or waived, or (B) a number of Shares representing at least a majority but less than 90% of the total number of outstanding Shares shall have then been validly tendered and not withdrawn, or (2) for any period required by any rule, regulation, interpretation or position of the Securities and i 3 Exchange Commission (the "SEC") applicable to the Offer. See Section 1 of this document for more information about extensions of the Offer. - - HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? We will announce by press release any extension of the Offer no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. See Section 1 of this document for more information about extension of the Offer. - - WILL THERE BE A SUBSEQUENT OFFERING PERIOD? Following the satisfaction or waiver of all the conditions to the Offer and the acceptance of and payment for all the Shares tendered during the offering period, we may elect to provide a subsequent offering period, although we currently have no intention to do so. If we decide to provide a subsequent offering period, we will publicly disclose our intentions by issuing a press release no later than 9:00 a.m., New York City time, on the next business day after the expiration date of the initial offering period. Any such press release will state the approximate number of Shares tendered to date. See Section 1 of this document for more information about subsequent offering periods. - - WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? The Offer is conditioned upon, among other things, at least a majority of the total number of outstanding Shares being validly tendered and not withdrawn and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Offer is also subject to other conditions. See Section 13 of this document for more information on all of the conditions to which the Offer is subject. - - HOW DO I TENDER MY SHARES? If you hold the certificates for your Shares, you should complete the enclosed Letter of Transmittal and enclose all the documents required by it, including your certificates, and send them to the Depositary at the address listed on the back cover of this document. If your broker holds your Shares for you in nominee or "street" name you must instruct your broker to tender your Shares on your behalf. In any case, the Depositary must receive all required documents before 12:00 midnight, New York City time, on Tuesday, November 21, 2000, which is the expiration date of the Offer, unless we decide to extend the Offer. If you cannot comply with any of these procedures, you still may be able to tender your Shares by using the guaranteed delivery procedures described in Section 3 of this document. See Section 3 of this document for more information on the procedures for tendering your Shares. - - UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES? You may withdraw the tender of your Shares at any time before the expiration date of the offering period, including any extensions. There will, however, be no withdrawal rights for Shares tendered during any subsequent offering period. See Section 4 of this document for more information on withdrawing your previously tendered Shares. - - HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? You (or your broker or bank if your Shares were held in nominee or "street" name), must notify the Depositary at the address and telephone number listed on the back cover of this Offer to Purchase, and this notice must include the name of the stockholder that tendered the Shares, the number of Shares to be withdrawn and the name in which the tendered Shares are registered. See Section 4 of this document for more information about the procedures for withdrawing your previously tendered Shares. ii 4 - - WHAT DOES MY BOARD OF DIRECTORS THINK OF THE OFFER? THE BOARD OF DIRECTORS OF CERPROBE CORPORATION, BY UNANIMOUS VOTE AT A MEETING HELD ON OCTOBER 11, 2000, DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTEREST OF, THE STOCKHOLDERS OF CERPROBE CORPORATION, APPROVED THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND APPROVED THE MERGER AGREEMENT. THE BOARD OF DIRECTORS RECOMMENDS THAT CERPROBE CORPORATION STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER. SEE THE "INTRODUCTION" AND SECTION 10 OF THIS DOCUMENT FOR MORE INFORMATION ON YOUR DIRECTORS' ACTIONS REGARDING THE MERGER AGREEMENT. - - IF YOU CONSUMMATE THE TENDER OFFER, WHAT ARE YOUR PLANS WITH RESPECT TO SHARES THAT ARE NOT TENDERED IN THE OFFER? If we purchase at least a majority of the Shares in the Offer, we intend to cause a merger to occur between ourselves and Cerprobe Corporation in which stockholders who have not previously tendered their Shares will also receive $20 in cash, subject to their right under Delaware law to dissent and demand the fair cash value of their Shares. If a majority of the Shares are not tendered to us in the Offer, we do not presently intend to acquire any Shares. See Section 11 of this document about our plans following our purchase of Shares in the Offer with respect to Shares not tendered in the Offer. - - IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? Our purchase of the Shares will reduce the number of the Shares that might otherwise trade publicly and may reduce the number of holders of the Shares, which could adversely affect the liquidity and market value of the remaining Shares held by the public. The Shares may also cease to be quoted on the Nasdaq Stock Market. Also, Cerprobe Corporation may cease being required to comply with the SEC's filing requirements and other rules relating to publicly held companies. See Section 7 of this document for more information about the effect of the Offer on your Shares. - - WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? On October 11, 2000, the last full trading day before the public announcement of the Offer and the Merger, the reported closing price of the Common Stock on the Nasdaq Stock Market was $12.50 per Share. On October 24, 2000, the last full trading day for which prices were available before the commencement of the Offer, the reported closing price of the Common Stock on the Nasdaq Stock Market was $19.6875 per Share. You should obtain a recent market quotation for your Shares in deciding whether to tender them. See Section 6 of this document for recent high and low sales prices for the Shares. - - WHO IS RESPONSIBLE FOR THE PAYMENT OF TAXES AND BROKERAGE FEES? Stockholders of record who tender Shares directly will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of the Shares by us under the Offer. However, any tendering stockholder or other payee who fails to complete and sign the Substitute Form W-9 included in the Letter of Transmittal may be subject to backup federal income tax withholding of 31% of the gross proceeds payable to such stockholder or other payee under the Offer. See Section 3. Stockholders who hold their Shares through a broker, bank or other nominee should check with such institution as to whether they charge any service fees. - - WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? If you have any questions you can call the Information Agent, Corporate Investor Communications, Inc. at (888) 682-7239 (toll free) or the Dealer Manager, Georgeson Shareholder Securities Corporation at (800) 445-1790 (toll free). See the back cover of this Offer to Purchase. iii 5 TABLE OF CONTENTS
SECTION PAGE - ------- ---- SUMMARY TERM SHEET.................................................... i INTRODUCTION.......................................................... 1 1. Terms of the Offer.......................................... 2 2. Acceptance for Payment and Payment for the Shares........... 5 3. Procedure for Tendering Shares.............................. 5 4. Rights of Withdrawal........................................ 8 5. Certain Federal Income Tax Consequences of the Offer........ 9 6. Price Range of the Shares................................... 10 7. Effect of the Offer on the Market for the Shares; Stock Quotation, Margin Regulations and Exchange Act Registration................................................ 10 8. Certain Information Concerning the Company.................. 11 9. Certain Information Concerning Parent and the Merger Sub.... 13 10. Background of the Offer; Contacts with the Company.......... 14 11. Purpose of the Offer; Plans for the Company; the Merger..... 16 12. Source and Amount of Funds.................................. 31 13. Certain Conditions of the Offer............................. 31 14. Dividends and Distributions................................. 33 15. Certain Legal Matters....................................... 34 16. Fees and Expenses........................................... 35 17. Miscellaneous............................................... 35 SCHEDULE A INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF KULICKE AND SOFFA INDUSTRIES, INC. AND THE MERGER SUB..... A-1
iv 6 TO THE STOCKHOLDERS OF CERPROBE CORPORATION: INTRODUCTION Cardinal Merger Sub., Inc., a Delaware corporation (the "Merger Sub") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Parent"), hereby offers to purchase all of the outstanding shares of Common Stock, par value $0.05 per share (the "Common Stock"), of Cerprobe Corporation, a Delaware corporation (the "Company"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights") issued under the Rights Agreement, dated as of September 28, 1998 (the "Rights Agreement"), between the Company and Computershare Trust Company, Inc. (as successor in interest to American Securities Transfer & Trust, Inc.), as amended by the First Amendment thereto dated October 11, 2000 (the Common Stock and the Rights are together referred to as the "Shares"), at $20 per Share, net to the seller in cash (including any higher price per share that may be paid in the Offer, the "Common Stock Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements, collectively constitute the "Offer"). Tendering stockholders who are record holders of their Shares and tender directly to Harris Trust Company of New York (the "Depositary") will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of the Shares by the Merger Sub under the Offer. Stockholders who hold their Shares through a broker or bank should consult such institution as to whether it will charge any service fees. The Merger Sub will pay all charges and expenses of Georgeson Shareholder Securities Corporation, as dealer manager (the "Dealer Manager"), the Depositary and Corporate Investor Communications, Inc. (the "Information Agent"). Unless the context requires otherwise, all references to the Shares in this Offer to Purchase shall also include the associated Rights, and all references to the Rights shall include all benefits that may inure to the holders of the Rights under the Rights Agreement. The Offer is being made under an Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 11, 2000, among Parent, the Merger Sub and the Company, in accordance with which, and subject to its terms and conditions, at the Effective Time (as defined below) in accordance with the Delaware General Corporation Law (the "DGCL"), the Merger Sub will be merged with and into the Company and the separate existence of the Merger Sub will cease (the "Merger"). The Company thereafter will continue its existence under the laws of the State of Delaware. As a result of the Merger, the Company (sometimes referred to herein as the "Surviving Corporation") will become a wholly owned subsidiary of Parent. The Merger will become effective (i) upon the filing of a certificate of merger with the Secretary of State of the State of Delaware under the DGCL or (ii) at such later time as may be stated in such filing (such time, the "Effective Time"). In the Merger, each issued and outstanding Share not owned by Parent or any subsidiary of Parent (including the Merger Sub) or held in treasury by the Company or any subsidiary of the Company, other than Shares, if any, that are held by stockholders who are entitled to and who properly exercise dissenters' rights under Section 262 of the DGCL, will, by virtue of the Merger and without any action on the part of the holder, be converted into the right to receive, without interest, an amount in cash equal to the Common Stock Price (the "Merger Consideration"). Simultaneously with the execution of the Merger Agreement, Parent and the Company entered into a Stock Option Agreement (the "Stock Option Agreement") pursuant to which the Company granted Parent an option, exercisable in certain circumstances following termination of the Merger Agreement, to purchase from time to time up to that number of Shares equal to 19.9% of the total Shares outstanding on October 11, 2000. In addition, Parent and eight stockholders of the Company entered into separate Affiliate Tender Agreements (the "Affiliate Tender Agreements") pursuant to which, among other things, such stockholders agreed to tender all of their Shares into the Offer and otherwise to support the Merger. THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD"), BY UNANIMOUS VOTE AT A MEETING HELD ON OCTOBER 11, 2000, DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE 7 BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, APPROVED THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND APPROVED THE MERGER AGREEMENT. THE COMPANY BOARD RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER. BANC OF AMERICA SECURITIES LLC, FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED TO THE COMPANY BOARD ITS OPINION, DATED OCTOBER 11, 2000, TO THE EFFECT THAT, AS OF SUCH DATE, AND BASED ON AND SUBJECT TO THE MATTERS SET FORTH THEREIN, THE $20.00 PER SHARE IN CASH TO BE RECEIVED BY HOLDERS OF THE SHARES IN THE OFFER AND THE MERGER IS FAIR FROM A FINANCIAL POINT OF VIEW TO SUCH HOLDERS. A COPY OF THIS OPINION IS ATTACHED AS AN EXHIBIT TO THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"), WHICH HAS BEEN FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") IN CONNECTION WITH THE OFFER AND WHICH IS BEING MAILED TO STOCKHOLDERS TOGETHER WITH THIS OFFER TO PURCHASE. STOCKHOLDERS ARE URGED TO READ THE OPINION IN ITS ENTIRETY FOR A DESCRIPTION OF THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS OF THE REVIEW UNDERTAKEN BY BANC OF AMERICA SECURITIES LLC. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES (THE "MINIMUM CONDITION") AND THE APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED OR HAVING BEEN TERMINATED. THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 13. ACCORDING TO THE COMPANY, AS OF SEPTEMBER 30, 2000 THERE WERE 9,489,760 SHARES OUTSTANDING AND THERE WERE 1,252,273 ADDITIONAL SHARES RESERVED FOR FUTURE ISSUANCE UNDER GRANTS MADE UNDER THE COMPANY'S STOCK OPTION AND INCENTIVE PLANS. BASED ON SUCH INFORMATION (IF NO ADDITIONAL OPTIONS WERE EXERCISED AFTER THAT DATE), THE MINIMUM CONDITION WOULD BE SATISFIED IF 4,744,881 SHARES WERE VALIDLY TENDERED AND NOT WITHDRAWN. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND THEY SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions set forth in the Offer (including the terms and conditions set forth in Section 13 (the "Offer Conditions") and, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Merger Sub will accept for payment, and pay for, all Shares validly tendered on or before the Expiration Date, as defined herein, and not withdrawn as permitted by Section 4. The term "Expiration Date" means 12:00 Midnight, New York City time, on November 21, 2000, unless and until the Merger Sub shall have extended the period for which the Offer is open in accordance with the Merger Agreement, in which event the term "Expiration Date" will mean the latest time and date on which the Offer, as so extended by the Merger Sub, will expire. The period from the date hereof until 12:00 Midnight, New York City time, on November 21, 2000, as such period may be extended, is referred to as the "Offering Period." The Merger Sub may elect, in its sole discretion, to provide a subsequent offering period of three to twenty business days (the "Subsequent Offering Period"). For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. A Subsequent Offering Period, if one is provided, would not be an extension of the Offering Period. A Subsequent Offering Period would be an additional period of time, following the expiration of the Offering Period, in which stockholders could tender Shares not tendered during the Offering Period. Any decision to provide a Subsequent Offering Period will be announced no later than 9:00 a.m., New York City time, on the next business day after the expiration of the Offering Period. If the Merger Sub elects to provide a Subsequent Offering Period, it expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the Subsequent Offering Period, not beyond a total of 20 business days, by giving oral or written notice of such 2 8 extension to the Depositary. The Merger Sub will announce the approximate number and percentage of the Shares deposited as of the expiration of the Offering Period no later than 9:00 a.m., New York City time, on the next business day following the expiration of the Offering Period, and such Shares, subject to the satisfaction or waiver of all of the Offer conditions, will be immediately accepted and promptly paid for. All Offer Conditions must be satisfied or waived before the commencement of any Subsequent Offering Period, and the Offer Conditions shall not apply to any Subsequent Offering Period. The Rights presently are transferable only with the certificates for the Shares, and the surrender for transfer of certificates for any Shares also constitutes the transfer of the Rights associated with the Shares represented by such certificates. As required by the Merger Agreement, the Company has taken all necessary action so that as a result of the Offer and the Merger no Rights will be entitled to be exercised, distributed or triggered. The Offer is conditioned upon the satisfaction of the Minimum Condition, the expiration or termination of the waiting period imposed by the HSR Act, and, in most instances, the other conditions set forth in Section 13. If these conditions are not satisfied at or before the Expiration Date, the Merger Sub reserves the right, subject to the terms of the Merger Agreement and subject to complying with applicable rules and regulations of the SEC, to (i) decline to purchase any Shares tendered in the Offer and terminate the Offer and return all tendered Shares to the tendering stockholders, (ii) waive any or all of the Offer Conditions, other than the Minimum Condition and the condition that the Merger Agreement shall not have been terminated under its terms, which conditions may be waived only with the Company's consent, and, subject to complying with applicable rules and regulations of the SEC, purchase all Shares validly tendered, (iii) subject to the provisions of the next paragraph, extend the Offer and, subject to the right of stockholders to withdraw Shares until the Expiration Date, retain all Shares which have been tendered during the period or periods for which the Offer is extended or (iv) subject to the provisions of next paragraph, amend the Offer. Under the Merger Agreement and the applicable rules of the SEC, the Merger Sub has the right, in its sole discretion, to modify and make changes to the terms and conditions of the Offer, provided that without the prior consent of the Company (which consent will not be valid unless authorized by the Company Board) no modification or change may be made which (i) decreases the consideration payable in the Offer, except as permitted in the Merger Agreement, (ii) changes the form of consideration payable in the Offer (other than by adding consideration), (iii) changes the Minimum Condition, (iv) decreases the maximum number of Shares sought under the Offer, (v) changes the material conditions to the Offer in a manner adverse to the Company or its stockholders or option holders, (vi) imposes additional conditions to the Offer, or, (vii) except as described in the next sentence, extends the Offer if on the initial Expiration Date all of the Offer Conditions have been satisfied or waived. Notwithstanding the foregoing, the Merger Sub may, but is not required under the Merger Agreement or otherwise to, without the consent of the Company, (i) extend the Offer on one or more occasions for such period as may be determined by the Merger Sub in its sole discretion (each such extension period not to exceed 5 business days at a time or an aggregate of 10 business days), if on the initial Expiration Date (A) any of the Offer Conditions shall not be satisfied or waived, or (B) the Minimum Condition has been satisfied but less than 90% of the Shares have been validly tendered and not properly withdrawn, provided, that if the Merger Sub elects to extend the Offer under this subclause (B), then all of the Offer Conditions, other than conditions described in clauses (2) and (3) of Section 13, will be deemed to have been irrevocably waived as of the commencement of such extension, or (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the SEC staff applicable to the Offer. The Offer Conditions are for the benefit of the Merger Sub and may be waived by the Merger Sub (provided that the Merger Sub may not waive the condition that the Merger Agreement shall not have terminated in accordance with its terms or the Minimum Condition without the Company's consent) in whole or in part at any time and from time to time, in its sole discretion to the extent available, although the Merger Sub has no current intention of availing itself of such right. Subject to the terms of the Merger Agreement and applicable rules and regulations of the SEC, the Merger Sub expressly reserves the right, in its sole discretion, at any time or from time to time, to 3 9 (i) extend the period of time during which the Offer is open and thereby delay acceptance for payment of and the payment for any Shares, by giving oral or written notice of such extension to the Depositary and (ii) amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE MERGER SUB EXERCISES ITS RIGHT TO EXTEND THE OFFER. Any extension, delay, waiver, amendment or termination of the Offer will be followed as promptly as practicable by public announcement (which in the case of an extension will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date) under Rules 14d-4(d), 14d-6(c) and 14e-1 under the Securities Exchange Act of 1934 (the "Exchange Act"), which require that material changes be promptly disseminated to holders of Shares. Subject to applicable law and without limiting the obligation of the Merger Sub under such rules or the manner in which the Merger Sub may choose to make any public announcement, the Merger Sub will not have any obligation to publish, advertise or otherwise communicate any such public announcement other than by making a press release or other public announcement. If the Merger Sub extends the Offer, or if the Merger Sub, whether before or after its acceptance for payment of Shares, is delayed in its purchase of, or payment for, Shares or is unable to pay for Shares under the Offer for any reason, then, without prejudice to the Merger Sub's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Merger Sub, and such Shares may not be withdrawn except to the extent tendering security holders are entitled to the withdrawal rights described in Section 4. However, the ability of the Merger Sub to delay the payment for Shares which the Merger Sub has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by, or on behalf of, holders of securities promptly after the termination or withdrawal of the Offer. If the Merger Sub makes a material change in the terms of the Offer (which may require authorization by the Company Board) or in the information concerning the Offer or waives a material condition of the Offer, the Merger Sub will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. In a public release, the SEC has stated its view that an offer must remain open for a minimum period of time following a material change in the terms of such offer and that waiver of a material condition, such as the Minimum Condition, would be a material change in the terms of such offer. The release states that an offer should remain open for a minimum of five business days from the date a material change is first published, or sent or given to securityholders and that, if material changes are made with respect to information that approaches the significance of the offer price and the number of shares being sought, a minimum of 10 business days may be required to allow adequate dissemination and investor response. The requirement to extend the Offer will not apply to the extent that the number of business days remaining between the occurrence of the change and the then scheduled Expiration Date equals or exceeds the minimum extension period that would be required because of such amendment. If, before the Expiration Date, the Merger Sub increases the consideration offered to holders of Shares under the Offer, such increased consideration will be paid to all holders whose Shares are purchased in the Offer, whether or not such Shares were tendered before such increase. The Company has provided the Merger Sub with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of the Shares. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed by the Merger Sub to record holders of the Shares and will be furnished by the Merger Sub to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of the Shares. 4 10 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR THE SHARES. Upon the terms and subject to the conditions of the Offer, including the Offer Conditions and, if the Offer is extended or amended, the terms and conditions of any such extension or amendment, the Merger Sub will accept for payment, and will pay for, all Shares validly tendered and not withdrawn promptly after the expiration of the Offering Period. If there is a Subsequent Offering Period, all Shares tendered during the Subsequent Offering Period will be immediately accepted for payment and paid for as they are tendered. For purposes of the Offer, the Merger Sub will be deemed to have accepted for payment Shares validly tendered and not withdrawn as, if and when the Merger Sub gives oral or written notice to the Depositary of its acceptance for payment of such Shares under the Offer. Payment for any Shares accepted for payment in the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for the purpose of receiving payments from the Merger Sub and transmitting such payments to the tendering stockholders. In all cases, payment for any Shares accepted for payment under the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares, or a timely Book Entry Confirmation, as defined below, with respect thereto, (ii) the Letter of Transmittal, or a manually signed facsimile, properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, as defined below, and (iii) any other documents required by the Letter of Transmittal. Accordingly, payment may be made to tendering stockholders at different times if delivery of the certificates and other required documents occur at different times. The price paid to any holder of the Shares under the Offer will be the highest price per Share paid to any other holder of such Shares under the Offer. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If any tendered Shares are not accepted for payment under the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned, without expense, to the tendering stockholder or to such other person as the tendering stockholder specified in the Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. In the case of any Shares delivered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, as defined below, under the procedures set forth in Section 3, such Shares will be credited to such account maintained at the Book-Entry Transfer Facility as the tendering stockholder specified in the Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. If no such instructions are given with respect to any Shares delivered by book-entry transfer, any such Shares not tendered or not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated in the Letter of Transmittal as the account from which such Shares were delivered. The Merger Sub reserves the right, subject to the terms of the Merger Agreement, to transfer or assign in whole or in part from time to time to one or more direct or indirect subsidiaries of Parent the right to purchase all or any portion of the Shares tendered under the Offer, but any such transfer or assignment will not relieve the Merger Sub of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for any Shares validly tendered and accepted for payment under the Offer. 3. PROCEDURE FOR TENDERING SHARES. VALID TENDER. To tender Shares under the Offer, either (i) a Letter of Transmittal, or a manually signed facsimile, properly completed and duly executed in accordance with the instructions of the Letter of Transmittal, together with any required signature guarantees and certificates for the Shares to be tendered, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents must be received by the Depositary before the Expiration Date or the expiration of any Subsequent Offering Period, 5 11 at one of its addresses set forth on the back cover of this Offer to Purchase or (ii) the tendering stockholder must comply with the guaranteed delivery procedures set forth below. The Rights presently are transferable only with the certificates for the Shares and the surrender for transfer of certificates for any Shares also constitutes the transfer of the Rights associated with the Shares represented by such certificates. As required by the Merger Agreement, the Company has taken all necessary action so that the Offer will not result in the grant of any Rights or enable or require any Rights to be exercised, distributed or triggered. BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect to the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry transfer of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of the Shares may be effected through book-entry transfer, either the Letter of Transmittal, or a manually signed facsimile, properly completed and duly executed, together with any required signature guarantees, or an Agent's Message instead of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Date or by the expiration of any Subsequent Offering Period, or the tendering stockholder must comply with the guaranteed delivery procedures described below. The confirmation of a book-entry transfer of the Shares into the Depositary's account at the Book-Entry Transfer Facility, as described above, is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Merger Sub may enforce such agreement against the participant. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. THE METHOD OF DELIVERY OF ANY SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY, INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT THE STOCKHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. SIGNATURE GUARANTEES. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution, including most commercial banks, savings and loan associations and brokerage houses, that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Exchange Act (each, an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by the registered holder (which term, for purposes of this section, includes any participant in the Book-Entry Transfer Facility's systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith and such registered holder has not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If the certificates for any Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for any Shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, then the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with 6 12 the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1 and 5 of the Letter of Transmittal. GUARANTEED DELIVERY. A stockholder who desires to tender Shares under the Offer and whose certificates for any Shares are not immediately available or who cannot comply with the procedure for book-entry transfer on a timely basis, or who cannot deliver all required documents to the Depositary before the Expiration Date, may tender such Shares by following all of the procedures set forth below: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Merger Sub, is received by the Depositary, as provided below, before the Expiration Date; and (iii) the certificates for all tendered Shares, in proper form for transfer, or a Book-Entry Confirmation with respect to all such Shares, together with a properly completed and duly executed Letter of Transmittal, or a manually signed facsimile, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message instead of the Letter of Transmittal, and any other required documents, are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the Nasdaq Stock Market is open for business. The Notice of Guaranteed Delivery may be delivered by hand to the Depositary or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. OTHER REQUIREMENTS. Notwithstanding any provision of this document, payment for the Shares accepted for payment under the Offer will in all cases be made only after timely receipt by the Depositary of the instruments and documents referred to in Section 2. TENDER CONSTITUTES AN AGREEMENT. The valid tender of any Shares under one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Merger Sub upon the terms and subject to the conditions of the Offer (including the tendering stockholder's rights of withdrawal as described in Section 4). APPOINTMENT. By executing a Letter of Transmittal as set forth above (including delivery through an Agent's Message), the tendering stockholder will (subject to the stockholder's withdrawal rights as described in Section 4) irrevocably appoint designees of the Merger Sub as such stockholder's attorneys- in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Merger Sub and with respect to any and all non-cash dividends, distributions, rights, and other shares of Common Stock or other securities issued or issuable in respect of such Shares on or after October 11, 2000 (collectively, "Distributions"). All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Merger Sub deposits the payment for such Shares with the Depositary. All such powers of attorney and proxies will be irrevocable and will be deemed granted in consideration of the acceptance for payment by the Merger Sub of the Shares tendered in accordance with the terms of the Offer. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such stockholder will be revoked, and no subsequent powers of attorney, proxies and consents may be given, and, if given, will not be deemed effective. The Merger Sub's designees will be empowered to exercise all voting and other rights of such stockholder with respect to such Shares, and any and all Distributions, as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of the stockholders of the Company, with respect to any actions by written consent instead of any such meeting or otherwise. The Merger Sub reserves the right to require that, in order for any Shares to be deemed validly tendered, immediately upon the Merger Sub's depositing the payment for such Shares with the Depositary, the Merger Sub must be able to exercise full voting, consent and other rights with respect to such Shares and any and all Distributions. 7 13 DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of the Shares will be determined by the Merger Sub in its sole discretion, which determination will be final and binding. The Merger Sub reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Merger Sub's counsel, be unlawful. The Merger Sub also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of any Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, the Merger Sub, the Depositary, the Information Agent, the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Merger Sub's interpretation of the terms and conditions of the Offer, including the Letter of Transmittal and Instructions thereto, will be final and binding. BACKUP WITHHOLDING. To avoid "backup withholding" of Federal income tax on payments of cash under the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service may impose a penalty on such stockholder and payment of cash to such stockholder under the Offer may be subject to backup withholding of 31%. All stockholders surrendering Shares under the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding, unless an applicable exemption exists and is proved in a manner satisfactory to the Merger Sub and the Depositary. Certain stockholders, including, among others, all corporations and certain foreign individuals and entities, are not subject to backup withholding. Non-corporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, to avoid backup withholding. See Instruction 8 to the Letter of Transmittal. 4. RIGHTS OF WITHDRAWAL. Tenders of the Shares made under the Offer are irrevocable except that Shares tendered under the Offer may be withdrawn at any time before the expiration of the Offering Period and, unless theretofore accepted for payment by the Merger Sub under the Offer, may also be withdrawn at any time after December 24, 2000. There will be no withdrawal rights during any Subsequent Offering Period for any Shares tendered during the Subsequent Offering Period. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of the Shares to be withdrawn and the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered under the procedures for book-entry tender as set forth in Section 3, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. If certificates for the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares to be withdrawn must also be furnished to the Depositary as aforesaid before the physical release of such certificates. All questions as to the form and validity, including time of receipt, of any notice of withdrawal will be determined by the Merger Sub, in its sole discretion, which determination will be final and binding. None of Parent, the Merger Sub, the Dealer Manager, the Depositary, the Information Agent, or any other person will be under any duty to give 8 14 notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tendered Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 3 at any time before the Expiration Date, or the expiration of any Subsequent Offering Period. If the Merger Sub extends the Offer, is delayed in its acceptance for payment of any Shares, or is unable to accept for payment any Shares under the Offer, for any reason, then, without prejudice to the Merger Sub's rights under this Offer, the Depositary may, nevertheless, on behalf of the Merger Sub, retain tendered Shares, but such Shares may be withdrawn to the extent that tendering stockholders are entitled to withdrawal rights as set forth in this Section 4. However, the ability of the Merger Sub to delay payment for Shares which Merger Sub has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by, or on behalf of, holders of securities promptly after the termination or withdrawal of the Offer. 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER. Sales of the Shares under the Offer and the exchange of the Shares for cash under the Merger will be taxable transactions for Federal income tax purposes and may also be taxable under applicable state, local and other tax laws. For Federal income tax purposes, a stockholder whose Shares are purchased under the Offer or who receives cash as a result of the Merger will realize gain or loss equal to the difference between the adjusted basis of the Shares sold or exchanged and the amount of cash received therefor. Such gain or loss will be capital gain or loss if the Shares were held as capital assets by the stockholder and will be long-term if the Shares have been held for more than 12 months. Long-term capital gain of a non-corporate stockholder is generally subject to a maximum federal income tax rate of 20%. THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO STOCKHOLDERS IN SPECIAL SITUATIONS SUCH AS STOCKHOLDERS WHO RECEIVED THEIR SHARES UPON THE EXERCISE OF STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND STOCKHOLDERS WHO ARE NOT UNITED STATES PERSONS. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL, FOREIGN OR OTHER TAX LAWS. 9 15 6. PRICE RANGE OF THE SHARES. The Shares are listed on the Nasdaq Stock Market under the symbol "CRPB." The following table sets forth, for the calendar quarters indicated, the high and low sales prices per Share on the Nasdaq Stock Market based on public sources:
SALES PRICE -------------- HIGH LOW ---- --- CALENDAR YEAR 1998 First Quarter............................................. $22 $16 1/4 Second Quarter............................................ $20 9/16 $11 5/8 Third Quarter............................................. $12 3/4 $ 9 Fourth Quarter............................................ $15 5/8 $ 9 1999 First Quarter............................................. $17 13/16 $12 3/4 Second Quarter............................................ $12 1/4 $ 7 1/2 Third Quarter............................................. $11 7/8 $ 4 3/4 Fourth Quarter............................................ $10 $ 4 9/16 2000 First Quarter............................................. $16 7/8 $ 7 1/4 Second Quarter............................................ $16 1/2 $ 7 1/4 Third Quarter............................................. $21 $12 1/2
On October 11, 2000, the last full trading day before the public announcement of the Offer and the Merger, the reported closing price on the Nasdaq Stock Market was $12.50 per Share. On October 24, 2000, the last full trading day before commencement of the Offer, the reported closing price was $19.6875 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. During the periods set forth above, the Company did not pay any dividends on its shares of Common Stock. The Merger Agreement and, according to the Company, the Company's revolving credit facility prohibit or otherwise limit the Company's ability to pay dividends on its Shares. See Section 14 for a description of these limitations. 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION, MARGIN REGULATIONS AND EXCHANGE ACT REGISTRATION. MARKET FOR THE SHARES. The purchase of any Shares by the Merger Sub under the Offer will reduce the number of the Shares that might otherwise trade publicly and may reduce the number of holders of the Shares, which could adversely affect the liquidity and market value of the remaining Shares held by the public. STOCK QUOTATION. The Shares are listed on the Nasdaq Stock Market. According to published guidelines of the Nasdaq Stock Market, the Shares would no longer be quoted on the Nasdaq Stock Market if, among other things, the number of publicly held Shares (excluding Shares held directly or indirectly by officers, directors and any person who is a beneficial owner of more than 10% of the Shares) were less than 500,000, the aggregate market value of publicly held Shares were less than $1,000,000 or there were fewer than 300 holders of the Shares in round lots. If these standards were not met, quotations might continue to be published in the over-the-counter "additional list" or one of the "local lists" unless, as set forth in published guidelines of the Nasdaq Stock Market, the number of publicly held Shares were less than 100,000, or there were fewer than 300 holders in total. If the Shares cease to be listed on Nasdaq Stock Market, the market for the Shares could be adversely affected. It is possible that the Shares would be traded on other securities exchanges, with trades published by such exchanges, or in local or regional over-the-counter markets. The extent of the public 10 16 market for the Shares and the availability of such quotations would, however, depend upon the number of holders of Shares and the aggregate market value of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act, as described below, and other factors. MARGIN REGULATIONS. The Shares are presently "margin securities" under the regulations of the Board of Governors of the Federal Reserve Board (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit based on the collateral of such Shares. Depending upon factors similar to those described above regarding listing and market quotations, the Shares might no longer constitute "margin securities" for the purposes of the Federal Reserve Board's margin regulations in which event the Shares would be ineligible as collateral for margin loans made by brokers. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. This registration may be terminated by the Company upon application to the SEC if the outstanding Shares are not listed on a national securities exchange and if there are fewer than 300 holders of record of such shares. Termination of registration of the Shares under the Exchange Act would reduce the information required to be furnished by the Company to its stockholders and to the SEC and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) and the requirement to furnish a proxy statement in connection with stockholders' meetings under Section 14(a) and the related requirement to furnish an annual report to stockholders, no longer applicable with respect to the Shares. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities under Rule 144 under the Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be eligible for listing on the Nasdaq Stock Market or for continued inclusion on the Federal Reserve Board's list of "margin securities." The Merger Sub intends to seek to cause the Company to apply for termination of registration of the Shares as soon as possible after consummation of the Offer if the requirements for termination of registration are met. If registration of the Shares is not terminated before the Merger, then the registration of such Shares under the Exchange Act and the listing of such Shares on the Nasdaq Stock Market will be terminated following the completion of the Merger. 8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from or based upon publicly available documents and records on file with the SEC and other public sources and is qualified in its entirety by reference thereto. Although the Merger Sub, Parent and the Dealer Manager have no knowledge that would indicate that any statements contained herein based on such documents and records are untrue, Parent, the Merger Sub and the Dealer Manager cannot take responsibility for the accuracy or completeness of the information contained in such documents and records, or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to Parent, the Merger Sub or the Dealer Manager. The Company is a leading manufacturer of probe cards, automatic test equipment ("ATE") interface assemblies, ATE test boards, and test sockets/contactors. The Company has grown its business and expanded its product lines through internal product development, strategic acquisitions, joint development/ ventures and licensing of technologies. The Company was incorporated in California in 1976 and reincorporated in Delaware in 1987. The Company maintains its principal executive offices at 1150 North Fiesta Boulevard, Gilbert, Arizona 85233 and its telephone number is (480) 333-1500. AVAILABLE INFORMATION. The Shares are currently registered under the Exchange Act. Accordingly, the Company is subject to the information filing requirements of the Exchange Act and is required to file periodic reports, proxy statements, and other information with the SEC relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and 11 17 officers, including their remuneration, stock options granted to them, and Shares held by them, the principal holders of the Company's securities, and any material interest of those persons in transactions with the Company is required to be disclosed in proxy statements and annual reports distributed to the Company's stockholders and filed with the SEC. Such reports, proxy statements, and other information are available for inspection and copying at the public reference facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of this material may also be obtained by mail, upon payment of the SEC's customary fees, from the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also maintains an Internet site on the World Wide Web at "http://www.sec.gov" that contains reports, proxy statements, and other information. SUMMARY FINANCIAL INFORMATION. Set forth below is certain summary consolidated financial information for each of the Company's last three full fiscal years, as contained in the Company's annual report on Form 10-K for the fiscal year ended December 31, 1999 (the "Company 10-K"), as well as unaudited financial information for the nine month period ended September 30, 2000, as contained in the Company's press release, dated October 18, 2000, of financial results for the 3 and 9 months ended September 30, 2000. Parent and the Merger Sub make no representation as to the accuracy of such financial information. More comprehensive financial information is included in the Company 10-K and other documents filed by the Company with the SEC, including the financial information and related notes contained therein, and the following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and notes contained therein. Such reports and other documents may be examined and copies may be obtained from the SEC in the manner set forth above. CERPROBE CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------- ------------------------------ 2000 1999 1998 1997 ------------- -------- ------- ------- (UNAUDITED) INCOME STATEMENT DATA Revenues....................................... $92,521 $62,656 $76,207 $69,012 Income (loss) from continuing operations before income taxes and minority interest........... $10,772 $(14,831) $9,306 $12,443 Net income (loss).............................. $5,862 $(12,581) $(496) $1,896 Net income (loss) per common share: Basic........................................ $0.33 $(1.60) $(0.06) $0.28 Diluted...................................... $0.31 $(1.60) $(0.06) $0.27 BALANCE SHEET DATA (AT PERIOD END): Current assets................................. $40,551 $32,820 $36,929 $49,599 Total assets................................... $86,428 $83,368 $63,686 $68,108 Current liabilities............................ $19,795 $21,008 $6,410 $7,095 Total liabilities and minority interest........ $27,151 $30,251 $10,212 $8,764 Total Stockholders' equity..................... $59,277 $53,117 $53,474 $59,344
OTHER FINANCIAL INFORMATION. During the course of the discussions and information exchange between Parent and the Company that led to the execution of the Merger Agreement, the Company provided Parent with information about the Company and its financial performance which is not publicly available. The information provided included financial projections for the Company as an independent 12 18 company for fiscal years 2000 and 2001 (i.e., without regard to the impact on the Company of a transaction with Parent and the Merger Sub) and the Company's budget for fiscal year 2000. The financial projections included, among other things, the following forecasts of the Company's consolidated revenues and net income, respectively (in millions): in 2000, $124 and $7; and in 2001, $160 and $15. The Company has advised Parent and the Merger Sub that it does not as a matter of course make public any projections as to future performance or earnings, and the above projections are included in this Offer to Purchase solely because such information was provided to Parent during the course of Parent's evaluation of the Company. The projections were not prepared with a view to public disclosure or in compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The Company has advised Parent and the Merger Sub that (i) its internal operating projections are, in general, prepared solely for internal use and capital budgeting and other management decisions and are subjective in many respects and thus susceptible to various interpretations and periodic revision based on actual experience and business developments and (ii) the projections were based on a number of internal assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters that are inherently subject to significant economic and competitive uncertainties, all of which are difficult to predict and some of which are beyond the control of the Company. Accordingly, there can be no assurance, and no representation or warranty is or has been made by any of the Company, Parent, the Merger Sub or any of their representatives, that actual results will not vary materially from those described above. The foregoing information is forward-looking in nature and inherently subject to significant uncertainties and contingencies, including industry performance, general business and economic conditions, currency exchange rates, customer requirements, competition, adverse changes in applicable laws, regulations or rules governing environmental, tax and accounting matters and other matters. The inclusion of this information should not be regarded as an indication that the Company, Parent, the Merger Sub or anyone who received this information then considered, or now considers, it a reliable prediction of future events, and this information should not be relied on as such. These estimates and assumptions may not be realized and are inherently subject to significant business, economic, and competitive uncertainties, many of which are beyond the control of the Company. Therefore, there can be no assurance that the projections will prove to be reliable estimates of probable future performance. It is quite likely that actual results will vary materially from these estimates. In light of the uncertainties inherent in projections of any kind, the inclusion of projections in this Offer to Purchase should not be regarded as a representation by any party that the estimated results will be realized. There can be no assurances in this regard. None of the Company, Parent, the Merger Sub or any other person assumes any responsibility for the validity, reasonableness, accuracy or completeness of the projections described above. Further, none of the Company, Parent, the Merger Sub or any other person intends to, and each of them disclaims any obligation to, update, revise or correct such projections if they are or become inaccurate, even in the short term. The projections have not been adjusted to reflect the effects of the Offer or the Merger. 9. CERTAIN INFORMATION CONCERNING PARENT AND THE MERGER SUB. Parent designs, manufactures and markets capital equipment and packaging materials for sale to companies that manufacture and assemble semiconductor devices. Parent also services, maintains, repairs and upgrades assembly equipment. Parent's business is divided into three segments: equipment, packaging materials and advanced packaging technology. Parent's principal product line is its family of wire bonders, which are used to connect extremely fine wires, typically made of gold or aluminum, between the bonding pads on the die and the leads on the integrated circuit (IC) package to which the die has been attached. In addition to wire bonders, Parent produces and distributes other types of semiconductor assembly equipment, including wafer dicing saws and die bonders, flip chip assembly systems and factory automation and integration systems. Parent offers a range of packaging materials to semiconductor device assemblers which Parent sells under the brand names "American Fine Wire" "Micro-Swiss," and "Semitec." Parent 13 19 was incorporated in Pennsylvania in 1956. Parent's principal offices are located at 2101 Blair Mill Road, Willow Grove, Pennsylvania 19090. Parent's telephone number is (215) 784-6000. The Merger Sub is a Delaware corporation and to date has engaged in no activities other than those incident to its formation and the commencement of the Offer. The Merger Sub was incorporated in 2000, and its principal offices are located at 2101 Blair Mill Road, Willow Grove, Pennsylvania 19090, and the Merger Sub's telephone number is (215) 784-6000. FINANCIAL INFORMATION OF PARENT. Parent is subject to the information reporting requirements of the Exchange Act and in accordance therewith Parent is obligated to file reports and other information with the SEC relating to its business, financial condition and other matters. Information, as of particular dates, concerning Parent's directors and officers, their remuneration, stock options granted to them, the principal holders of Parent's securities, any material interests of such persons in transactions with Parent and other matters is required to be disclosed in proxy statements distributed to Parent's stockholders and filed with the SEC. Such reports, proxy statements and other information are available from the SEC at the addresses and through the website described in Section 8. OTHER INFORMATION REGARDING PARENT AND THE MERGER SUB. The name, citizenship, business address, current principal occupation, including the name, principal business and address of the organization in which such occupation is conducted, and material positions held during the past five years (including the name, principal business and address of the organization in which such positions were held), of each of the directors and executive officers of Parent and the Merger Sub are set forth in Schedule A to this Offer to Purchase. None of Parent or the Merger Sub, or, to the best of their knowledge, any of the persons listed in Schedule A hereto, nor any associate or majority-owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any Shares or has engaged in any transactions in the Shares in the past 60 days. None of Parent or the Merger Sub has purchased any Shares during the past two years. During the last five years, none of Parent or the Merger Sub nor, to the best of their knowledge, any of the persons listed in Exhibit A, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. Except as set forth in Section 10, there have been no negotiations, transactions or material contacts between Parent or the Merger Sub, or, to the best of their knowledge, any of the persons listed in Schedule A hereto, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets. Except as described in Section 10, none of Parent or the Merger Sub, or, to the best of their knowledge, any of the persons listed in Schedule A hereto, has had any transaction with the Company or any of its executive officers, directors or affiliates that would require disclosure under the rules and regulations of the SEC applicable to the Offer. 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. Parent, through its involvement in the semiconductor packaging industry, has always been aware of the critical importance of testing integrated circuits. In the early part of 2000, Parent was approached by certain customers with concerns related to technical difficulties they had encountered in their testing of integrated circuits, and suggested that Parent develop solutions to their difficulties. At this time, Parent was also considering whether to expand its business strategically through acquisitions or otherwise. The combination of these factors led Parent to begin the process of identifying potential strategic partners in the semiconductor test interconnect industry. The Company was one of several potential partners identified during this process. 14 20 On March 16, 2000, Mr. James P. Spooner, Vice President of Corporate Development for Parent, met with the senior management of the Company, including C. Zane Close, President and Chief Executive Officer of the Company, at the Company's Gilbert, Arizona headquarters to discuss industry related issues. During this discussion, the possibility of a strategic partnership between Parent and the Company was discussed, although no understanding was reached. In contemplation of continuing discussions on the subject of a possible partnership or joint venture, a confidentiality agreement was executed between Parent and the Company. In March, 2000 at an industry conference, Mr. C. Scott Kulicke, Chairman of the Board and Chief Executive Officer of Parent, was introduced to Mr. Close. For the next several months, while Parent explored other potential business opportunities, the parties exchanged limited financial and other information. During this period there were periodic telephone conversations between the Company and Parent regarding a potential strategic partnership. In May, 2000, Parent decided to more actively consider acquisition possibilities in the semiconductor test interconnect industry, and on May 17 and 18, 2000 conducted due diligence at the Company's Gilbert, Arizona, headquarters. During this visit, on May 17, 2000, Parent delivered a preliminary, non-binding letter indicating its interest, subject to due diligence and the negotiation of definitive documentation, in acquiring the Company in an all stock merger at a premium of approximately 30 to 40 percent over the Company's then present market value. Following delivery of the May 17, 2000 letter, ongoing discussions regarding a potential business combination continued while Parent conducted additional due diligence investigations, including visits to the Company's facilities in California, France, Singapore, Scotland and Taiwan in June of 2000. During these continuing discussions and due diligence investigations, on June 5, 2000, Parent forwarded to the Company a proposed form of Merger Agreement, and on June 16, 2000, the Company provided Parent with its initial comments to the proposed agreement. On July 12, 2000, at a meeting in Milpitas, California, Mr. Spooner spoke with Mr. Close and indicated that, subject to its continuing due diligence and the negotiation of definitive documentation, Parent was contemplating a transaction in which Parent would acquire the Company by issuing a maximum of six million shares of common stock, without par value, of Parent (the "Parent Common Stock") to the Company's stockholders, with the precise number of shares of Parent Common Stock that would be issued to be determined based on the price per share of Parent Common Stock at the time of the closing of the transaction. On July 18, 2000, Parent delivered a follow-up, non-binding letter and a revised draft of the Merger Agreement, each reflecting the July 12, 2000 non-binding oral offer. Shortly after delivery of the July 18, 2000 letter, due to fluctuations in the market price of shares of Parent Common Stock on the Nasdaq Stock Market, negotiations between the parties were mutually terminated. In early August, 2000, the senior management of Parent discussed the possibility of restructuring the terms of a potential acquisition of the Company. To this end, talks were reinitiated with the Company, and on August 10, 2000, a revised draft of the Merger Agreement was provided to the Company by Parent. Following the delivery of the revised draft Merger Agreement, on August 14 and 15, 2000, Mr. Spooner, along with his legal advisors, visited the Company at its Gilbert, Arizona, headquarters. During this visit, negotiations between the parties resumed on several non-price issues, and, on August 17, 2000, Mr. Spooner made a presentation to the Company Board at a regularly scheduled meeting. At this Company Board meeting, Mr. Spooner indicated that Parent intended to present a revised, non-binding letter to the Company within the next week. On August 22, 2000, Parent delivered a revised version of the Merger Agreement to the Company incorporating the non-price issues negotiated at the August 14 and 15, 2000 meeting, and on August 24, 2000, Parent delivered a revised, non-binding letter indicating its interest, subject to its continuing due diligence and the negotiation of definitive documentation in acquiring the Company at a price per Share of $19.00, payable half in cash and half in shares of Parent Common Stock, valued as of the date the transaction closed. Following the delivery of the August 24, 2000 letter, negotiations on price and other issues continued. On September 6, 2000, Mr. Close visited Parent's facilities in Willow Grove, Pennsylvania, and met with Mr. Kulicke and Mr. Spooner. No agreement was reached during this meeting. On September 8, 2000, following Mr. Close's return to Arizona, the Company contacted Parent and indicated that it was seeking a transaction in which the Shares were valued at not less than $20.00 per Share, payable half in cash and 15 21 half in shares of Parent Common Stock valued as of the date the transaction closed. On September 11, 2000, Parent delivered a revised, non-binding letter indicating its interest, subject to its continuing due diligence and the negotiation of definitive documentation, in acquiring the Company at a price per Share of $20.00, payable half in cash and half in shares of Parent Common Stock valued as of the date the transaction closed, subject to an upper limit on the number of Parent shares issuable in the transaction. On September 13, 2000, the Company contacted Parent and indicated a willingness to resume negotiations on the basis on the September 11, 2000 letter. From September 13 to September 27, 2000, the parties conducted intense negotiations towards finalizing definitive transaction documents, and the Company continued to provide due diligence materials to Parent. On September 28, 2000, Parent informed the Company that due to the fluctuations in the market price of shares of Parent Common Stock, it was concerned that the transaction as proposed could not be effected, since it would likely require more shares of Parent Common Stock than Parent was willing to issue. On that date, via telephone, Mr. Spooner indicated to the Company Board that Parent was contemplating revising its offer as an all-cash offer. The Company Board informed Mr. Spooner that Parent needed to submit a revised offer within 24 hours or all negotiations would cease. Over the next day, Parent met with its advisors regarding the possibility of revising its offer to acquire the Company. On September 29, 2000, in response to these discussions, Parent delivered a revised, non-binding letter indicating its interest, subject to its continuing due diligence and the negotiation of definitive documentation, in acquiring the Company in an all cash merger at a price per Share of $20.00. On that same day, the Board of Directors of Parent (the "Parent Board") held a meeting at which members of Parent's senior management, together with Parent's advisors, reviewed in detail the then current proposal to acquire the Company. At this meeting, the Parent Board appointed a sub-committee (the "Parent Sub- Committee") to give final approval to the definitive acquisition of the Company, if required. On October 3, 2000, the Company contacted Parent regarding the September 29, 2000 letter. During these discussions, Mr. Kulicke and Mr. Ross J. Mangano, the Chairman of the Company Board, agreed in principle, subject to the approval of their respective boards of directors and the negotiation of definitive transaction documentation, to the acquisition of the Company by Parent in a tender offer at a price of $20.00 cash per Share. From October 3, 2000 through October 11, 2000, members of the management of both companies, along with their legal advisors, extensively negotiated the terms of the proposed acquisition and the definitive documentation. The principal issues discussed among the parties during these negotiations included the nature and extent of the parties' representations and warranties, the conditions to the Offer, the termination events under the definitive agreements and the liability of the parties in such circumstances, the amount of the termination fees payable by the Company and Parent and the bases upon which they were payable, the nature of Parent's commitments with respect to various Company officers and employee benefit matters, the source of financing for the Offer and the Merger, and the terms of the Stock Option Agreement, including under what circumstances Parent's option to purchase Shares under the Stock Option Agreement would become exercisable. On October 9, 2000, the Parent Board with its advisors met and was updated on the status of the negotiations. At this meeting, the Parent Board reconfirmed its approval of the transaction and the appointment of the Parent Sub-Committee to finalize the remaining details. On October 11, 2000, the Parent Sub-Committee authorized the acquisition of the Company, the Merger Agreement, the Stock Option Agreement and the Affiliate Tender Agreement. Following a meeting of the Company Board on this date, the representatives of both Parent and the Company concluded negotiations of mutually acceptable definitive documentation. Thereafter, Parent, the Merger Sub and the Company executed, where applicable, each of the Merger Agreement, the Stock Option Agreement and the Affiliate Tender Agreement, and the transaction was announced before the opening of business on October 12, 2000 by the issuance of a press release by Parent. 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE MERGER. PURPOSE. The purpose of the Offer and the Merger is to enable Parent indirectly to acquire control of, and the entire equity interest in, the Company. The Offer is being made under the Merger Agreement 16 22 and is intended to increase the likelihood that the Merger will be effected. The purpose of the Merger is to acquire all of the outstanding Shares not purchased under the Offer. The Company will, as of the Effective Time, be an indirect wholly owned subsidiary of Parent. Under Delaware law, if the Merger Sub acquires, through the Offer or otherwise, at least 90% of the outstanding Shares, the Merger may be effected without the vote of, or notice to, the Company's stockholders. Therefore, assuming the Company has 9,489,760 Shares outstanding (as was the case on September 30, 2000), if at least approximately 8,540,784 of the outstanding Shares (or such greater number as may be necessary if options are exercised) are acquired under the Offer or otherwise, the Merger Sub will be able to, and under the Merger Agreement will be required to, effect the Merger without a meeting of the Company's stockholders. If the "short form" merger procedure described above is not available, under the DGCL, the affirmative vote of holders of a majority of the outstanding Shares (including any Shares owned by the Merger Sub) will be required to approve the Merger. If the Merger Sub acquires, through the Offer or otherwise, voting power with respect to at least a majority of the outstanding Shares, which would be the case if the Minimum Condition were satisfied and the Merger Sub were to accept for payment, and pay for, Shares tendered under the Offer, it would have sufficient voting power to effect the Merger regardless of the vote of any other stockholders of the Company. PLANS FOR THE COMPANY. Except as disclosed in this Offer to Purchase, neither Parent nor the Merger Sub has any present plans or proposals that would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any material changes in the Company's capitalization, corporate structure, business or composition of its management or the Company Board. Parent is continuing to evaluate and review the Company and its business, assets, corporate structure, capitalization, operations, properties, policies, management and personnel with a view towards determining how to optimally realize any potential benefits which arise from the relationship of the operations of the Company with those of other business units of Parent. Such evaluation and review is ongoing and is not expected to be completed until after the consummation of the Offer and the Merger. If, as and to the extent that Parent acquires control of the Company, Parent will complete such evaluation and review of the Company and will determine what, if any, changes would be desirable in light of the circumstances which then exist. Such changes could include, among other things, restructuring the Company through changes in the Company's business, corporate structure, certificate of incorporation, by-laws, capitalization or management or could involve consolidating and streamlining operations and reorganizing other businesses and operations. Assuming the Minimum Condition has been satisfied and the Merger Sub purchases all Shares tendered under the Offer, the Merger Sub intends, subject to Rule 14f-1 under the Exchange Act, promptly to exercise its rights under the Merger Agreement to obtain majority representation on, and control of, the Company Board. Under the Merger Agreement, the Company has agreed, concurrently with the Merger Sub's acceptance for payment and payment for such Shares, that the Merger Sub will be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board as will give the Merger Sub representation on the Company Board equal to the product of (i) the total number of directors on the Company Board (giving effect to any increase in the size of such Board under this provision of the Merger Agreement) and (ii) the percentage that the number of Shares beneficially owned by the Merger Sub and its affiliates (including Shares so accepted for payment and purchased) bears to the number of Shares then outstanding; provided that, so long as the total number of directors on the Company Board does not exceed nine (9), the number of directors designated by the Merger Sub on the Company Board may not exceed seven (7). In furtherance of the foregoing, the Merger Agreement provides that concurrently with the Merger Sub's acceptance for payment and payment for such Shares, upon the request of the Merger Sub or Parent and subject to compliance with Rule 14f-1 under the Exchange Act, the Company will use its reasonable best efforts promptly either to increase the size of its Board or to secure the resignations of such number of its incumbent directors, or both, as is necessary to enable such designees of the Merger Sub to be so elected or appointed to the Company Board, and, subject to applicable law, the Company has agreed to take all reasonable actions available to 17 23 the Company to cause such designees of the Merger Sub to be so elected or appointed. At such time, the Merger Agreement provides that the Company will, if requested by Parent or the Merger Sub and subject to applicable law, also take all reasonable action necessary to cause persons designated by the Merger Sub to constitute at least the same percentage, rounded up to the next whole number, as is on the Company Board of (i) each committee of the Company Board, (ii) each board of directors, or similar body, of each subsidiary of the Company and (iii) each committee, or similar body, of each such board. Parent and the Company have also agreed that after the time that the Merger Sub's designees are elected to the Company Board, such Board will have, at all times before the Effective Time at least two directors who were directors of the Company on October 11, 2000 and who are not officers or affiliates of the Company, Parent or any of their affiliates, it being understood that for purposes of this sentence, a director, including, without limitation, the Chairman of the Company Board, will not be deemed an affiliate of the Company solely as a result of his status as a director of the Company (the "Current Directors"). Parent and the Company have further agreed that (i) if the number of Current Directors serving on the Company Board is reduced below two for any reason whatsoever, including, without limitation, by a director's refusing or failing to serve, the remaining Current Director serving on the Company Board may designate another Current Director to fill such vacancy, (ii) if no Current Directors then remain on the Company Board, the other directors will designate two other Current Directors to fill such vacancies, and (iii) if notwithstanding the foregoing, no Current Directors are on the Company Board, the other directors may designate two other persons to fill such vacancies who are not officers or affiliates of the Company, Parent or any of their respective affiliates (each an "Independent Director"). Subject to applicable law, the Company has also agreed to promptly take all action reasonably requested by Parent necessary to effect any such election, including furnishing the information required by Section 14(f) of the Exchange Act and Rule 14(f)-1 promulgated thereunder to Parent for inclusion in this Offer to Purchase. The Company and Parent have also agreed that before the Effective Time and from and after the time that the Merger Sub's designees constitute a majority of the Company Board, if applicable, any amendment or any termination of the Merger Agreement by the Company, any extension of time for performance of any of the obligations of Parent or the Merger Sub thereunder, and any waiver of any condition or of any of the Company's rights thereunder may be effected only with the affirmative vote of a majority of the Current Directors and Independent Directors; provided, that, if there are no Current Directors or Independent Directors, such actions may be effected by majority vote of the entire Company Board. The Merger Sub or an affiliate of the Merger Sub may, following the consummation or termination of the Offer, seek to acquire additional Shares through open market purchases, privately negotiated transactions, a tender offer or exchange offer or otherwise, upon such terms and at such prices as it shall determine, which may be more or less than the price paid in the Offer. The Company Board has approved the Merger Agreement and the Offer, and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the Merger. The Company has also amended the Rights Agreement to provide that (i) neither Parent nor the Merger Sub, nor any affiliate of Parent or the Merger Sub, will be deemed to be an Acquiring Person or entity (as defined in the Rights Agreement) in connection with the transactions contemplated by the Merger Agreement, (ii) the Rights will not separate from the Shares as a result of the execution, delivery or performance of the Merger Agreement, the Stock Option Agreement or the consummation of the Offer or the Merger or any of the other transactions contemplated thereby, and (iii) none of the Company, the Merger Sub or the Surviving Corporation, nor any of their respective affiliates, will have any obligations under the Rights Agreement to any holder (or former holder) of Rights as of or following the consummation of the Offer or following the Effective Time. THE MERGER AGREEMENT. The following is a summary of the Merger Agreement, a copy of which has been filed with the SEC as an exhibit to the Tender Offer Statement on Schedule TO filed by Parent and the Merger Sub (the "Schedule TO"). This summary is not a complete description of the terms and conditions of the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement. The following summary may not contain all of the information important to you. The Merger Agreement 18 24 may be examined, and copies obtained, as set forth in Section 8 of this Offer to Purchase. Capitalized terms used in the following summary and not otherwise defined below have the meanings set forth in the Merger Agreement. The Offer and the Merger. The Merger Agreement provides for the making of the Offer and that upon the terms and subject to prior satisfaction or waiver, to the extent permitted to be waived, of the conditions of the Offer, promptly after expiration of the Offer, Parent will cause the Merger Sub to accept for payment, and pay for, all Shares validly tendered and not withdrawn in the Offer. The Merger Agreement further provides that the Merger Sub has the right to modify and make changes to the terms and conditions of the Offer as described above in Section 1 of this Offer to Purchase. The Merger Agreement provides that, as soon as practicable after consummation of the Offer, receipt of any required approval by the Company's stockholders of the Merger Agreement and the satisfaction or waiver of other conditions described below, the Merger Sub will be merged into the Company, and each then outstanding Share not owned by Parent or any subsidiary of Parent or held in treasury by the Company or any subsidiary of the Company, other than Shares held by stockholders of the Company who properly exercise dissenters' rights under the applicable provisions of the DGCL, will be converted into the right to receive the Merger Consideration. Vote Required to Approve Merger. The DGCL requires that, if the "short form" merger procedure previously described in this Section 11 is not available, the adoption of any plan of merger of the Company must be approved by the holders of a majority of the Company's outstanding Shares. In such case, under the DGCL, the affirmative vote of holders of a majority of the outstanding Shares, including any Shares owned by the Merger Sub, will be required to approve the Merger. If the approval of the holders of a majority of the Company's outstanding Shares is required, the Merger Agreement provides that the Company will as promptly as reasonably practicable after the Expiration Date convene a special meeting of its stockholders for the purpose of voting on the approval and adoption of the Merger Agreement and the Merger, and otherwise comply with all legal requirements applicable to a stockholders' meeting. Subject to its fiduciary duties, the Company Board will recommend the approval and adoption of the Merger and the Merger Agreement. If the Merger Sub acquires, through the Offer or otherwise, voting power with respect to at least a majority of the outstanding Shares, which would be the case if the Minimum Condition were satisfied and the Merger Sub were to accept for payment, and pay for, Shares tendered under the Offer, it would have sufficient voting power to effect the Merger without the vote of any other stockholders of the Company. Recommendation. The Company Board, at a meeting held on October 11, 2000, has (i) unanimously determined that the terms of the Offer and the Merger are fair to, and in the best interests of, the stockholders of the Company, (ii) unanimously duly approved the Offer, the Merger, the Merger Agreement, the Affiliate Tender Agreement, the Stock Option Agreement and the other transactions contemplated thereby, and (iii) unanimously recommended that the stockholders of the Company accept the Offer and approve the Merger Agreement and the Merger (the "Offer Recommendation"). This recommendation of the Company Board may be withdrawn or modified by the Company Board under certain circumstances. However, the Company may be obligated to pay Parent the Company Termination Fee described below under "Fees and Expenses" if such approval is withdrawn or modified. Conditions to the Merger. The respective obligations of each party to effect the Merger are subject to the satisfaction or waiver, where permissible, before the Effective Time, of the following conditions: (1) if required by applicable law, the Merger Agreement will have been adopted by the requisite affirmative vote of the holders of a majority of the Shares; (2) the waiting period applicable to the consummation of the Merger under the HSR Act will have expired or been terminated; (3) no judgment, order, decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued by any court or other Government Entity of competent 19 25 jurisdiction or other legal restraint or prohibition will be in effect (i) preventing the consummation of the Merger or (ii) prohibiting or limiting the ownership or operation by Parent or the Company and their respective subsidiaries of any material portion of the business or assets of Parent or the Company and their respective subsidiaries, taken as a whole, or (iii) compelling Parent or the Company and their respective subsidiaries to dispose of or hold separate any portion of the business or assets of Parent or the Company and their respective subsidiaries, taken as a whole, which (A) in the case of either clause (ii) or (iii), would result in a Company Material Adverse Effect (as defined in Section 11) or a Parent Material Adverse Effect (as defined in Section 13), except if such prohibition or restraint relating to clauses (i), (ii) and (iii) arises under (1) any antitrust, competition or similar statute, law, rule or regulation of any jurisdiction outside the United States of America, or (2) any other statute, law, rule or regulation of any jurisdiction outside the United States of America, or (B) in the case of clauses (i), (ii) and (iii), would reasonably be expected to subject any officer, director, employee or stockholder of the Company or Parent to any civil or criminal liability; (4) in the case of the Company's obligations, all governmental consents, orders and approvals, other than under the HSR Act and other than the filing of the Certificate of Merger by the Company with the Office of the Secretary of State of Delaware, legally required for the consummation of the Merger and the transactions contemplated in the Merger Agreement shall have been obtained and be in effect at the Effective Time, except where the failure to obtain any such consent would not reasonably be expected to (A) subject any officer, director, employee or stockholder of the Company to civil or criminal liability in respect of the failure to obtain such consent, or (B) have a Company Material Adverse Effect, and in the case of Parent's and the Merger Sub's obligations, all other governmental consents, orders and approvals, other than under the HSR Act, legally required for the consummation of the Merger and the transactions contemplated in the Merger Agreement shall have been obtained and be in effect at the Effective Time, except where the failure to obtain any such consent would not reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect; and (5) Merger Sub shall have accepted for payment and paid for the Shares tendered under the Offer. Termination of the Merger Agreement. The Merger Agreement may be terminated at any time before the Effective Time, and, if required by applicable law, whether before or after approval of the Merger Agreement and the Merger by the stockholders of the Company: (1) by mutual written consent of Parent and the Company; (2) by either Parent or the Company if: - there is any decree, judgment, injunction or other order which is final and nonappealable preventing the consummation of the Offer or the Merger and the terminating party shall have used reasonable best efforts to prevent the entry of such decree, judgment, injunction or other order; or - the Offer is terminated or withdrawn under its terms (including under the terms described in Section 13) without any of the Shares being purchased thereunder. (3) by the Company if: - before the purchase of a majority of the Shares under the Offer: - there is a breach of any representation, warranty, covenant or agreement in the Merger Agreement on the part of Parent or the Merger Sub, or if any representation or warranty on the part of Parent or the Merger Sub shall have become untrue (except to the extent such representation or warranty speaks as of another date, in which case such 20 26 representation or warranty shall be untrue as of such date); provided that the Company may not terminate the Merger Agreement if: - such breach or failure to perform or comply is curable by Parent or the Merger Sub through the exercise of their reasonable efforts and for so long as Parent or the Merger Sub continue to exercise such reasonable efforts or, if shorter, for 20 days, or - the circumstances giving rise to such breach of any of Parent's or the Merger Sub's representations and warranties do not constitute or effect, individually or in the aggregate, a Parent Material Adverse Effect. - the Merger Sub fails to commence the Offer in violation of the Merger Agreement. - all of the Offer Conditions shall have been satisfied or waived and the Merger Sub shall not have accepted for payment and paid for any Shares under the Offer in accordance with its terms. - before the purchase of a majority of the Shares under the Offer, all of the following conditions are met: - the Company receives an unsolicited bona fide proposal in writing by any person relating to a Competing Transaction; - the Company Board, after duly considering the advice of outside legal counsel to the Company, determines in good faith that the failure to do any of the following would be reasonably likely to constitute a breach of its fiduciary duties to the Company's stockholders imposed by applicable law: (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the Offer Recommendation (it being understood that any such modification is not adverse if a majority of the directors on the Company Board continue to favorably recommend the Offer and the Merger), (ii) approve or recommend, or propose publicly to approve or recommend, any Competing Transaction (as defined in the Merger Agreement), or (iii) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Competing Transaction (other than agreements relating solely to non-disclosure or "standstill" provisions); - the Company notifies Parent in writing that it intends to take any of the foregoing actions listed in clauses (i), (ii) and (iii) above; - if the Company proposes to enter into an agreement with respect to such Competing Transaction, the Company attaches the most recent version of such agreement to such notice; - Parent does not make, within 48 hours of receiving the Company's written notification of its intention to take the actions listed in clause (i), (ii) or (iii) above, a written offer that is at least as favorable, from a financial point of view (after considering all of the terms of such Competing Transaction), to the stockholders of the Company as the Competing Transaction, as determined in good faith by the Company Board after duly considering the advice of the Company's investment bankers; - the Company is not in material breach of its obligations not to solicit, negotiate or endorse any Competing Transactions; and - the Company pays to Parent the Company Termination Fee. (4) by Parent if, before the purchase of a majority of the Shares under the Offer: - the Company amends the Rights Plan to facilitate the acquisition by any person, entity or "group," (as such term is defined under Section 13(d) of the Exchange Act and the rules and 21 27 regulations promulgated thereunder) other than Parent or the Merger Sub of any of the outstanding shares of its capital stock. - on the Expiration Date, the Offer Condition described in subsection (1) of Section 13 has not been satisfied or waived, provided, that, to terminate under this provision, Parent must pay the Parent Termination Fee (as described below). - on the Expiration Date, the Offer Conditions described in subsections (2) and (3) of Section 13 have not been satisfied or waived. - the Company Board: - withdraws, modifies or amends the Offer Recommendation in a manner adverse to Parent or the Merger Sub (it being understood that any such modification is not adverse if a majority of the directors on the Company Board continue to favorably recommend the Offer and the Merger); or - has endorsed, approved or recommended to the Company's stockholders any Competing Transaction. - the Company has entered into any letter of intent, agreement in principle, acquisition agreement or other similar agreement relating to any Competing Transaction, other than agreements relating solely to non-disclosure or "standstill" provisions. - a tender offer (other than the Offer) or exchange offer for the outstanding shares of capital stock of the Company then representing 20% or more of the combined power to vote generally for the election of directors is commenced, and the Company Board: - recommends in any manner that the Company's stockholders tender their shares into such tender or exchange offer; or - does not recommend in any schedule 14D-9, or in any other form or schedule required to be filed with the SEC by applicable law, that the Company's stockholders not tender their shares into such tender or exchange offer. Effect of Termination. If the Merger Agreement is terminated by either Parent or the Company, the Merger Agreement will become void and there will be no liability or further obligation on the part of Parent, the Merger Sub or the Company or any of their respective officers or directors, except that nothing will relieve any party from its obligations with respect to any breach of the Merger Agreement or to pay any required expenses of, or required termination fee to, the other parties. Fees and Expenses. The Company will be required to pay Parent a termination payment of $5,625,000 (the "Company Termination Fee") if the Merger Agreement is terminated: (1) by Parent if, before the purchase of a majority of the Shares under the Offer: - the Company Board: - withdraws, modifies or amends the Offer Recommendation in a manner adverse to Parent or the Merger Sub (it being understood that any such modification is not adverse if a majority of the directors on the Company Board continue to favorably recommend the Offer and the Merger); or - has endorsed, approved or recommended any Competing Transaction. - the Company has entered into any letter of intent, agreement in principle, acquisition agreement or other similar agreement relating to any Competing Transaction, other than agreements relating solely to non-disclosure or "standstill" provisions. 22 28 - a tender offer (other than the Offer) or exchange offer for outstanding shares of capital stock of the Company then representing 20% or more of the combined power to vote generally for the election of directors is commenced, and the Company Board: - recommends in any manner that the Company's stockholders tender their shares into such tender or exchange offer; or - does not recommend in any schedule 14D-9 or in any other form or schedule required to be filed with the SEC by applicable law that the Company's stockholders not tender their shares into such tender or exchange offer. - the Company amends the Rights Plan to facilitate the acquisition by any person, entity or "group" (as such term is defined under Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) other than Parent or the Merger Sub of any of the outstanding shares of the capital stock. In any of the preceding cases, the fee shall be payable within two business days of such termination. (2) by the Company (before the purchase of a majority of the Shares under the Offer and after complying with the conditions under which it is permitted by the Merger Agreement to do any of the following, in which case the Company Termination Fee shall be paid contemporaneously with such termination) if the Company shall: (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the Offer Recommendation (it being understood that any such modification is not adverse if a majority of the directors on the Company Board continue to favorably recommend the Offer and the Merger), (ii) approve or recommend, or propose publicly to approve or recommend, any Competing Transaction, or (iii) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Competing Transaction (other than agreements relating solely to non-disclosure or "standstill" provisions). Parent will be required to pay the Company a termination payment of $16,875,000 (the "Parent Termination Fee") if the Merger Agreement is terminated: (1) by Parent, if such termination is attributable to the fact that the Offer Condition relating to the accuracy of the Company's representations or warranties, as described in subsection (1) of Section 13, has not been satisfied, in which case Parent shall pay the Parent Termination Fee contemporaneously with such termination. (2) by the Company, so long as the Company has not breached in any material respect any representation, warranty or covenant on its part and either: - the Merger Sub has failed to commence the Offer in violation of the Merger Agreement; or - all of the Offer Conditions have been satisfied or waived and the Merger Sub has not accepted for payment and paid for any Shares under the Offer in accordance with its terms. In any of the cases described in subsection (2) above, Parent shall pay the Parent Termination Fee within two business days following such termination. Other Fees and Expenses. The Merger Agreement provides that all expenses incurred by the parties thereto will be borne solely by the party which has incurred such expenses; provided, however, that Parent and the Merger Sub as a group and the Company individually will pay one-half each for all expenses related to (i) printing, filing and mailing the Offer Documents, the Information Statement, the Schedule 14D-9 and the Company Proxy Statement (each as defined in the Merger Agreement), (ii) all SEC and other regulatory filing fees incurred in connection with such documents and (iii) all fees of preparing and filing appropriate notification under the HSR Act. Notwithstanding the foregoing, (A) if the Merger Agreement is terminated by Parent due to the Company's breach of a representation or warranty, then the Company will make a nonrefundable cash payment to Parent, within two business days after such 23 29 termination, in an amount equal to the aggregate amount of all fees and reasonable, documented, out-of-pocket expenses (including with respect to fees, all filing fees and all reasonable attorneys' fees, accountants' fees and financial advisory fees) that have been paid or that may become payable by or on behalf of Parent in connection with the preparation and negotiation of the transaction documents and otherwise in connection with the Offer and the Merger, provided, however, that such payment will not exceed $1,000,000, and (B) if this Agreement is terminated by the Company due to Parent's or the Merger Sub's breach of a representation or warranty, then Parent will make a nonrefundable cash payment to the Company, within two business days after such termination, in an amount equal to the aggregate amount of all fees and reasonable, documented, out-of-pocket expenses (including with respect to fees, all filing fees and all reasonable attorneys' fees, accountants' fees and financial advisory fees) that have been paid or that may become payable by or on behalf of the Company in connection with the preparation and negotiation of the transaction documents and otherwise in connection with the Offer and the Merger, provided, however, that such payment will not exceed $1,000,000. Acquisition Proposals. The Company has agreed that it will not, and will not permit any of its subsidiaries or authorize any of its representatives to, and will use its reasonable best efforts not to allow any of its representatives to: - solicit or knowingly encourage (including by way of furnishing non-public information or assistance), or take any other action to knowingly facilitate or induce, any inquiries or the making of any proposal that constitutes, or that may reasonably be expected to lead to, any Competing Transaction; or - enter into discussions or negotiations with any person or entity in furtherance of any inquiries to obtain a Competing Transaction; or - agree to, or endorse, any Competing Transaction. Furthermore, the Company has agreed to promptly notify Parent of all material terms of any such inquiries or proposals received by the Company or, to the knowledge of the Company, by any representative of the Company relating to any Competing Transaction and if such inquiry or proposal is in writing, the Company has agreed to promptly deliver or cause to be delivered to Parent a copy of such inquiry or proposal. Notwithstanding the foregoing restrictions, the Company is not prohibited: - at any time before the purchase of a majority of the Shares under the Offer from: - furnishing information to, or entering into negotiations or discussions with, any persons in connection with an unsolicited bona fide proposal in writing by such person relating to a Competing Transaction, provided, however, that the Company or its representatives may do so only if and to the extent that: - the Company provides Parent with at least 24 hours' prior notice of any meeting of the Company Board at which the Company Board will consider such offer; - the Company Board, after duly considering the advice of outside legal counsel to the Company, determines in good faith that the failure to do so would be reasonably likely to constitute a breach of its fiduciary duties to stockholders imposed by applicable law; and - before, or concurrently with, furnishing any information to such person, the Company furnishes such information to Parent (to the extent not previously furnished). - complying with Rule 14d-9 or 14e-2 promulgated under the Exchange Act with regard to a Competing Transaction. - furnishing a copy of the non-solicitation provisions of the Merger Agreement to any person making an unsolicited bona fide proposal in writing related to a Competing Transaction. 24 30 - making any disclosure to the Company's stockholders if, in the good faith judgment of the Company Board, after duly considering the advice of outside legal counsel to the Company, failure to make such disclosure would be reasonably likely to constitute a breach of its fiduciary duties to stockholders imposed by applicable law. Under the Merger Agreement, neither the Company Board nor any committee thereof may: - withdraw or modify, or propose publicly to withdraw or modify, in any manner adverse to Parent, the Offer Recommendation (it being understood that any such modification is not adverse if a majority of the directors on the Company Board continue to favorably recommend the Offer and the Merger); - approve or recommend, or propose publicly to approve or recommend, any Competing Transaction; or - cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Competing Transaction (other than agreements relating solely to non-disclosure or "standstill" provisions). The Company Board, including any committee thereof, may take the actions described above so long as certain conditions specified in the Merger Agreement are met, including, without limitation, the termination by the Company of the Merger Agreement and the payment by the Company to Parent of the Company Termination Fee. The Company has further agreed that it will not terminate the Merger Agreement or enter into a binding agreement with respect to a Competing Transaction if Parent has, within 48-hours of receiving the Company's written notice of its intention to take one of the actions described immediately above, made a written offer that is at least as favorable to the Company's stockholders from a financial point of view (after considering all of the terms of such Competing Transaction), and, if the Competing Transaction is publicly known, has publicly announced its intention to make such offer. Representations and Warranties. The Merger Agreement contains customary representations and warranties of the parties thereto, including representations by the Company with respect to, among other things: its organization and qualification; its subsidiaries; its certificate of incorporation and bylaws; its capitalization and the capitalization of its subsidiaries; authority relative to the Merger Agreement and the Stock Option Agreement; no conflicts; required filings and consents; compliance with the law; permits; SEC filings; financial statements; absence of certain changes or events; undisclosed liabilities; litigation; customers; major contracts; employee benefit plans; labor matters; taxes; environmental matters; intellectual property; transactions with affiliates; certain business practices; insurance; properties; full disclosure and the opinion of its financial advisor. Certain representations and warranties in the Merger Agreement are qualified by "materiality" or by "Company Material Adverse Effect" on the Company. For purposes of the Merger Agreement and this Offer to Purchase, the term "Company Material Adverse Effect" means any change or effect, including prospective changes or effects, that, individually or when taken together with all other changes or effects, is or would reasonably be expected to be adverse to the assets, liabilities, financial condition, results of operations or business of the Company and its subsidiaries, taken as a whole, which changes or effects in relation to the assets, liabilities, financial condition, results of operations or business of the Company and its subsidiaries taken as a whole results or would reasonably be expected to result in damages, liabilities or expenses to the Company of $5,000,000 or more. The Merger Agreement further provides that none of the following will be deemed in themselves, either alone or in combination, to constitute a Company Material Adverse Effect, and none of the following will be taken into account in determining whether there has been or will be a Company Material Adverse Effect: (i) any changes in the trading price or trading volume for the Shares between October 11, 2000 and the Effective Time, (ii) the failure by the Company to meet internal projections or forecasts or published revenue or earning predictions for any period ending, or for which revenues or earnings are disclosed, on or after October 11, 2000, (iii) any change in the economy or securities markets of the United States or any other country or region in general, (iv) any change or effect resulting from the announcement of the 25 31 transactions contemplated by the Merger Agreement, (v) changes in law or generally accepted accounting principles, which affect generally entities such as Parent or the Company, (vi) any change or effect in the semiconductor or the semiconductor capital equipment industries in general, and not specifically the Company or its subsidiaries, (vii) any change or effect resulting from the taking of any actions by the Company that have been approved in writing by Parent, including those actions contemplated by the Merger Agreement, or (viii) any change or effect resulting from compliance by Parent, the Merger Sub or the Company with the terms of the Merger Agreement. Certain Covenants. The Company has agreed in the Merger Agreement that, before the purchase of a majority of the Shares in the Offer, the Company will, among other things, carry on its business solely in the ordinary course consistent with past practice and will not adopt any amendments to its certificate of incorporation or bylaws. In addition, the Company has agreed that, before the purchase of a majority of the Shares in the Offer, the Company will not, and will not permit any of its subsidiaries or authorize any of its representatives to, among other things, (i) acquire or agree to acquire, by merging or consolidating with, or by any other manner, any business or any other person or entity, (ii) declare or pay certain dividends or distributions, (iii) make certain changes to its capital structure, (iv) issue or sell securities except in certain limited circumstances, (v) sell, lease, or otherwise dispose of any material assets of its or any of its subsidiaries, except for dispositions of inventory in the ordinary course consistent with past practice and for certain sale/leaseback transactions, (vi) make certain payments to the members of its Board, its executive officers and its employees, (vii) take certain actions with respect to its benefit plans, (viii) incur additional debt above levels established in the Merger Agreement, (ix) enter into, amend, modify or terminate certain contracts, (x) make or agree to make additional capital expenditures above levels established in the Merger Agreement, or (xi) authorize or agree to do any of the foregoing. Proxy Statement. The Merger Agreement provides that, if required, the Company and Parent will promptly prepare, and the Company will file with the SEC a proxy statement to be distributed to the stockholders of the Company, along with a form of proxy, in connection with such stockholders' vote on the Merger and the Merger Agreement. Such proxy statement will, subject to the fiduciary duties of the Company Board, include the recommendation of the Company Board that the stockholders of the Company vote to approve the Merger and the Merger Agreement. Amendment of the Merger Agreement. The Merger Agreement may be amended by action taken by or on behalf of the Boards of Directors of Parent, the Merger Sub and the Company at any time before the Effective Time; provided, however, that, (i) before the Effective Time and from and after the time that the Merger Sub's designees constitute a majority of the Company Board, if applicable, any amendment to or termination of the Merger Agreement may be affected only with the affirmative vote of the majority of the Current Directors and Independent Directors who are then members of the Company Board, and (ii) after approval of the Merger by the stockholders of the Company, no amendment may be made that by law requires further approval by such stockholders without the further approval of such stockholders. The Merger Agreement may not be amended except by an instrument in writing signed on behalf of each of Parent, the Merger Sub and the Company. Indemnification of Officers and Directors. The Company has agreed to indemnify and hold harmless Parent and its directors and officers, and Parent has agreed to indemnify and hold harmless the Company and its directors and officers, from and against any loss, claim, damage, cost, liability, obligation or expense, including reasonable attorney's fees and costs of investigation, to which any indemnified party may become subject under the Exchange Act or otherwise, insofar as such loss, claim, damage, cost, liability, obligation or expense or actions in respect thereof arises out of or is based upon any untrue statement or alleged untrue statement of a material fact relating to, and supplied by, such indemnifying party and contained in the Offer Documents, the Information Statement, the Schedule 14D-9 or the Company Proxy Statement or arises out of or is based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein with respect to such indemnifying party not misleading. 26 32 Parent and the Merger Sub have agreed that until six years from the Effective Time, Parent will not permit the Certificate of Incorporation and Bylaws of the Surviving Corporation to be amended to reduce or limit the rights of indemnity afforded in such Certificate of Incorporation and Bylaws to the present and former directors and officers (the "Indemnified Persons") of the Company or to reduce or limit the ability of the Surviving Corporation to indemnify such persons, or to hinder, delay or make more difficult the exercise of such rights of indemnity or the ability to indemnify. If, within this period, the Surviving Corporation is merged with or into Parent or another subsidiary of Parent, the Certificate of Incorporation and Bylaws of Parent or such subsidiary will, for at least the six year period following the Effective Time, provide rights to indemnification for the Indemnified Persons at least equivalent to those in the Certificate of Incorporation and Bylaws of the Surviving Corporation. From and after the Effective Time, Parent will cause the Surviving Corporation or its successors (i) to exercise the powers granted to it by its Certificate of Incorporation, its Bylaws and by applicable law, as in effect on October 11, 2000, to indemnify to the fullest extent possible present and former directors and officers of the Company against claims made against them arising from their service in such capacities and (ii) to fulfill and honor in all respects the obligations of the Company under each agreement that provides for indemnification and is in effect between the Company and the Indemnified Persons at the Effective Time that has been disclosed to Parent. Should any claim or claims be made against any present or former director or officer of the Company, arising from his services as such, within six years of the Effective Time, the provisions of the Merger Agreement respecting the Certificate of Incorporation and Bylaws of the Surviving Corporation will continue in effect until the final disposition of all such claims. If after the Effective Time, the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person then, and in each such case, proper provision will be made so that the successors and assigns of the Surviving Corporation assume the indemnification obligations set forth above, including by providing rights to indemnification in their certificates of incorporation, bylaws, or other organizational documents at least equivalent to those in the Certificate of Incorporation and Bylaws of the Surviving Corporation. Notwithstanding anything to the contrary in the Merger Agreement, neither Parent nor the Surviving Corporation will be liable for any settlement effected without its written consent, which will not be unreasonably withheld. Until six years from the Effective Time, the Surviving Corporation has agreed to maintain in effect, for the benefit of the Indemnified Persons with respect to acts or omissions occurring before the Effective Time, directors' and officers' liability insurance which is substantially similar in coverage to that maintained by the Company as of October 11, 2000 (the "Existing Policy"); provided, however, that the Surviving Corporation will not be required to pay or cause to be paid annual premiums for the Existing Policy (or for any substitute policies) of more than 150% of the last annual premium paid by the Company before October 11, 2000. If any such future annual premiums exceed the 150% level, the Surviving Corporation may reduce the amount of coverage of the Existing Policy (or any substitute policies) to the amount of coverage that can be obtained for a premium equal to 150% of the last annual premium paid by the Company before October 11, 2000. Treatment of Company Stock Options. Before the Effective Time, Parent and the Company will take all such actions as may be necessary to cause each unexpired and unexercised stock option of the Company in effect on the date thereof which has been granted to current or former directors, officers, employees or consultants of the Company by the Company (each, an "Employee Option") to be cancelled and converted into the right to receive at the Effective Time, whether or not then vested or exercisable, an amount in cash equal to the product of (i) the number of Shares subject to such Employee Option and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject or related to such Employee Option. Treatment of Employee Stock Purchase Plan. Prior to, and conditioned upon, the purchase of a majority of the Shares under the Offer, the Company will take all such actions as may be necessary to provide that the Company's 1997 Employee Stock Purchase Plan, as amended (the "Company ESPP"), 27 33 will terminate on December 31, 2000. If the Effective Time occurs on or before December 31, 2000, each option to purchase Shares that is outstanding under the Company ESPP (each, an "ESPP Option") will automatically be assumed and converted at the Effective Time into the right to receive $8.10 in cash (the difference between $20.00 and the exercise price of each ESPP Option) on December 31, 2000 for each Share covered by such ESPP Option. If the Effective Time occurs after December 31, 2000, each ESPP Option outstanding on December 31, 2000 will entitle its holder to purchase Shares in accordance with the provisions of the Company ESPP. Treatment of Other Employee Benefits. The Company will take, on terms and conditions satisfactory to Parent, all such actions as may be necessary to amend its 401(k) plans before the purchase of a majority of the Shares under the Offer in order to exclude Parent and its subsidiaries as participating employers in the Company's 401(k) Plans. If any employee of the Company or any of its subsidiaries becomes eligible to participate in any employee benefit plan of Parent after the Effective Time, Parent, the Surviving Corporation and their subsidiaries will credit such employee's service with the Company or its subsidiaries, to the same extent as such service was credited under the similar employee benefit plans of the Company and its subsidiaries immediately before the Effective Time, for purposes of determining eligibility to participate in and vesting under, and for purposes of calculating the benefits under, such employee benefit plan of Parent. To the extent permitted by such employee benefit plan of Parent and applicable law, Parent, the Surviving Corporation and its subsidiaries will waive any pre-existing condition limitations, waiting periods or similar limitations under such employee benefit plan of Parent and will provide each such employee with credit for any co-payments previously made and any deductibles previously satisfied. Also, before the purchase of a majority of the Shares under the Offer, the Company may (i) pay bonuses to any member of the Company Board or executive officer not in excess of $1,000,000 in the aggregate for all directors and executive officers; (ii) pay bonuses (not including sales commissions payable in the ordinary course of business consistent with past practice) to any other employee of the Company not in excess of $25,000 in the aggregate for any individual employee and not in excess of $500,000 in the aggregate for all employees, in addition to payments required under agreements disclosed by the Company to Parent. In connection with the termination of their respective employment and change-in-control agreements, which the Company has advised Parent and the Merger Sub it intends to effect before the purchase of a majority of the Shares in the Offer, the Company will pay to (A) C. Zane Close, $1,394,823; (B) Randal L. Buness, $805,273; (C) Michael K. Bonham, $790,971; and (D) Daniel J. Hill, $1,387,207. In addition, Parent intends to enter into an employment agreement with C. Zane Close, the terms of which have not yet been negotiated. Composition of the Company Board Following the Merger. The directors and officers of the Merger Sub in office immediately before the Effective Time will be the directors and officers of the Surviving Corporation after the Effective Time, and these directors and officers shall serve under the Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified. The provisions of the Merger Agreement relating to the composition of the Company Board following the purchase of a majority of the Shares in the Offer and before the Effective Time are summarized in Section 11 of this Offer to Purchase. THE AFFILIATE TENDER AGREEMENT. The following is a summary of the Affiliate Tender Agreement, a copy of which has been filed with the SEC as an exhibit to the Schedule TO. This summary is not a complete description of the terms and conditions of the Affiliate Tender Agreement and is qualified in its entirety by reference to the Affiliate Tender Agreement. The following summary may not contain all of the information important to you. The Affiliate Tender Agreement may be examined, and copies obtained, as set forth in Section 8 of this Offer to Purchase. Capitalized terms used in the summary and not otherwise defined below shall have time meaning set forth in the Affiliate Tender Agreement. Certain of the stockholders of the Company who are also affiliates of the Company (the "Stockholders") entered into separate Affiliate Tender Agreements with Parent. Under these agreements, each Stockholder has separately agreed to tender, or cause the record holder to tender, into the Offer, as 28 34 promptly as reasonably possible and in any event before the tenth business day after the commencement of the Offer, all of the Shares beneficially owned by such Stockholder or any member of his Stockholder Group (as defined below) (the "Owned Shares"). The Stockholders are Donald Walter, Ross Mangano, Kenneth Miller, Zane Close, Michael Bonham, William Fresh, Randal Buness, and Daniel J. Hill, and based on the Company's published records they beneficially own approximately 930,050 Shares in the aggregate as of October 12, 2000 (excluding Shares issuable upon the exercise of options). Under the Affiliate Tender Agreements, each Stockholder has agreed that he will not, and each corporation and other person controlled by the Stockholder or any affiliate or associate thereof controlled by the Stockholder, other than the Company and its subsidiaries (collectively, the "Stockholder Group") will not, directly or indirectly, sell, assign, transfer, pledge or otherwise dispose of, or grant a proxy with respect to, any Owned Shares to any person other than Parent or its designee, or grant an option with respect to any of the foregoing, or enter into any other agreement or arrangement with respect to any of the foregoing, or otherwise designed to limit or transfer any of the benefits or risks of ownership. The Affiliate Tender Agreements also provide that each Stockholder shall not, and shall cause each other member of the Stockholder Group not to, solicit or knowingly encourage or take any other action to knowingly facilitate or induce, any inquiries or the making of any proposal that constitutes, or that may reasonably be expected to lead to, any Competing Transaction, or enter into discussions or negotiate with any person or entity in furtherance of any inquiries to obtain a Competing Transaction, or agree to, or endorse, any Competing Transaction. The Affiliate Tender Agreements require each Stockholder to promptly notify Parent of the material terms of any such inquiries or proposals received by the Stockholder, or any member of the Stockholder Group, and if such inquiry or proposal is in writing, the Stockholder must deliver or cause to be delivered to Parent a copy of such inquiry or proposal. Each Stockholder has agreed, if requested by Parent, not to, and that it shall cause each member of the Stockholder Group not to, vote any Owned Shares at any annual or special meeting of stockholders, or execute any written consent of stockholders, during such period. Each Stockholder has also agreed to take all affirmative steps reasonably requested by Parent to indicate its full support for the Offer and the Merger, and under the Affiliate Tender Agreements, each Stockholder consents to Parent's announcement in any press release, public filing, advertisement or other document, that the Stockholder, as a stockholder of the Company, fully supports the Offer and the Merger. THE STOCK OPTION AGREEMENT. The following is a summary of the Stock Option Agreement, a copy of which has been filed as an exhibit to the Schedule TO. This summary is not a complete description of the terms and conditions of the Stock Option Agreement and is qualified in its entirety by reference to the Stock Option Agreement. The following summary may not contain all of the information important to you. The Stock Option Agreement may be examined, and copies obtained, as set forth in Section 8 of this Offer to Purchase. Capitalized terms used in the following summary and not otherwise defined below shall have the meaning set forth in the Stock Option Agreement. Under the Stock Option Agreement, the Company has granted Parent an irrevocable option (the "Company Option") to purchase from the Company upon original issue from time to time up to a number of Shares equal to 19.9% of the total Shares outstanding on October 11, 2000, subject to adjustment as described below, at an initial exercise price of $20 per Share (the "Exercise Price"). The Company option is not presently exercisable and will not become exercisable except as described in the next sentence. The Company Option may be exercised by Parent, in whole or in part, immediately before, and subject to the consummation of, a "Trigger Event." A "Trigger Event" occurs if (i) the Merger Agreement is terminated by Parent or the Company under circumstances that would entitle Parent to the Company Termination Fee under the Merger Agreement, and (ii) within 9 months after such termination the Company consummates a Competing Transaction with or by any person or entity. 29 35 The Stock Option Agreement provides that the Company Option will terminate upon the earlier of (i) the Effective Time of the Merger; or (ii) the date that is nine months after termination of the Merger Agreement or if, at the expiration of such nine month period the Company Option cannot be exercised by reason of any applicable judgment, decree, order, law or regulation, ten business days after such impediment to exercise is removed or has become final and not subject to appeal. The Stock Option Agreement also provides (i) Parent with registration rights with respect to the Shares purchased under the Stock Option Agreement, (ii) Parent the ability to acquire the Shares purchased under the Stock Option Agreement by means of a cashless exercise, and (iii) that, in the event of any change in the Shares by reason of stock dividends, splitups, mergers (other than the Merger), recapitalizations, combinations, exchange of shares or the like, the type and number of Shares or securities subject to the Company Option, and the purchase price per Share shall be adjusted appropriately to restore to Parent its rights thereunder, including the right to purchase from the Company (or its successors) Shares representing 19.9% of the outstanding Common Stock on October 11, 2000 for the same aggregate exercise price. In addition, under the Stock Option Agreement Parent has agreed that, in connection with any registered underwritten offering of Company Common Stock, Parent will not, and will not permit any of its subsidiaries to, sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of, any Company Common Stock held by Parent or any of its subsidiaries for a period specified by the representative of the underwriters of Company Common Stock not to exceed one hundred eighty (180) days following the effective date of the applicable registration statement of the Company filed under the Securities Act of 1933, as amended; provided however that the Company's officers, directors and stockholders required to file reports under Section 16 of the Exchange Act are also so limited. APPRAISAL RIGHTS. Holders of the Shares do not have appraisal rights as a result of the Offer. However, if the Merger is consummated, each holder of the Shares who has neither voted in favor of the Merger nor consented to the Merger in writing will be entitled under Section 262 of the DGCL to an appraisal by the Delaware Court of Chancery of the fair value of his or her Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, and to receive payment of such fair value in cash, together with a fair rate of interest, if any. In determining such fair value, the Court may consider all relevant factors. The value so determined could be more or less than the consideration to be paid in the Offer and the Merger. Any judicial determination of the fair value could be based upon considerations other than or in addition to the market value of the Shares, including, asset values and earning capacity. If any holder of the Shares who demands appraisal under Section 262 of the DGCL fails to perfect, or effectively withdraws or loses, his right to appraisal as provided in the DGCL, the Shares of such stockholder will be converted into the right to receive the Merger Consideration under the Merger Agreement. A stockholder may withdraw his demand for appraisal by delivery to Parent of a written withdrawal of his demand for appraisal and acceptance of the Merger. The foregoing discussion is not a complete statement of law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL. FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS. RULE 13e-3. The Merger would have to comply with any applicable Federal law operative at the time of its consummation. Rule 13e-3 under the Exchange Act is applicable to "going private" transactions. The Merger Sub does not believe that Rule 13e-3 will be applicable to the Merger unless the Merger is consummated more than one year after the termination of the Offer. If applicable, Rule 13e-3 would require, among other things, that financial information concerning the Company and information relating to the fairness of the Merger and the consideration offered to minority stockholders be filed with the SEC and disclosed to minority stockholders before consummation of the Merger. 30 36 The Rights presently are transferable only with the certificates for the Shares and the surrender for transfer of certificates for any Shares will also constitute the transfer of the Rights associated with the Shares represented by such certificates. The Company has amended the Rights Agreement to provide that (i) neither Parent nor the Merger Sub, nor any affiliate of Parent or the Merger Sub, will be deemed to be an Acquiring Person or entity in connection with the transactions contemplated by the Merger Agreement, (ii) the Rights will not separate from the Common Stock as a result of the execution, delivery or performance of the Merger Agreement, the Stock Option Agreement or the consummation of the Offer or the Merger or any of the other transactions contemplated thereby, and (iii) none of the Company, the Merger Sub or the Surviving Corporation, nor any of their respective affiliates, will have any obligations under the Rights Agreement to any holder (or former holder) of Rights as of or following the consummation of the Offer or following the Effective Time. 12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the Merger Sub and Parent to consummate the Offer and the Merger and to pay related fees and expenses is estimated to be approximately $225 million. The Offer is not conditioned upon any financing arrangements. The Merger Sub will obtain all necessary funds required to consummate the transaction through capital contributions or advances made by Parent. Parent plans to make these contributions or advances from funds on hand. Parent may also obtain a portion of such funds through borrowings under its bank credit facility with PNC Bank (the "Credit Facility"), although it has no present intention to do so. A summary of the Credit Facility is incorporated by reference to Parent's Form 10-K for the fiscal year ended September 30, 1999 filed with the SEC on December 21, 1999, and a copy of the credit agreement providing for the Credit Facility has been filed with the SEC as an exhibit to Parent's Quarterly report on Form 10-Q for the quarterly period ended March 31, 1998. This credit agreement may be examined at, and copies thereof may be obtained from, the offices of the SEC in the same manner as set forth in Section 8 above. 13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer or the Merger Agreement, in addition to the Merger Sub's rights under the Merger Agreement to extend and amend the Offer, the Merger Sub will not be required to accept for payment or, subject to Rule 14e-1(c) of the Exchange Act, pay for and may delay the acceptance for payment of or, subject to Rule 14e-1(c) of the Exchange Act, the payment for, any of the Shares not theretofore accepted for payment or paid for, and the Merger Sub may, subject to the Merger Agreement, terminate or amend the Offer if (i) a number of the Shares representing at least a majority of the total number of the outstanding Shares has not been validly tendered and not withdrawn immediately before the expiration of the Offer or otherwise acquired by Parent or any of its affiliates before the expiration of the Offer ("Minimum Condition"), (ii) any applicable waiting period under the HSR Act has not expired or been terminated or (iii) at any time on or after the date of the Agreement and before the time of acceptance of such the Shares for payment or the payment therefor, any of the following conditions has occurred and continues to exist: (1) any of the representations and warranties of the Company in the Merger Agreement is inaccurate as of October 11, 2000 or as of such time, except to the extent that such representations and warranties speak as of another date, in which case such representations and warranties shall be accurate as of such other date, and which inaccuracy shall not have been cured in all material respects by the Scheduled Expiration Date (as defined below) or, if the Offer is extended as permitted by the Merger Agreement, by the Extended Expiration Date (as defined below), except that any inaccuracies of such representations and warranties will be disregarded if the circumstances giving rise to such inaccuracies do not constitute or effect, individually or in the aggregate, a Company Material Adverse Effect (as defined in Section 11); provided however, that, (A) notwithstanding the foregoing, the representations and warranties relating to the 31 37 Company's capitalization shall have been true and correct in all material respects, without giving effect to any limitations as to materiality in such representations and warranties, and (B) no update of or modification to the Company's disclosure schedules made, or purported to have been made, after October 11, 2000 will be regarded in determining whether such representation or warranty is true and correct. (2) the Company or any of its subsidiaries fails to carry on their respective businesses solely in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws, permits and contracts, or to use reasonable efforts to preserve intact their current business organizations, other than internal organizational realignments, keep available the services of their current officers and other key employees and preserve their relationships with customers, suppliers, licensors, lessors, distributors and others having business dealings with them, except where the failure to do so would not have, individually or in the aggregate, a Company Material Adverse Effect, and such failure is neither waived by Parent nor cured in all material respects by the Company by the Scheduled Expiration Date or by any Extended Expiration Date. (3) the Company fails to perform or comply in all material respects with its other covenants and agreements contained in the Merger Agreement that the Company is required to perform or comply with and such failure to perform or comply is neither waived by Parent nor cured in all material respects by the Company by the Scheduled Expiration Date or by any Extended Expiration Date. (4) (i) there is pending any suit, action, or proceeding by any Governmental Entity (as defined in the Merger Agreement) (A) challenging the acquisition by Parent or the Merger Sub of the Shares, or seeking to restrain or prohibit the making or consummation of the Offer and the Merger or the performance of any of the other transactions contemplated by the Merger Agreement which are necessary for the making or consummation of the Offer or the Merger, or seeking to obtain from the Company any damages that, if such suit, action, or proceeding is successful, would result in a Company Material Adverse Effect, (B) seeking, as a result of the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement, to (1) prohibit or limit the ownership or operation by the Company, Parent or any of their respective subsidiaries or affiliates of any of the businesses or assets of the Company, Parent or any of their respective subsidiaries or affiliates, or (2) compel the Company, Parent or any of their respective subsidiaries or affiliates to dispose of or hold separate any of the material businesses or assets of the Company, Parent or any of their respective subsidiaries or affiliates, whereby, in the case of clauses (1) and (2) such suit, action or proceeding, if successful, would result in a Company Material Adverse Effect, (C) seeking to impose material limitations on the ability of Parent or the Merger Sub to acquire or hold, or exercise full rights of ownership of, any of the Shares accepted for payment under the Offer including, without limitation, the right to vote the Shares accepted for payment by it on all matters properly presented to the stockholders of the Company, (D) seeking to prohibit Parent or any of its subsidiaries or affiliates from effectively controlling in any material respect the business or operations of the Company or its subsidiaries which, if successful, would result in a Company Material Adverse Effect, or, (E) requiring divestiture by the Merger Sub or any of its affiliates of any of the Shares, or (ii) the Company, Parent or the Merger Sub shall have received a written notice from any Governmental Entity stating that such entity is taking affirmative action that would be reasonably likely to result in the filing or commencement of any suit, action or proceeding relating to any actions described in clauses (A) through (E) of this subsection (4). (5) There shall have been entered, enacted, promulgated, enforced or issued by any court or other Government Entity of competent jurisdiction any judgment, order, decree, statute, law, ordinance, rule or regulation, or any other legal restraint or prohibition shall be in effect, (i) preventing the consummation of the Offer or the Merger or (ii) prohibiting or limiting the ownership or operation by Parent or the Company and their respective subsidiaries of any material portion of the business or assets of Parent or the Company and their respective subsidiaries, taken as a 32 38 whole, or (iii) compelling Parent or the Company and their respective subsidiaries to dispose of or hold separate any portion of the business or assets of Parent or the Company and their respective subsidiaries, taken as a whole, which (A) in the case of either clause (ii) or (iii), would result in a Company Material Adverse Effect or a Parent Material Adverse Effect (as defined below), except if such prohibition or restraint relating to clauses (i), (ii) and (iii) arises under (1) any antitrust, competition or similar statute, law, rule or regulation of any jurisdiction outside the United States of America, or (2) any other statute, law, rule or regulation of any jurisdiction outside the United States of America, or (B) in the case of clauses (i), (ii) and (iii), would reasonably be expected to subject any officer, director, employee or stockholder of the Company or Parent to any civil or criminal liability. (6) the Merger Agreement shall have been terminated under its terms. (7) any person or group, which includes a "person" or "group" as such terms are defined in Section 13(d)(3) of the Exchange Act, other than Parent, the Merger Sub, any of their affiliates, or any group of which any of them is a member, shall have acquired beneficial ownership of more than 20% of the outstanding the Shares. (8) all consents and approvals of and notices to or filings with Governmental Entities required in connection with the Offer shall not have been made or obtained. The foregoing conditions are for the sole benefit of Merger Sub and Parent and may be asserted by the Merger Sub or Parent regardless of the circumstances giving rise to any such condition and may be waived by the Merger Sub or Parent, in whole or in part, at any time and from time to time, in the sole discretion of the Merger Sub or Parent. The failure by the Merger Sub or Parent or any of their respective affiliates at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each right will be deemed an ongoing right which may be asserted at any time and from time to time. For purposes of this Offer to Purchase, the term (i) "Scheduled Expiration Date" means November 21, 2000, (ii) "Extended Expiration Date" means any date to which the Offer has been extended as permitted by the terms of the Merger Agreement and (iii) "Parent Material Adverse Effect" means any change or effect (including prospective changes or effects) that, individually or when taken together with all other changes or effects, is or would reasonably be expected to be materially adverse to the assets, liabilities, financial condition, results of operations or business of Parent and its subsidiaries, taken as a whole, provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has or will be a Parent Material Adverse Effect: (a) any changes in the trading price or the trading volume for the shares of common stock, without par value, of Parent between October 11, 2000 and the Effective Time, (b) the failure by Parent to meet internal projections or forecasts or published revenue or earning predictions for any period ending (or for which revenues or earnings are disclosed) on or after the date hereof, (c) any change in the economy or securities markets of the United States or any other country or region in general, (d) any change or effect resulting from the announcement of the transactions contemplated hereby, (e) changes in law or generally accepted accounting principles, which affect generally entities such as Parent or the Company, (f) any change or effect in the semiconductor or the semiconductor capital equipment industries in general, and not specifically Parent or its subsidiaries or (g) any change or effect resulting from compliance by any of the parties hereto with the terms of the Merger Agreement. 14. DIVIDENDS AND DISTRIBUTIONS. The Company has not paid dividends during at least the past two years. According to the Company, the Company's credit facility contains restrictions on the Company's ability to pay dividends. In addition, pursuant to the Merger Agreement, the Company has agreed that during the term of the Merger Agreement the Company may not declare, set aside or pay any dividend or any other distribution with 33 39 respect to the Shares except for dividends by a subsidiary of the Company to the Company or a wholly owned subsidiary of the Company. 15. CERTAIN LEGAL MATTERS. GENERAL. Except as otherwise disclosed in this Offer to Purchase, based upon an examination of publicly available filings with respect to the Company, Parent and the Merger Sub are not presently aware of any licenses or other regulatory permits which appear to be material to the business of the Company and which would be adversely affected by the acquisition of the Shares by the Merger Sub under the Offer or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the acquisition or ownership of the Shares by the Merger Sub under the Offer. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought or taken. There can be no assurance that any such approval or action, if needed, would be obtained or, if obtained, that it will be obtained without substantial conditions or that adverse consequences might not result to the Company's or Parent's business or that parts of the Company's or Parent's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken, any of which might enable the Merger Sub to elect to terminate the Offer without the purchase of the Shares thereunder, if the relevant conditions to termination were met. The Merger Sub's obligation under the Offer to accept for payment and pay for the Shares is subject to certain conditions. See Section 13. ANTITRUST COMPLIANCE. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission ("FTC"), certain acquisition transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and waiting period requirements have been satisfied. The acquisition of the Shares by the Merger Sub is subject to these requirements. See "Introduction" of this Offer to Purchase as to the effect of the HSR Act on the timing of the Merger Sub's obligation to accept Shares for payment. Under the HSR Act, Parent filed a Notification and Report Form with respect to the acquisition of the Shares under the Offer and the Merger with the Antitrust Division and the FTC on October 18, 2000. Under the provisions of the HSR Act applicable to the purchase of the Shares under the Offer, such purchases may not be made until the expiration of a 15-calendar day waiting period following the filing by Parent. Accordingly, the waiting period under the HSR Act will expire at 11:59 p.m., New York City time, on November 2, 2000, unless early termination of the waiting period is granted or Parent receives a request for additional information or documentary material. Pursuant to the HSR Act, Parent has requested early termination of the waiting period applicable to the Offer. There can be no assurances given, however, that the 15-day HSR Act waiting period will be terminated early. If either the FTC or the Antitrust Division were to request additional information or documentary material from Parent, the waiting period would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request unless the waiting period is sooner terminated by the FTC or the Antitrust Division. Thereafter, the waiting period could be extended only by agreement or by court order. Only one extension of such waiting period under a request for additional information is authorized by the rules promulgated under the HSR Act, except by agreement or by court order. Any such extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. See Section 4. Parent expects the waiting period under the HSR Act to expire at the end of the 15-day period, if not earlier terminated. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the proposed acquisition of the Shares by the Merger Sub under the Offer. At any time before or after the Merger Sub's purchase of the Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of the Shares under the Offer or seeking divestiture of the Shares acquired by the Merger Sub or the divestiture of substantial assets of Parent, the Company or any of their respective subsidiaries. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be 34 40 made or, if a challenge is made, what the result will be. See Section 13 of this Offer to Purchase for conditions to the Offer that could become applicable in the event of such a challenge. STATE TAKEOVER LAWS. Section 203 of the DGCL limits the ability of a Delaware corporation to engage in business combinations with "interested stockholders" (defined generally as any beneficial owner of 15% or more of the outstanding voting stock in the corporation) unless, among other things, the corporation's board of directors has given its prior approval to either the business combination or the transaction which resulted in the stockholder becoming an "interested stockholder." The Company Board has approved the Merger Agreement and the Merger Sub's acquisition of the Shares under the Offer and the Stock Option Agreement and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the Merger. The Merger Sub does not believe that any state takeover laws purport to apply to the Offer or the Merger. None of Parent or the Merger Sub has currently complied with any state takeover statute or regulation. The Merger Sub reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer or the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Merger is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer or the Merger and if an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Merger Sub might be required to file information with, or to receive approvals from, the relevant state authorities, and the Merger Sub might be unable to accept for payment or pay for any Shares tendered under the Offer, or be delayed in consummating the Offer or the Merger. In such case, the Merger Sub may not be obligated to accept for payment or pay for any shares tendered under the Offer. 16. FEES AND EXPENSES. Georgeson Shareholder Securities Corporation is acting as Dealer Manager in connection with the Offer. Parent has agreed to pay Georgeson Shareholder Securities Corporation reasonable and customary compensation for its services as Dealer Manager. Parent has also agreed to reimburse Georgeson Shareholder Securities Corporation for its reasonable out-of-pocket expenses, including the fees and expenses of its counsel, in connection with the Offer, and has agreed to indemnify Georgeson Shareholder Securities Corporation against certain liabilities and expenses in connection with the Offer, including liabilities under the Federal securities laws. At any time Georgeson Shareholder Securities Corporation and its affiliates may actively trade the Shares for their own account or for the account of customers and, accordingly, may at any time hold a long or short position in the Shares. Corporate Investors Communications, Inc. is acting as Information Agent in connection with the Offer. The Information Agent may contact holders of the Shares by personal interview, mail, telephone, telex, telegraph and other methods of electronic communication and may request brokers, dealers, banks, trust companies and other nominees to forward the Offer materials to beneficial holders. The Information Agent will receive reasonable and customary compensation for its services, be reimbursed for reasonable out-of-pocket expenses and be indemnified against certain liabilities and expenses in connection with its services, including certain liabilities under the federal securities laws. The Merger Sub will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including liabilities under the Federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Merger Sub for customary mailing and handling expenses incurred by them in forwarding material to their customers. 17. MISCELLANEOUS. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of the Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, the Merger Sub may, in its sole discretion, take 35 41 such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of the Shares in such jurisdiction. None of Parent or the Merger Sub is aware of any state where the making of the Offer is prohibited by administrative or judicial action under any valid state statute. If either Parent or the Merger Sub becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, the Merger Sub will make a good faith effort to comply with such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Merger Sub cannot comply with such state statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of the Shares in such state. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Merger Sub by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdictions. Parent and the Merger Sub have filed a Schedule TO with the SEC under Rule l4d-3 of the General Rules and Regulations under the Exchange Act, furnishing additional information with respect to the Offer, and may file amendments thereto. The Schedule TO and any amendments thereto, including exhibits, may be examined and copies may be obtained from the principal office of the SEC in Washington, D.C. in the manner set forth in Section 8. No person has been authorized to give any information or make any representation on behalf of Parent or the Merger Sub not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. CARDINAL MERGER SUB., INC. October 25, 2000 36 42 SCHEDULE A INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF KULICKE AND SOFFA INDUSTRIES, INC. AND MERGER SUB 1. DIRECTORS AND EXECUTIVE OFFICERS OF KULICKE AND SOFFA INDUSTRIES, INC. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years, of each member of the Board of Directors and executive officers of Kulicke and Soffa Industries, Inc. Unless otherwise indicated, each such person is a citizen of the United States of America and the business address of each such person is c/o Kulicke and Soffa Industries, Inc., 2101 Blair Mill Road, Willow Grove, Pennsylvania 19090. Unless otherwise indicated, each such person has held his or her present occupation as set forth below, or has been an executive officer at Kulicke and Soffa Industries, Inc. for the past five years. DIRECTORS OF KULICKE AND SOFFA INDUSTRIES, INC.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - ---- -------------------------------------------------- Philip V. Gerdine, age 61.......... Independent Consultant. From September 1989 to September 1998, served as Executive Director, Siemens AG and as managing director of the Plessey Company. Formerly, Vice President-Corporate Development of Siemens Corporation. Has held senior management positions with General Electric Co., Price Waterhouse and The Boston Consulting Group. Currently a director of Applied Materials, Inc. and Solectron Corporation. C. Scott Kulicke, age 51........... Chairman of the Board and Chief Executive Officer of Kulicke and Soffa Industries, Inc. Also serves on the Board of Directors of General Semiconductor, Inc. and Xetel Corporation. John A. O'Steen, age 56............ Executive Vice President of Operations (since July 1998) and Executive Vice President (January to June 1998) of Cornerstone Brands, Inc., a consumer catalog company. From 1991 to 1998, Chairman and Chief Executive Officer of Cinmar, L.P., a mail order catalog company acquired by the predecessor of Cornerstone Brands in September 1995. Formerly, President, Chief Executive Officer and a director of Cincinnati Microwave, Inc., a manufacturer of electronic products. Currently, a director of Cornerstone Brands, Inc. and Bill's Dollar Stores, Inc. Address: 5568 West Chester Road, West Chester, OH 45069. Allison F. Page, age 77............ Retired partner in the Philadelphia law firm of Pepper Hamilton LLP MacDonell Roehm, Jr., age 61....... Chairman of Australian Ventures LLC, a private equity fund focusing on emerging company investments in Australia and New Zealand, since 1999. Chairman and Chief Executive Officer of Crooked Creek Capital LLC, a provider of strategic, operational and financial restructuring services, since 1998. Former Chairman, President and Chief Executive Officer of Bill's Dollar Stores, Inc., a chain of retail convenience stores, from 1994 to March 1998. Prior to that time, Managing Director of AEA Investors, Inc., a private investment firm. Also serves on the Board of Directors of Tower Technology Pty., Ltd.
A-1 43
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - ---- -------------------------------------------------- Larry D. Striplin, Jr., age 70..... Chairman of the Board and Chief Executive Officer of Nelson-Brantley Glass Contractors, Inc., a glass contractor, and Circle "S" Properties, Inc., a real estate rental company. Chairman of Circle "S" Industries, Inc. and American Fine Wire Corp. before their acquisition by Kulicke and Soffa Industries Inc. in 1995. Currently, a director of HealthSouth Corporation, The Banc Corporation and the Bank of Birmingham. Address: 2924 Third Avenue S., Birmingham, AL 35233. C. William Zadel, age 57........... Chairman, President and Chief Executive Officer of Millipore Corporation, a global manufacturer of filtration and purification products and former President and Chief Executive Officer of Ciba-Corning Diagnostics Corp., a manufacturer and distributor of medical diagnostic products. Currently, a director of Matritech, Inc. Address: 80 Ashby Road, Bedford, MA 01730.
EXECUTIVE OFFICERS OF KULICKE AND SOFFA INDUSTRIES, INC.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - ---- -------------------------------------------------- C. Scott Kulicke, age 51........... Chief Executive Officer Morton K. Perchick, age 63......... Executive Vice President, Office of the President. Appointed to Kulicke and Soffa Industries, Inc.'s newly created Office of the President in May 2000. Named Executive Vice President in July 1995. Joined Kulicke and Soffa Industries, Inc. in September 1980 as Director, Quality and Reliability. He became Vice President in 1982 and moved to general management in 1986, when he assumed responsibility for operations. In 1990, he was appointed Senior Vice President/General Manager. Alexander A. Oscilowski, age 41.... Senior Vice President, Office of the President. Joined Kulicke and Soffa Industries, Inc. in June 1999 as Vice President, Strategic Marketing. In May 2000, he was appointed to the newly created Office of the President. Joined SEMATECH in 1993 as director of Assembly & Packaging and was director of Advanced Technology until January 1999. Previously served as semiconductor packaging manager in the semiconductor operations unit for Digital Equipment and was an assembly manager, packaging supervisor and process engineer at Texas Instruments. Clifford G. Sprague, age 56........ Senior Vice President and Chief Financial Officer. Joined Kulicke and Soffa Industries, Inc. as Vice President and CFO in March 1989. In May 1990 he was promoted to Senior Vice President. Prior to joining Kulicke and Soffa Industries, Inc., he served for more than five years as Vice President and Controller of the Oilfield Equipment Group of NL Industries, Inc.
A-2 44
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - ---- -------------------------------------------------- David A. Leonhardt, age 42......... Senior Vice President and Co-President of the Advanced Bonding Systems Group. Promoted to Senior Vice President and Co-President of Kulicke and Soffa Industries, Inc. Advanced Bonding Systems Group in November 1999. In March 1998, became Vice Present and General Manager of the Equipment Group, after serving as Vice President of Strategic Marketing since December of 1996. Prior to that, he spent four years as Director of the Ball Bonder Division and a year as Product Manager for Wedge Bonder Products. Laurence P. Wagner, age 40......... Senior Vice President and Co-President of the Advanced Bonding Systems Group. Joined Kulicke and Soffa Industries, Inc. in 1998 as Senior Vice President and President, Kulicke and Soffa Industries, Inc. Packaging Materials. In November 1999, was promoted to Senior Vice President and Co-President of the Advanced Bonding Systems Group. Previously was with Emcore Corporation, where he was vice president of Emcore Electronic Materials. Prior to 1996, Mr. Wagner worked for the Shipley Company LLC, a Division of Rohm and Haas Company in a number of progressively responsible positions. Charles J. Salmons, age 45......... Senior Vice President, Customer Operations, appointed in 1999. Joined Kulicke and Soffa Industries, Inc. in 1978, and has held positions of increasing responsibility throughout the accounting, engineering, and manufacturing organizations. In 1994 he became Vice President of Operations and was named General Manager, Wire Bonder Operations in 1998.
2. DIRECTORS AND EXECUTIVE OFFICERS OF CARDINAL MERGER SUB., INC. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years, of each director and executive officer of Cardinal Merger Sub., Inc. Each such person is a citizen of the United States of America, unless otherwise noted, and the business address of each such person is c/o Kulicke and Soffa Industries, Inc., 2101 Blair Mill Road, Willow Grove, Pennsylvania 19090.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH CARDINAL MERGER SUB., INC.; NAME OTHER MATERIAL NAME POSITIONS HELD DURING THE PAST FIVE YEARS ---- --------------------------------------------------------------------------- C. Scott Kulicke, age 51........... President, Director of Cardinal Merger Sub., Inc. See above for other material positions. Clifford G. Sprague, age 56........ Vice President, Director of Cardinal Merger Sub., Inc. See above for other material positions. Morton K. Perchick, age 63......... Vice President, Director of Cardinal Merger Sub., Inc. See above for other material positions. Robert F. Amweg, age 47............ Vice President, Treasurer of Cardinal Merger Sub., Inc. Joined Kulicke and Soffa Industries, Inc. in February, 1997 as its Treasurer and was promoted to Vice President, Treasurer in 2000. Prior to joining Kulicke and Soffa Industries, Inc., was Vice President, Finance and Chief Financial Officer of XYAN, Inc., a printing and related services company.
A-3 45
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH CARDINAL MERGER SUB., INC.; NAME OTHER MATERIAL NAME POSITIONS HELD DURING THE PAST FIVE YEARS ---- --------------------------------------------------------------------------- Jeffrey C. Moore, age 44........... Secretary of Cardinal Merger Sub., Inc. General Counsel of Kulicke and Soffa Industries, Inc. since October, 1996. Prior to joining Kulicke and Soffa Industries, Inc., General Counsel of Envirosource Treatment & Disposal Services, Inc. and an attorney with Air Products and Chemicals, Inc. Susan L. Waters, age 44............ Assistant Secretary of Cardinal Merger Sub., Inc. Secretary of Kulicke and Soffa Industries, Inc. since 1995. Assistant Secretary of Kulicke and Soffa Industries, Inc. from 1984 to 1995. Assistant to the Chairman since 1980.
A-4 46 Manually signed facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for the Shares and any other required documents should be sent or delivered by each stockholder of the Company or his broker-dealer, commercial bank, trust company or other nominee to the Depositary as follows: The Depositary for the Offer is: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Delivery: Wall Street Station Receive Window P.O. Box 1023 Wall Street Plaza New York, NY 10268-1023 88 Pine Street, 19th Floor New York, NY 10005
By Facsimile Transmissions: (for Eligible Institutions only) (212) 701-7636 For Information (call collect): (212) 701-7624 Any questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery and related materials may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: CORPORATE INVESTOR COMMUNICATIONS, INC. 111 Commerce Road, Carlstadt, New Jersey 07072-2586 Banks and Brokers call collect (201) 896-1900 All others call Toll Free (888) 682-7239 The Dealer Manager for the Offer is: [GEORGESON SHAREHOLDER LOGO] EX-99.(A)(2) 3 w41645ex99-a2.txt LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) OF CERPROBE CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 25, 2000 BY CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Delivery: Wall Street Station Receive Window P.O. Box 1023 Wall Street Plaza New York, NY 10268-1023 88 Pine Street, 19th Floor New York, NY 10005
By Facsimile Transmissions: (for Eligible Institutions only) (212) 701-7636 For Information (call collect): (212) 701-7624 - --------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF THE SHARES TENDERED SHARES TENDERED (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) - --------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) - --------------------------------------------------------------------------------------------------------------------- NUMBER OF SHARES NUMBER CERTIFICATE REPRESENTED BY OF SHARES NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2) -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- TOTAL SHARES - --------------------------------------------------------------------------------------------------------------------- 1. Need not be completed by Book-Entry Stockholders. 2. Unless otherwise indicated, all shares represented by share certificates delivered to the Depositary will be deemed to have been tendered. See instruction 4. [ ] Check here if certificates have been lost, destroyed or mutilated. See instruction 11. Number of shares represented by lost, destroyed or mutilated certificates: ------------------------------------------------------------------------------------------------------------------ - ---------------------------------------------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. 2 This Letter of Transmittal is to be used by stockholders of Cerprobe Corporation if certificates for the Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in Instruction 2 below) is used, if delivery of the Shares is to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in and pursuant to the procedures set forth in Section 3 of the Offer to Purchase dated October 25, 2000 (the "Offer to Purchase")). Holders who deliver Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders" and other stockholders who deliver Shares are referred to herein as "Certificate Stockholders." Stockholders whose certificates for the Shares are not immediately available or who cannot deliver either the certificates for, or a Book-Entry Confirmation (as defined in Section 3 of the Offer to Purchase) with respect to, their Shares and all other documents required hereby to the Depositary before the Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution ---------------------------------------------------------------------------- Account Number ---------------------------------------------------------------------------- Transaction Code Number ---------------------------------------------------------------------------- [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s) ---------------------------------------------------------------------------- Window Ticket Number (if any) ---------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery ---------------------------------------------------------------------------- Name of Institution that Guaranteed Delivery ---------------------------------------------------------------------------- If delivered by Book-Entry Transfer, check box: [ ] Account Number ---------------------------------------------------------------------------- Transaction Code Number ---------------------------------------------------------------------------- 2 3 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Cardinal Merger Sub., Inc., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc. ("Parent"), a Pennsylvania corporation, the above-described shares of common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares"), of Cerprobe Corporation, a Delaware corporation (the "Company"), at $20.00 per Share, net to the seller in cash (the "Common Stock Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 25, 2000 (the "Offer to Purchase") and in this related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The undersigned understands that Purchaser reserves the right, subject to the terms of the Merger Agreement, to transfer or assign, in whole at any time, or in part from time to time, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for any Shares validly tendered and accepted for payment pursuant to the Offer. The undersigned hereby acknowledges receipt of the Offer. Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all non-cash dividends, distributions, rights, other shares of common stock or other securities issued or issuable in respect thereof on or after October 11, 2000 (collectively, "Distributions")) and irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates for such Shares (and any and all Distributions), or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of the Company, and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints Jeffrey C. Moore and Clifford G. Sprague in their respective capacities as officers of Purchaser, and any individual who shall thereafter succeed to any such offices of Purchaser, and each of them, and any other designees of Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, (i) to vote at any annual or special meeting of the Company's stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper with respect to, (ii) to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper with respect to, and (iii) to otherwise act as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by Purchaser. This appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of the Company's stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, that the undersigned owns the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that the tender of the tendered Shares complies with Rule 14e-4 under the Exchange Act, and that 3 4 when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price the amount or value of such Distribution as determined by Purchaser in its sole discretion. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. This tender is irrevocable; provided that Shares tendered pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date and, unless theretofore accepted for payment as provided in the Offer to Purchase, may also be withdrawn at any time after December 24, 2000, subject to the withdrawal rights set forth in Section 4 of the Offer to Purchase. The undersigned understands that the valid tender of the Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment, (including the undersigned's rights of withdrawal as described in Section 4 of the Offer to Purchase. Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the terms of the Offer to Purchase, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, Purchaser may not be required to accept for payment any of the Shares tendered hereby. Unless otherwise indicated under "Special Payment Instructions," please issue the check for the purchase price of all Shares purchased and/or return any certificates for any Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under "Description of the Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price of all Shares purchased and/or return any certificates for any Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of the Shares Tendered." If the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and/or return any certificates evidencing Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and/or return any such certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation pursuant to the "Special Payment Instructions" to transfer any Shares from the name of the registered holder thereof if Purchaser does not accept for payment any of the Shares so tendered. 4 5 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of the Shares accepted for payment is to be issued in the name of someone other than the undersigned, if certificates for any Shares not tendered or not accepted for payment are to be issued in the name of someone other than the undersigned or if any Shares tendered hereby and delivered by book-entry transfer that are not accepted for payment are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than the account indicated above. Issue check and/or stock certificate(s) to: Name --------------------------------------------------------------------------- (PLEASE PRINT) Address ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (ZIP CODE) - -------------------------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9) Credit Shares delivered by book-entry transfer and not purchased to the Book-Entry Transfer Facility account. Account number ----------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificates for any Shares not tendered or not accepted for payment and/or the check for the purchase price of any Shares accepted for payment is to be sent to someone other than the undersigned or to the undersigned at an address other than that shown under "Description of the Shares Tendered." Mail check and/or stock certificates to: Mail check and/or stock certificates to: Name --------------------------------------------------------------------------- (PLEASE PRINT) Address ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) - -------------------------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9) 5 6 IMPORTANT STOCKHOLDER: SIGN HERE (COMPLETE SUBSTITUTE FORM W-9 BELOW) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Dated: - ------------------------ , 2000 (Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by the person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5). Name(s) - -------------------------------------------------------------------------------- (PLEASE PRINT) Name of Firm - -------------------------------------------------------------------------------- Capacity (full title) - -------------------------------------------------------------------------------- (SEE INSTRUCTION 5) Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (ZIP CODE) Area Code and Telephone Number - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security Number - -------------------------------------------------------------------------------- (SEE SUBSTITUTE FORM W-9) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW. Authorized signature(s) - -------------------------------------------------------------------------------- Name(s) - -------------------------------------------------------------------------------- Name of Firm - -------------------------------------------------------------------------------- (PLEASE PRINT) Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (ZIP CODE) Area Code and Telephone Number - -------------------------------------------------------------------------------- Dated: - ------------------------ , 2000 6 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Instruction, includes any participant in any of the Book-Entry Transfer Facility's systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Exchange Act (each, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by stockholders of the Company either if certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if delivery of the Shares is to be made by book-entry transfer pursuant to the procedures set forth herein and in Section 3 of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), together with any required signature guarantees or an Agent's Message (in connection with book-entry transfer of the Shares) and any other required documents, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date, or the expiration of any Subsequent Offering Period, and either (i) certificates for tendered Shares must be received by the Depositary at one of such addresses prior to the Expiration Date, or the expiration of any Subsequent Offering Period, or (ii) Shares must be delivered pursuant to the procedures for book-entry transfer set forth herein and in Section 3 of the Offer to Purchase and a Book-Entry Confirmation must be received by the Depositary prior to the Expiration Date, or the expiration of any Subsequent Offering Period, or (b) the tendering stockholder must comply with the guaranteed delivery procedures set forth herein and in Section 3 of the Offer to Purchase. Stockholders whose certificates for the Shares are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary before the Expiration Date, or who cannot comply with the book-entry transfer procedures on a timely basis, may tender their Shares by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth herein and in Section 3 of the Offer to Purchase. Pursuant to such guaranteed delivery procedures, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser, must be received by the Depositary before the Expiration Date, and (iii) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to all tendered Shares), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal), and any other required documents must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the Nasdaq Stock Market, Inc. is open for business. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant. The signatures on this Letter of Transmittal cover the Shares tendered hereby. THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE 7 8 SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. All tendering stockholders, by executing this Letter of Transmittal (or a manually signed facsimile thereof), waive any right to receive any notice of acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein under "Description of Shares Tendered" is inadequate, the number of Shares tendered and the certificate numbers with respect to such Shares should be listed on a separate signed schedule attached hereto. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In any such case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificates will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date, or the expiration of any Subsequent Offering Period, or the termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any stock certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of the authority of such person to so act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment or certificates for any Shares not tendered or not accepted for payment are to be issued in the name of a person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares evidenced by certificates listed and transmitted hereby, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the transfer and sale of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or if certificates for any Shares not tendered or not accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates evidencing the Shares tendered hereby. 8 9 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any Shares accepted for payment is to be issued in the name of, and/or certificates for any Shares not accepted for payment or not tendered are to be issued in the name of and/or returned to, a person other than the signer of this Letter of Transmittal or if a check is to be sent, and/or such certificates are to be returned, to a person other than the signer of this Letter of Transmittal, or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Any stockholder(s) delivering Shares by book-entry transfer may request that Shares not purchased be credited to such account maintained at the Book-Entry Transfer Facility as such stockholder(s) may designate in the box entitled "Special Payment Instructions." If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above as the account from which such Shares were delivered. 8. BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal income tax on payments of cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify, under penalties of perjury, that such TIN is correct. If a tendering stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification box on the Substitute Form W-9. Backup withholding is not an additional income tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. The stockholder is required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner of the Shares. If the Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future, such stockholder should write "Applied For" in the space provided for the TIN in Part 1 of the Substitute Form W-9 and sign and date the Substitute Form W-9, and the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such stockholder if a TIN is provided to the Depositary within 60 days. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the Information Agent or the Dealer Manager at the addresses and phone numbers set forth below, or to brokers, dealers, commercial banks or trust companies. 10. WAIVER OF CONDITIONS. Subject to the Offer to Purchase and the terms of the Merger Agreement, Purchaser reserves the absolute right in its sole discretion to waive, at any time or from time to time, any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered. 11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) representing Shares has been lost, destroyed or stolen, the stockholder should promptly contact Computershare Investor Services, which is the company's transfer agent, at 12039 West Almeda Parkway, Suite 72, Lakewood, Colorado 80228, attention Research Department, or by calling (303) 986-5400. THE STOCKHOLDER WILL THEN BE INSTRUCTED AS TO THE STEPS THAT MUST BE TAKEN IN ORDER TO 9 10 REPLACE THE CERTIFICATE(S). THIS LETTER OF TRANSMITTAL AND RELATED DOCUMENTS CANNOT BE PROCESSED UNTIL THE PROCEDURES FOR REPLACING LOST, DESTROYED OR STOLEN CERTIFICATES HAVE BEEN FOLLOWED. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE HEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY BEFORE THE EXPIRATION DATE OR THE EXPIRATION OF ANY SUBSEQUENT OFFERING PERIOD, AND EITHER CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE BEFORE THE EXPIRATION DATE OR THE EXPIRATION OF ANY SUBSEQUENT OFFERING PERIOD, OR THE TENDERING STOCKHOLDERS MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY. IMPORTANT TAX INFORMATION Under Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with such stockholder's correct taxpayer identification number on Substitute Form W-9 below. If such stockholder is an individual, the taxpayer identification number is his or her social security number. If the Depositary is not provided with the correct taxpayer identification number, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. Certain stockholders (including, among others, all corporations, and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that stockholder must submit a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Depositary. Exempt stockholders, other than foreign individuals, should furnish their TIN, write "Exempt" on the face of the Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct taxpayer identification number by completing the form contained herein certifying that the taxpayer identification number provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a taxpayer identification number). WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the social security number or employer identification number of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future, such stockholder should write "Applied For" in the space provided for the TIN in Part 1 of the Substitute Form W-9 and sign and date the Substitute Form W-9, and the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made before a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such stockholder if a TIN is provided to the Depositary within 60 days. 10 11 PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
Name ---------------------------------------------------------------------------- SUBSTITUTE Address FORM W-9 ---------------------------------------------------------------------------- (NUMBER AND STREET) ---------------------------------------------------------------------------- (ZIP CODE) (CITY) (STATE) ---------------------------------------------------------------------------- PART 1(a) -- PLEASE PROVIDE YOUR TIN TIN --------------------------------- IN THE BOX AT RIGHT AND CERTIFY BY ------------------------------------- SIGNING AND DATING BELOW TIN SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFICATION NUMBER ---------------------------------------------------------------------------- DEPARTMENT OF THE PART 1(b) -- PLEASE CHECK THE BOX AT RIGHT IF YOU HAVE APPLIED FOR, AND ARE TREASURY AWAITING RECEIPT OF YOUR TIN [ ] INTERNAL REVENUE SERVICE ---------------------------------------------------------------------------- PART 2 -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING PLEASE WRITE "EXEMPT" HERE (SEE INSTRUCTIONS) ---------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER PART 3 -- CERTIFICATION UNDER PENALTIES OF PERJURY, I CERTIFY THAT (X) The IDENTIFICATION NUMBER (TIN) number shown on this form is my correct TIN (or I am waiting for a number to AND CERTIFICATION be issued to me), and (Y) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Certification of Instructions -- You must cross out Item (Y) of Part 3 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such Item (Y). ---------------------------------------------------------------------------- SIGNATURE SIGN HERE [ARROW] ---------------------------------------------------------------------------- DATE ----------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 1(b) OF THE SUBSTITUTE FORM W-9 INDICATING YOU HAVE APPLIED FOR, AND ARE AWAITING RECEIPT OF, YOUR TIN. CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and that (1) I mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that, if I do not provide a taxpayer identification number to the Payer by the time of payment, 31 percent of all reportable payments made to me pursuant to this Offer will be withheld. - ------------------------------------------------------------ ------------------------------------------------- Signature Date
11 12 MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR THE SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE FIRST PAGE. Questions and requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below, and will be furnished promptly at Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: [CIC LOGO] CORPORATE INVESTOR COMMUNICATIONS, INC. 111 Commerce Road, Carlstadt, New Jersey 07072-2586 Banks and Brokers call collect (201) 896-1900 All others call Toll Free (888) 682-7239 The Dealer Manager for the Offer is: [GEORGESON SHAREHOLDER LOGO] EX-99.(A)(3) 4 w41645ex99-a3.txt NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) OF CERPROBE CORPORATION TO CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. (NOT TO BE USED FOR SIGNATURE GUARANTEES) THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) (i) if certificates for the Shares (as defined below) are not immediately available, (ii) if the procedure for book-entry transfer cannot be completed prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase described below), or (iii) if time will not permit all required documents to reach the Depositary prior to the Expiration Date. Such form may be delivered by hand, transmitted by facsimile transmission or mailed to the Depositary. See Section 3 of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: HARRIS TRUST COMPANY OF NEW YORK
BY MAIL: BY HAND/OVERNIGHT DELIVERY: Wall Street Station Receive Window P.O. Box 1023 Wall Street Plaza New York, NY 10268-1023 88 Pine Street, 19th Floor New York, NY 10005
BY FACSIMILE TRANSMISSIONS: (FOR ELIGIBLE INSTITUTIONS ONLY) (212) 701-7636 FOR INFORMATION (CALL COLLECT): (212) 701-7624 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 Ladies and Gentlemen: The undersigned hereby tenders to Cardinal Merger Sub., Inc., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc. ("Parent"), a Pennsylvania corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 25, 2000 and the related Letter of Transmittal (which, together with any amendments or supplements thereto, constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares set forth below of the common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares"), of Cerprobe Corporation, a Delaware corporation (the "Company"), pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Signature(s) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name(s) of Record Holder(s) - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPE Number of Shares - -------------------------------------------------------------------------------- Certificate No.(s) (If Available) - -------------------------------------------------------------------------------- Dated , 2000 - ------------ Address(es) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ZIP CODE Area Code and Tel. No.(s) - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security Number - -------------------------------------------------------------------------------- Check box if Shares will be tendered by book-entry transfer: [ ] Account Number - -------------------------------------------------------------------------------- 2 3 THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program, the Stock Exchange Medallion Program or an "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby (a) represents that the above named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents that such tender of Shares complies with Rule 14e-4 and (c) guarantees to deliver to the Depositary either certificates representing the Shares tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and any other required documents, within three trading days (as defined in the Offer to Purchase) after the date hereof. - -------------------------------------------------------------------------------- NAME OF FIRM - -------------------------------------------------------------------------------- ADDRESS - -------------------------------------------------------------------------------- ZIP CODE Area Code and Tel. No.: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- AUTHORIZED SIGNATURE Name: - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPE Title: - -------------------------------------------------------------------------------- Date: , 2000 - ------------------------ NOTE: DO NOT SEND CERTIFICATES FOR THE SHARES WITH THIS NOTICE. CERTIFICATES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL. 3 EX-99.(A)(4) 5 w41645ex99-a4.txt GUIDELINES OF CERTIFICATION OF TAXPAYOR ID. 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - ------------------------------------------------------------------- GIVE THE NAME AND SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF -- - ------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of the ac- account) count or, if combined funds, any one of the individuals(2) 3. Husband and wife (joint The actual owner of the ac- account) count or, if joint funds, either person(2) 4. Custodian account of a minor The minor(3) (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if the minor account) is only contributor, the minor(1) 6. Account in the name of The ward, minor, or incompe- guardian or committee for a tent person(4) designated ward, minor, or incompetent person 7. a. The usual revocable savings The grantor-trustee(1) trust account (grantor is also trustee) b. So-called trust account The actual owner(1) that is not a legal or valid trust under State law 8. Sole proprietorship account The owner(5) - ------------------------------------------------------------------- - ------------------------------------------------------------------- GIVE THE NAME AND EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF -- - ------------------------------------------------------------------- 9. A valid trust, estate, or Legal entity (Do not furnish pension trust the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(1) 10. Corporate account The organization 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in The partnership the name of the business 13. Association, club, or other The organization tax-exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - -------------------------------------------------------------------
(1) List first and circle the name of the legal trust, estate, or pension trust. If only one person on a joint account has a social security number, that person's number must be furnished. (2) List first and circle the name of the person whose number you furnish. (3) Circle the minor's name and furnish the minor's social security number. (4) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (5) Show the name of the owner. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Internal Revenue Service Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at your local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: -- A corporation. -- A financial institution. -- An organization exempt from tax under section 501(a), or an individual retirement plan. -- The United States or any agency or instrumentality thereof. -- A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. -- A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. -- An international organization, or any agency or instrumentality thereof. -- A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. -- A real estate investment trust. -- A common trust fund operated by a bank under section 584(a). -- An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). -- An entity registered at all times under the Investment Company Act of 1940. -- A foreign central bank of issue. -- A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: -- Payments to nonresident aliens subject to withholding under section 1441. -- Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. -- Payments of patronage dividends where the amount received is not paid in money. -- Payments made by certain foreign organizations. -- Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: -- Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. -- Payments of tax-exempt interest (including exempt-interest dividends under section 852). -- Payments described in section 6049(b)(5) to nonresident aliens. -- Payments on tax-free covenant bonds under section 1451. -- Payments made by certain foreign organizations. -- Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). Certain payments other than interest dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 20% on any portion of an under-payment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(5) 6 w41645ex99-a5.txt DEALER/BROKER LETTER 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) OF CERPROBE CORPORATION AT $20.00 NET PER SHARE BY CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. October 25, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies And Other Nominees: We have been appointed by Cardinal Merger Sub., Inc., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Parent"), to act as Dealer Manager in connection with Purchaser's offer to purchase all outstanding shares of common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares"), of Cerprobe Corporation, a Delaware corporation (the "Company"), at $20.00 per Share, net to the seller in cash, without interest (the "Common Stock Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 25, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN IMMEDIATELY PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES AND (II) THE APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR BEEN TERMINATED. THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE SECTIONS 1 AND 13 OF THE OFFER TO PURCHASE. The Board of Directors of the Company, by unanimous vote at a meeting held on October 11, 2000, determined that the terms of the Offer and the Merger (as defined in the Offer to Purchase) are fair to, and in the best interest of, the stockholders of the Company, approved the Offer, the Merger and the other transactions contemplated by the Merger Agreement (as defined in the Offer to Purchase) and approved the Merger Agreement. The Board of Directors of the Company recommends that the Company's stockholders accept the Offer and tender their Shares in the Offer. 2 For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. Offer to Purchase dated October 25, 2000; 2. Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients; 3. Notice of Guaranteed Delivery to be used to accept the Offer if certificates for the Shares and all other required documents cannot be delivered to Harris Trust Company of New York (the "Depositary"), or if the procedures for book-entry transfer cannot be completed, by the Expiration Date (as defined in the Offer to Purchase); 4. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 5. A letter to stockholders of the Company from C. Zane Close, the President and Chief Executive Officer of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 dated October 25, 2000, which has been filed by the Company with the Securities and Exchange Commission and which includes the recommendation of the Board of Directors of the Company that stockholders accept the Offer and tender their Shares to Purchaser pursuant to the Offer; 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. A return envelope addressed to the Depositary. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment and pay for any Shares which are validly tendered before the Expiration Date, and not theretofore properly withdrawn, when permitted, when, as and if Purchaser gives oral or written notice to the Depositary of Purchaser's acceptance of such Shares for payment pursuant to the Offer. If there is a Subsequent Offering Period, all Shares tendered during the Subsequent Offering Period will be immediately accepted for payment and paid for as they are tendered. Payment for any Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (i) certificates for the Shares, or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, pursuant to the procedures described in Section 3 of the Offer to Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or a properly completed and manually signed facsimile thereof) or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer and (iii) all other documents required by the Letter of Transmittal. Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Depositary, the Information Agent and the Dealer Manager as described in the Offer to Purchase) for soliciting tenders of the Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for customary mailing and handling costs incurred by them in forwarding the enclosed materials to their customers. Purchaser will pay or cause to be paid all stock transfer taxes applicable to its purchase of the Shares pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer of the Shares, and any other required documents, should be sent to the Depositary, and certificates representing the tendered Shares should be delivered or tendered by book-entry transfer, all in accordance with the Instructions set forth in the Letter of Transmittal and in the Offer to Purchase. 2 3 If holders of the Shares wish to tender, but it is impracticable for them to forward their certificates or other required documents or to complete the procedures for delivery by book-entry transfer prior to the expiration of the Offer, a tender may be effected by following the guaranteed delivery procedures specified in Section 3 of the Offer to Purchase. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at the addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Very truly yours, GEORGESON SHAREHOLDER SECURITIES CORPORATION NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF PURCHASER, MERGER SUB, THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT, THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(6) 7 w41645ex99-a6.txt CLIENT LETTER 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) OF CERPROBE CORPORATION AT $20.00 NET PER SHARE BY CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. October 25, 2000 To Our Clients: Enclosed for your consideration are the Offer to Purchase dated October 25, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") in connection with the offer by Cardinal Merger Sub., Inc., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Parent"), to purchase all outstanding shares of common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares") of Cerprobe Corporation, a Delaware corporation (the "Company"), at $20.00 per Share, net to the seller in cash, without interest (the "Common Stock Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF THE SHARES HELD FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase. Your attention is invited to the following: 1. The tender price is $20.00 per Share, net to you in cash without interest. 2. The Offer is being made for all outstanding Shares. 3. The Board of Directors of the Company, by unanimous vote at a meeting held on October 11, 2000, determined that the terms of the Offer and the Merger (as defined in the Offer to Purchase) are fair to, and in the best interest of, the stockholders of the Company, approved the Offer, the Merger and the other transactions contemplated by the Merger Agreement (as defined in the Offer to Purchase) and approved the Merger Agreement. The Board of Directors of the Company recommends that the Company's stockholders accept the Offer and tender their Shares in the Offer. 2 4. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000, UNLESS THE OFFER IS EXTENDED. 5. The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn immediately prior to the expiration of the Offer a number of Shares representing at least a majority of the outstanding Shares and (ii) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated. The Offer is also subject to the other conditions set forth in the Offer to Purchase. See Sections 1 and 13 of the Offer to Purchase. 6. Any stock transfer taxes applicable to the sale of the Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise provided in Instruction 6 of the Letter of Transmittal. The Offer is being made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of the Shares. Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares for payment pursuant thereto, Purchaser shall make a good faith effort to comply with such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of the Shares in such state. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of Purchaser by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdictions. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth on the reverse side of this letter. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the reverse side of this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. 2 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF CERPROBE CORPORATION (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK) BY CARDINAL MERGER SUB., INC. A WHOLLY OWNED SUBSIDIARY OF KULICKE AND SOFFA INDUSTRIES, INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated October 25, 2000 (the "Offer to Purchase") and the related Letter of Transmittal in connection with the Offer by Cardinal Merger Sub., Inc., a Delaware corporation and a wholly owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation, to purchase all outstanding shares of common stock, par value $0.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares"), of Cerprobe Corporation, a Delaware corporation, at $20.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). This will instruct you to tender the number of Shares indicated below (or if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares tendered:* - -------------------------------------------------------------------------------- Certificate Nos. (if available): - -------------------------------------------------------------------------------- Check the box if Shares will be tendered by book-entry transfer: [ ] Account No: - -------------------------------------------------------------------------------- Dated: ------------------------------------------------------------, 2000 SIGN HERE Signature(s): - -------------------------------------------------------------------------------- Please type or print address(es): - -------------------------------------------------------------------------------- Area Code and Telephone Number: - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security Number(s): - ------------------------------------------------------------------- - --------------- * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 3 EX-99.(A)(7) 8 w41645ex99-a7.txt SUMMARY OF NEWSPAPER ADVERTISEMENT 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made only by the Offer to Purchase, dated October 25, 2000, and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of Shares. The Purchaser (as defined below) is not aware of any jurisdiction where the making of the Offer is prohibited by administrative or judicial action under any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All of the Outstanding Shares of Common Stock (including the Associated Rights to Purchase Series A Junior Participating Preferred Stock) of Cerprobe Corporation at $20.00 Net Per Share by Cardinal Merger Sub., Inc. a wholly owned subsidiary of Kulicke and Soffa Industries, Inc. Cardinal Merger Sub., Inc., a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Parent"), is offering to purchase all of the outstanding shares of common stock, par value $.05 per share (the "Common Stock"), together with the associated rights to purchase Series A Junior Participating Preferred Stock (the "Rights" and collectively with the Common Stock, the "Shares") of Cerprobe Corporation, a Delaware corporation (the "Company"), at a price of $20.00 per Share net to the seller in cash (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 25, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Tendering stockholders who are the record holder of their Shares and tender directly to Harris Trust Company of New York (the "Depositary") will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of the Shares purchased under the Offer. Stockholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Following the Offer, the Purchaser intends to effect the Merger described below. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 21, 2000 UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES, AND (II) THE APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 13 OF THE OFFER TO PURCHASE. The Offer is being made under an Agreement and Plan of Merger, dated as of October 11, 2000 (the "Merger Agreement"), among the Purchaser, Parent and the Company. Pursuant to the Merger Agreement, as soon as practicable after the purchase of Shares in the Offer and the satisfaction or waiver (subject to applicable law) of the conditions set forth in the Merger Agreement, the Purchaser will be merged with and into the Company (the "Merger") in accordance with the applicable provisions of the Delaware General Corporation Law (the "DGCL"). At the effective time of the Merger, each issued and outstanding Share (other than Shares held by Parent or any subsidiary of Parent or held in treasury by the Company or any subsidiary of the Company and Shares held by stockholders who have demanded and perfected appraisal rights under the DGCL) will be converted into and represent the right to receive an amount equal to the Offer Price or any higher price which may be paid for the Shares under the Offer, without interest. If the Purchaser acquires 90% or more of the outstanding Shares in the Offer, the Purchaser will effect the Merger as a "short-form" merger under the DGCL, without a vote of the stockholders of the Company. See "Purpose Of The Offer; Plans For The Company; The Merger--The Merger Agreement," in the Offer to Purchase. Parent has also entered into Affiliate Tender Agreements, each dated as of October 11, 2000 (collectively, the "Affiliate Tender Agreements"), with certain stockholders of the Company. Under the terms of the Affiliate Tender Agreements, those stockholders have, among other things, agreed to tender their Shares into the Offer (which Shares currently represent in the aggregate approximately 9.8% of the outstanding Shares, excluding Shares issuable upon exercise of outstanding options). Parent and the Company have also entered into a Stock Option Agreement, dated as of October 11, 2000, under which the Company has granted Parent an irrevocable option, exercisable in certain circumstances following termination of the Merger Agreement, to purchase from the Company upon original issue from time to time up to a number of Shares equal to 19.9% of the number of Shares outstanding on October 11, 2000, subject to adjustment, at an initial exercise price of $20.00 per Share. See "Purpose Of The Offer; Plans For The Company; The Merger--The Affiliate Tender Agreements" and "--The Stock Option Agreement" in the Offer to Purchase. The Board of Directors of the Company has, by unanimous vote, (A) determined that the terms of the Offer and the Merger are fair to, and in the best interest of, the stockholders of the Company, (B) approved the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, and (C) recommended that the Company's stockholders accept the Offer and tender their Shares in the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary, as agent for tendering stockholders, of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting such payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE, REGARDLESS OF ANY EXTENSIONS OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof) properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) and (iii) any other documents required by the Letter of Transmittal. Any stockholder who desires to tender Shares and whose certificates evidencing such Shares are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, or who cannot deliver the certificates and all required documents to the Depositary prior to the expiration of the Offer, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3 in the Offer to Purchase. Shares tendered into the Offer may be withdrawn at any time prior to the expiration of the Offer and, unless theretofore accepted for payment under to the Offer, may also be withdrawn at any time after December 24, 2000. The term "Expiration Date" means 12:00 midnight, New York City time, on Tuesday, November 21, 2000, unless the Purchaser, in its sole discretion (subject to the terms of the Merger Agreement), shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as so extended by the Purchaser, shall expire. Subject to the terms of the Merger Agreement and applicable rules and regulations of the Securities and Exchange Commission, the Purchaser expressly reserves the right, in its sole discretion, at any time or from time to time, to (a) extend the period of time during which the Offer is open and thereby delay acceptance for payment of and the payment for any Shares, by giving oral or written notice of such extension to the Depositary and (b) amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. Any extension, delay, waiver, amendment or termination of the Offer will be followed as promptly as practicable by public announcement, which in the case of an extension will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn as described above and in the Offer to Purchase. For a withdrawal of Shares to be effective, a written, telegraphic, telex, or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered under the procedures for book-entry tender as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. If certificates for the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares to be withdrawn must also be furnished to the Depositary as aforesaid before the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notices of withdrawal will be determined by the Purchaser in its sole discretion, which determination will be final and binding. Sales of the Shares under the Offer will be taxable transactions for Federal income tax purposes and may also be taxable under applicable state, local and other tax laws. For Federal income tax purposes, a stockholder whose Shares are purchased under the Offer or who receives cash as a result of the Merger will realize gain or loss equal to the difference between the adjusted basis of the Shares sold or exchanged and the amount of cash received therefor. Such gain or loss will be capital gain or loss if the Shares were held as capital assets by the stockholder and will be long-term if the Shares have been held for more than 12 months. Long-term capital gain of a non-corporate stockholder is generally subject to a maximum federal income tax rate of 20%. All stockholders should consult their own tax advisors with respect to the specific tax consequences to them of the Offer and the Merger, including the application and effect of Federal, state, local, foreign, and other tax laws. For a more complete description of certain U.S. Federal income tax consequences of the Offer and the Merger, see Section 5 of the Offer to Purchase. Under the Merger Agreement and pursuant to Rule 14d-11 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Purchaser may, subject to certain conditions, include a subsequent offering period following the Expiration Date. The Purchaser does not currently intend to include a subsequent offering period in the Offer, although it reserves the right to do so in its sole discretion. In the event the Purchaser provides a subsequent offering period, withdrawal rights will not apply to Shares tendered during such subsequent offering period and withdrawal rights will not apply during such subsequent offering period with respect to Shares tendered in the Offer and accepted for payment. See Section 1 of the Offer to Purchase. The information required to be disclosed by Paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided to the Purchaser its list of stockholders and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other related materials are being mailed to record holders of Shares and will be mailed to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (WHICH INCLUDES THE RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS AND THE REASONS THEREFOR) CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below. Requests for additional copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be directed to the Information Agent and will be furnished promptly at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent) for soliciting tenders of Shares pursuant to the Offer. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The Information Agent for the Offer is: [CORPORATE INVESTOR LOGO] Corporate Investor Communications, Inc. 111 Commerce Road - Carlstadt, New Jersey 07072-2586 Banks and Brokers call collect (201) 896-1900 All others call Toll Free (888) 682-7239 The Dealer Manager for the Offer is: [GEORGESON LOGO] Georgeson Shareholder Securities Corporation 17 State Street, 10th Floor New York, NY 10004 (212) 440-9800 (call collect) or Call toll free (800) 445-1790 October 25, 2000 EX-99.(A)(8) 9 w41645ex99-a8.txt PRESS RELEASE 1 Exhibit (a)(8) NEWS For Immediate Release Company Contact: Nancy R. Kyle 215-784-6436 nkyle@kns.com Kulicke and Soffa Commences Tender Offer for All Outstanding Shares of Cerprobe Willow Grove, PA October 25, 2000 - Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC), the world's largest supplier of semiconductor assembly equipment, announced today the commencement of a tender offer to acquire all of the outstanding shares of common stock of Cerprobe Corporation (NASDAQ: CRPB) for $20.00 per share in cash. Cerprobe is a leader in the design and manufacture of semiconductor test interconnect solutions. The tender offer is being made pursuant to the definitive Agreement and Plan of Merger by and among Kulicke and Soffa, Cardinal Merger Sub., Inc., a wholly owned subsidiary of Kulicke and Soffa, and Cerprobe, which was announced on October 12, 2000. The offer will expire on Tuesday, November 21, 2000, unless extended in accordance with the Merger Agreement. The consummation of the tender offer is subject to customary closing conditions, including that a majority of the outstanding Cerprobe shares are tendered and the expiration or termination of the Hart-Scott-Rodino waiting period. THIS ANNOUNCEMENT IS NOT AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES. KULICKE AND SOFFA HAS FILED A TENDER OFFER STATEMENT WITH THE SEC AND CERPROBE HAS FILED A SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER. INVESTORS AND SECURITY HOLDERS OF BOTH KULICKE AND SOFFA AND CERPROBE ARE URGED TO READ EACH OF THE TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT REFERENCED IN THIS PRESS RELEASE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT AND OTHER DOCUMENTS FILED BY KULICKE AND SOFFA AND CERPROBE WITH THE SEC AT THE SEC'S WEB SITE AT WWW.SEC.GOV. THE TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT AND THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FREE FROM KULICKE AND SOFFA OR CERPROBE OR BY CONTACTING CORPORATE INVESTOR COMMUNICATIONS, INC., THE INFORMATION AGENT, AT (888) 682-7239. Cerprobe is a recognized world leader in the design and manufacture of semiconductor test interconnect solutions. Cerprobe offers products and integrated 1 2 systems for wafer and IC package testing. Cerprobe markets and distributes its products and systems worldwide, and operates domestic manufacturing facilities in Arizona, California, and Texas and international manufacturing facilities in France, Scotland, Taiwan, and Singapore. Kulicke and Soffa is the world's largest supplier of semiconductor assembly equipment. The company provides scaleable solutions for the assembly of chip and wire, flip chip and chip scale packages. Chip and wire solutions combine wire bonding, die bonding and wafer dicing equipment with wire, capillaries, die collets and saw blades. Flip chip solutions include die placement equipment, flip chip bumping technology and thin film laminates. Kulicke and Soffa also offers unique CSP packaging technology as well as factory integration products and services. It has sales, service and applications development facilities worldwide. CAUTION CONCERNING FORWARD LOOKING STATEMENTS THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE FOUND IN VARIOUS PLACES THROUGHOUT THIS PRESS RELEASE AND INCLUDE, WITHOUT LIMITATION, STATEMENTS CONCERNING THE FINANCIAL CONDITIONS, RESULTS OF OPERATIONS AND BUSINESSES OF CERPROBE AND KULICKE AND SOFFA AND, ASSUMING THE CONSUMMATION OF THE ACQUISITION, THE CONSOLIDATION OF CERPROBE INTO KULICKE AND SOFFA, AS WELL AS THE EXPECTED TIMING AND BENEFITS OF THE ACQUISITION. WHILE THESE FORWARD-LOOKING STATEMENTS REPRESENT OUR JUDGMENTS AND FUTURE EXPECTATIONS CONCERNING THE DEVELOPMENT OF OUR BUSINESS AND THE TIMING AND BENEFITS OF THE ACQUISITION, A NUMBER OF RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS COULD CAUSE ACTUAL DEVELOPMENTS AND RESULTS TO DIFFER MATERIALLY FROM OUR EXPECTATIONS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THOSE LISTED OR DISCUSSED IN CERPROBE'S 1999 ANNUAL REPORT ON FORM 10-K405 AND KULICKE AND SOFFA'S 1999 ANNUAL REPORT ON FORM 10-K; BUSINESS AND ECONOMIC CONDITIONS IN OUR INDUSTRY AND IN CERPROBE'S INDUSTRY; THE RISK THAT THE CERPROBE BUSINESS WILL NOT BE SUCCESSFULLY INTEGRATED INTO KULICKE AND SOFFA; THE COSTS RELATED TO THE TRANSACTION; THE INABILITY TO OBTAIN OR MEET CONDITIONS IMPOSED FOR GOVERNMENTAL APPROVALS FOR THE TRANSACTION; THE RISK THAT ANTICIPATED SYNERGIES WILL NOT BE OBTAINED OR NOT OBTAINED WITHIN THE TIME ANTICIPATED; THE RISK THAT WE WILL NOT BE SUCCESSFUL IN MAKING TECHNOLOGICAL ADVANCES AND OTHER KEY FACTORS THAT WE HAVE INDICATED COULD ADVERSELY AFFECT OUR BUSINESSES AND FINANCIAL PERFORMANCE CONTAINED IN OUR PAST AND FUTURE FILINGS AND REPORTS, INCLUDING THOSE WITH THE SEC. MORE DETAILED INFORMATION ABOUT THOSE FACTORS IS SET FORTH IN FILINGS MADE BY CERPROBE AND KULICKE 2 3 AND SOFFA WITH THE SEC. NEITHER CERPROBE NOR KULICKE AND SOFFA IS UNDER ANY OBLIGATION TO (AND EXPRESSLY DISCLAIMS ANY SUCH OBLIGATIONS TO) UPDATE OR ALTER ITS FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. # # # 3 EX-99.(D)(1) 10 w41645ex99-d1.txt AGREEMENT & PLAN OF MERGER 1 Exhibit (d)(1) EXECUTION COPY AGREEMENT AND PLAN OF MERGER BY AND AMONG KULICKE AND SOFFA INDUSTRIES, INC. CARDINAL MERGER SUB., INC. AND CERPROBE CORPORATION OCTOBER 11, 2000 2 TABLE OF CONTENTS -----------------
Page ---- ARTICLE I THE OFFER............................................................................... 2 SECTION 1.1 The Offer...................................................................... 2 SECTION 1.2 Company Actions................................................................ 4 SECTION 1.3 Stockholder Lists.............................................................. 4 SECTION 1.4 Directors; Section 14(f)....................................................... 5 ARTICLE II THE MERGER.............................................................................. 6 SECTION 2.1 The Merger..................................................................... 6 SECTION 2.2 Effective Time of the Merger................................................... 6 SECTION 2.3 Effects of the Merger.......................................................... 7 SECTION 2.4 Closing........................................................................ 7 SECTION 2.5 Certificate of Incorporation................................................... 7 SECTION 2.6 Bylaws......................................................................... 7 SECTION 2.7 Directors and Officers......................................................... 7 ARTICLE III CONVERSION OF SHARES.................................................................... 8 SECTION 3.1 Conversion of Company Shares in the Merger..................................... 8 SECTION 3.2 Conversion of Subsidiary Shares................................................ 8 SECTION 3.3 Funding of Payments............................................................ 8 SECTION 3.4 Closing of Company's Transfer Books............................................ 9 SECTION 3.5 Dissenting Shares.............................................................. 10 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY............................................... 10 SECTION 4.1 Organization and Qualification; Subsidiaries................................... 10 SECTION 4.2 Charter and Bylaws............................................................. 11 SECTION 4.3 Company Capitalization......................................................... 12 SECTION 4.4 Subsidiary Capitalization...................................................... 13 SECTION 4.5 Authority...................................................................... 13 SECTION 4.6 No Conflict; Required Filings and Consents..................................... 14 SECTION 4.7 Permits; Compliance............................................................ 15 SECTION 4.8 Reports; Financial Statements.................................................. 15 SECTION 4.9 Undisclosed Liabilities........................................................ 15 SECTION 4.10 Absence of Certain Changes or Events........................................... 16 SECTION 4.11 Litigation..................................................................... 16 SECTION 4.12 Customers...................................................................... 16 SECTION 4.13 Major Contracts................................................................ 16 SECTION 4.14 Employee Benefit Plans; Labor Matters.......................................... 18 SECTION 4.15 Taxes.......................................................................... 21 SECTION 4.16 Intellectual Property.......................................................... 21 SECTION 4.17 Transactions with Affiliates................................................... 23 SECTION 4.18 Certain Business Practices..................................................... 23 SECTION 4.19 Opinion of Financial Advisor................................................... 23 SECTION 4.20 Vote Required.................................................................. 23 SECTION 4.21 Brokers........................................................................ 24
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Page ---- SECTION 4.22 Company Rights Agreement....................................................... 24 SECTION 4.23 Insurance...................................................................... 24 SECTION 4.24 Properties..................................................................... 24 SECTION 4.25 Environmental Matters.......................................................... 25 SECTION 4.26 Offer Documents; Schedule 14D-9................................................ 26 SECTION 4.27 Full Disclosure................................................................ 26 ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUIROR COMPANIES.................................... 27 SECTION 5.1 Organization and Qualification................................................. 27 SECTION 5.2 Charter and Bylaws............................................................. 27 SECTION 5.3 Authority...................................................................... 27 SECTION 5.4 No Conflict; Required Filings and Consents..................................... 28 SECTION 5.5 SEC Reports; Financial Statements.............................................. 29 SECTION 5.6 Brokers........................................................................ 29 SECTION 5.7 Merger Sub..................................................................... 29 SECTION 5.8 Offer Documents; Schedule 14D-9................................................ 29 ARTICLE VI COVENANTS............................................................................... 30 SECTION 6.1 Affirmative Covenants of Company............................................... 30 SECTION 6.2 Negative Covenants of Company.................................................. 31 SECTION 6.3 Affirmative Covenants of Acquiror.............................................. 34 SECTION 6.4 Negative Covenants of Acquiror................................................. 34 SECTION 6.5 Access and Information......................................................... 35 ARTICLE VII ADDITIONAL AGREEMENTS................................................................... 36 SECTION 7.1 Meeting of Stockholders........................................................ 36 SECTION 7.2 Proxy Statement................................................................ 37 SECTION 7.3 Appropriate Action; Consents; Filings.......................................... 37 SECTION 7.4 Public Announcements........................................................... 38 SECTION 7.5 NASDAQ Listing................................................................. 39 SECTION 7.6 State Takeover Statutes........................................................ 39 SECTION 7.7 Merger Sub..................................................................... 39 SECTION 7.8 Indemnification and Insurance.................................................. 39 SECTION 7.9 Treatment of Stock Options; Employee Matters................................... 40 SECTION 7.10 No Solicitation................................................................ 42 ARTICLE VIII CLOSING CONDITIONS...................................................................... 44 SECTION 8.1 Conditions to Obligations of Each Party Under This Agreement................... 44 ARTICLE IX TERMINATION, AMENDMENT AND WAIVER....................................................... 45 SECTION 9.1 Termination.................................................................... 45 SECTION 9.2 Effect of Termination.......................................................... 46
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Page ---- SECTION 9.3 Amendment...................................................................... 47 SECTION 9.4 Waiver......................................................................... 47 SECTION 9.5 Fees, Expenses and Other Payments.............................................. 47 ARTICLE X GENERAL PROVISIONS...................................................................... 48 SECTION 10.1 Effectiveness of Representations, Warranties and Agreements.................... 48 SECTION 10.2 Notices........................................................................ 49 SECTION 10.3 Certain Definitions............................................................ 50 SECTION 10.4 Headings....................................................................... 51 SECTION 10.5 Severability................................................................... 51 SECTION 10.6 Entire Agreement............................................................... 51 SECTION 10.7 Assignment..................................................................... 51 SECTION 10.8 Parties in Interest............................................................ 52 SECTION 10.9 Failure or Indulgence Not Waiver; Remedies Cumulative.......................... 52 SECTION 10.10 Governing Law.................................................................. 52 SECTION 10.11 Counterparts................................................................... 52 SECTION 10.12 Specific Performance........................................................... 52 SECTION 10.13 Interpretation................................................................. 52 ANNEX A TO AGREEMENT AND PLAN OF MERGER.............................................................. 1
Exhibits -------- Exhibit A - Stock Option Agreement Exhibit B - Form of Surviving Corporation Certificate of Incorporation Exhibit C - Form of Surviving Corporation Bylaws
-iii- 5 AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER, dated as of October 11, 2000 (this "Agreement"), is by and among KULICKE AND SOFFA INDUSTRIES, INC., a Pennsylvania corporation ("Acquiror"), CARDINAL MERGER SUB., INC., a Delaware corporation and wholly owned subsidiary of Acquiror ("Merger Sub"), and CERPROBE CORPORATION, a Delaware corporation ("Company"). Acquiror and Merger Sub are sometimes collectively referred to herein as the "Acquiror Companies." WHEREAS, the Boards of Directors of Acquiror, Merger Sub and Company have approved the acquisition of Company by Acquiror upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, in furtherance of such acquisition, Acquiror, Merger Sub and Company have agreed that, upon the terms and subject to the conditions set forth in this Agreement, Merger Sub shall commence an offer (as amended or supplemented in accordance with this Agreement) to purchase for cash all of the issued and outstanding shares of common stock, par value $.05 per share, of Company (the "Company Common Stock," which term as used herein shall include the associated Rights (as defined in Section 4.3(a) hereof), and such offer to purchase all of the issued and outstanding shares of Company Common Stock shall be referred to herein as the "Offer") at a price per share of $20.00, net to the seller in cash, (such price, or such higher price as may be paid in the Offer, the "Common Stock Price"); WHEREAS, the Boards of Directors of Acquiror, Merger Sub and Company have each approved the merger of Merger Sub with and into Company (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement, whereby each of the shares of Company Common Stock, other than the outstanding shares of Company Common Stock owned directly or indirectly by Acquiror, Merger Sub or Company and Dissenting Shares (as defined in Section 3.5(b) hereof), will be converted into the right to receive the Common Stock Price; WHEREAS, the Board of Directors of Company has resolved to recommend that the holders of shares of Company Common Stock tender their shares pursuant to the Offer and approve and adopt this Agreement and the Merger upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, Acquiror, Merger Sub and Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger; WHEREAS, Acquiror and Company, in connection with this Agreement and prior to or contemporaneously with the execution of this Agreement, have entered into a Stock Option Agreement in the form of Exhibit A hereto (the "Stock Option Agreement"); and WHEREAS, simultaneously with the execution and delivery of this Agreement and in order to induce Acquiror and Merger Sub to enter into this Agreement, certain stockholders of Company (the "Certain Stockholders") have executed and delivered to Acquiror and Merger Sub 6 an agreement (the "Affiliate Tender Agreement") pursuant to which the Certain Stockholders have agreed to take specified actions in furtherance of the transactions contemplated by this Agreement, including tendering their shares of Company Common Stock into the Offer. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I THE OFFER SECTION 1.1 The Offer. (a) Subject to the provisions of this Agreement, and provided that this Agreement shall not have been terminated in accordance with Section 9.1 and subject to the satisfaction or waiver of each of the conditions to the Offer set forth in Annex A to this Agreement (the "Offer Conditions"), not later than the tenth (10th) business day from the date of public announcement (counting the business day on which such announcement is made) of the execution of this Agreement (which date of announcement shall be no later than the first business day after the execution of this Agreement), Acquiror shall cause Merger Sub to commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), the Offer at a price equal to the Common Stock Price for each and every share of Company Common Stock. The obligation of Merger Sub to consummate the Offer, to accept for payment and to pay for any shares of Company Common Stock tendered pursuant to the Offer shall be subject solely to the satisfaction or waiver of the Offer Conditions. It is agreed that the Offer Conditions are for the benefit of Merger Sub and may be asserted by Merger Sub regardless of the circumstances giving rise to any such condition and Merger Sub expressly reserves the right, in its sole discretion, to waive any such condition; provided that, without the prior written consent of Company, Merger Sub shall not waive the Minimum Condition (as defined in Annex A) or the condition set forth in paragraph (f) of Annex A. The initial time and expiration date of the Offer shall be 12:00 midnight Eastern Standard Time on the date that is the 20th business day following the commencement of the Offer (determined using Rule 14d-2 under the Exchange Act) (the "Scheduled Expiration Date" and any date to which the Offer is extended as permitted by Section 1.1(b) shall be referred to herein as the "Extended Expiration Date"). (b) Merger Sub expressly reserves the right, in its sole discretion, to modify and make changes to the terms and conditions of the Offer, provided, that without the prior written consent of Company (which consent will not be valid unless authorized by the Board of Directors of Company), no modification or change may be made which (i) decreases the consideration payable in the Offer (except as permitted by this Agreement), (ii) changes the form of consideration payable in the Offer (other than by adding consideration), (iii) changes the Minimum Condition, (iv) decreases the maximum number of shares of Company Common Stock sought pursuant to the Offer, (v) changes the material conditions to the Offer in a manner -2- 7 adverse to Company or its stockholders or option holders, or (vi) imposes any additional conditions to the Offer, and (vii) except as provided herein, extends the Offer if on the Scheduled Expiration Date all of the Offer Conditions have been satisfied or waived. Notwithstanding the foregoing, Merger Sub may (but shall not be required under this Agreement or otherwise to), without the consent of Company, (i) extend the Offer on one or more occasions for such period as may be determined by Merger Sub in its sole discretion (each such extension period not to exceed 5 business days at a time for an aggregate period (including any extensions pursuant to the following clauses (A) and (B)) of 10 business days), if on the Scheduled Expiration Date (A) any of the Offer Conditions shall not be satisfied or waived, or (B) the Minimum Condition has been satisfied but less than 90% of the shares of Company Common Stock have been validly tendered and not properly withdrawn, provided that in the event Acquiror elects to extend the Offer under clause (B), then all Offer Conditions (other than those set forth in clauses (b) and (c) of Annex A) shall be deemed to be irrevocably waived as of the commencement of such extension, or (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer. Subject to the foregoing, on the terms and subject to the satisfaction or waiver of the Offer Conditions, Merger Sub shall be obligated on the earliest date that all of the Offer Conditions are first satisfied or waived, accept for payment and pay for, and Acquiror shall cause Merger Sub to accept for payment and pay for, all shares of Company Common Stock validly tendered and not withdrawn pursuant to the Offer. Notwithstanding the foregoing, Merger Sub may in its sole discretion elect to provide for a subsequent offering period pursuant to, and on the terms required by, Rule 14d-11 under the Exchange Act. (c) On the date of commencement of the Offer, Acquiror and Merger Sub shall file with the SEC with respect to the Offer a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto and including the exhibits thereto, the "Schedule TO") with respect to the Offer which will comply in all material respects with the provisions of applicable federal securities laws, and will contain the offer to purchase relating to the Offer and forms of related letters of transmittal and summary advertisement (such Schedule TO and the documents included therein pursuant to which the Offer shall be made, together with any supplements or amendments thereto and including the exhibits thereto, are referred to herein collectively as the "Offer Documents"). Acquiror shall deliver copies of the proposed forms of the Offer Documents to Company at least 48 hours prior to filing such documents with the SEC for review and comment by Company and its counsel. Company and its counsel shall be given not less than 48 hours to review any amendments and supplements to the Offer Documents prior to their filing with the SEC or dissemination to Company's stockholders. Acquiror shall provide Company and its counsel in writing any comments that Merger Sub, Acquiror or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly and in any event not later than 24 hours after the receipt thereof. Each of Company, Acquiror and Merger Sub shall promptly correct any information provided by it for use in the Offer Documents that shall have become false or misleading in any material respect and Acquiror and Merger Sub further agree to take all steps necessary to cause the Schedule TO as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to the stockholders of Company, in each case, as and to the extent required by applicable federal securities laws. -3- 8 SECTION 1.2 Company Actions (a) Company hereby consents to the Offer and represents and warrants that (i) its Board of Directors, at a meeting duly called and held on October 11, 2000, has unanimously duly adopted resolutions approving the Offer, the Merger, this Agreement, the Stock Option Agreement, the Affiliate Tender Agreement, and the other transactions contemplated hereby and thereby, determining that the terms of the Offer and the Merger are fair to, and in the best interests of, Company's stockholders and recommending acceptance of the Offer and approval of the Merger and this Agreement by the stockholders of Company, and (ii) to the extent necessary, Company has taken all necessary action to exempt the Offer, the Merger and the Affiliate Tender Agreement under or make the Offer, the Merger and the Affiliate Tender Agreement not subject to (A) Section 203 of the Delaware General Corporation Law (the "DGCL") and (B) any other state takeover or other law in any jurisdiction where Company is, or is required to be, qualified to do business that purports to limit or restrict business combination, the ability to acquire or vote shares or the transactions contemplated by this Agreement. Subject to Section 7.10(b), Company hereby consents to the inclusion in the Offer Documents of the Offer Recommendation (as defined in Section 1.2(b)). Company has been advised that all of its directors and executive officers (as determined in accordance with Section 6.2(a)(i)) intend to tender their shares of Company Common Stock pursuant to the Offer. (b) Company shall file with the SEC on the date of the commencement of the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto and including the exhibits thereto, the "Schedule 14D-9") which shall comply in all material respects with the provisions of applicable federal securities laws, and, subject to Section 7.10(b), shall contain the recommendations of the Board in favor of the Offer and the Merger (the recommendation of the Board of Directors of Company in favor of the Offer and the Merger being referred to as the "Offer Recommendation"), and shall cooperate with Acquiror and Merger Sub in mailing or otherwise disseminating the Schedule 14D-9 to Company's stockholders. Company shall deliver copies of the proposed forms of the Schedule 14D-9 to Acquiror at least 48 hours prior to the filing of such documents with the SEC for review and comment by Acquiror and its counsel. Acquiror and its counsel shall be given not less than 48 hours to review any amendments and supplements to the Schedule 14D-9 prior to their filing with the SEC or dissemination to Company's stockholders. Company shall provide Acquiror and its counsel in writing any comments that Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly and in any event not later than 24 hours after the receipt thereof. Each of Company, Acquiror and Merger Sub shall promptly correct any information provided by it for use in the Schedule 14D-9 that shall have become false or misleading in any material respect and Company further agrees to take all steps necessary to cause such Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to Company's stockholders, as and to the extent required by applicable federal securities laws. SECTION 1.3 Stockholder Lists. In connection with the Offer, Company shall promptly furnish to, or cause to be furnished to, Acquiror and Merger Sub mailing labels, security position listings, any non-objecting beneficial owner lists and any available listing or computer file containing the names and addresses of the record holders of the shares of Company -4- 9 Common Stock as of a recent date and of those persons becoming record holders subsequent to such date (to the extent available), together with all other relevant, material information in Company's possession or control regarding the beneficial owners of shares of Company Common Stock and shall furnish Acquiror and Merger Sub with such information and assistance as Acquiror, Merger Sub or their respective agents may reasonably request in communicating the Offer to the record and beneficial holders of shares of Company Common Stock. Subject to the requirements of applicable Law (as defined in Section 4.6(a)), and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer and the Merger, Acquiror and Merger Sub shall, and shall cause each of their affiliates to, hold the information contained in any of such labels, lists, computer files and other information in confidence, use such information only in connection with the Offer and the Merger, and, if this Agreement is terminated, deliver to Company all copies of such information or extracts therefrom then in their possession or under their control. SECTION 1.4 Directors; Section 14(f). (a) Immediately upon the acceptance for payment of and payment for shares of Company Common Stock by Merger Sub or any of its affiliates pursuant to the Offer, Merger Sub shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of Company as will give Merger Sub, subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board of Directors of Company equal to the product of (i) the total number of directors on the Board of Directors of Company (giving effect to any increase in the size of such Board pursuant to this Section 1.4) and (ii) the percentage that the number of shares of Company Common Stock, beneficially owned by Merger Sub and its affiliates (including shares of Company Common Stock so accepted for payment and purchased) bears to the number of shares of Company Common Stock then outstanding; provided that, so long as the total number of directors on the Board of Directors of Company does not exceed nine (9), the number of directors designated by Merger Sub on the Board of Directors of Company shall not exceed seven (7). In furtherance thereof, concurrently with such acceptance for payment and payment for such shares of Company Common Stock Company shall, upon request of Acquiror or Merger Sub and in compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, use its reasonable best efforts promptly either to increase the size of its Board of Directors or to secure the resignations of such number of its incumbent directors, or both, as is necessary to enable such designees of Merger Sub to be so elected or appointed to Company's Board of Directors, and, subject to applicable law, Company shall take all reasonable actions available to Company to cause such designees of Merger Sub to be so elected or appointed. At such time, Company shall, if requested by Acquiror or Merger Sub and subject to applicable law, also take all reasonable action necessary to cause persons designated by Merger Sub to constitute at least the same percentage (rounded up to the next whole number) as is on Company's Board of Directors of (i) each committee of Company's Board of Directors, (ii) each board of directors (or similar body) of each subsidiary of Company and (iii) each committee (or similar body) of each such board. (b) Notwithstanding the foregoing, after the time that Merger Sub's designees are elected to the Board of Directors of Company, such Board of Directors shall have, -5- 10 at all times prior to the Effective Time (as defined in Section 2.2 hereof), at least two directors who are directors on the date of this Agreement and who are not officers or affiliates of Company, Acquiror or any of their affiliates (it being understood that for purposes of this sentence, a director (including, without limitation, the Chairman of the Board of Directors) of Company shall not be deemed an affiliate of Company solely as a result of his status as a director of Company) (the "Current Directors"); and provided further, that, (i) if the number of Current Directors serving on the Board of Directors of Company shall be reduced below two for any reason whatsoever (including, without limitation, by a director's refusing or failing to serve), the remaining Current Director serving on the Board of Directors may designate another Current Director to fill such vacancy, (ii) if no Current Directors then remain on the Board of Directors of Company, the other directors shall designate two other Current Directors to fill such vacancies, and (iii) if notwithstanding the foregoing, no Current Directors are on the Board of Directors of Company, the other directors may designate two other persons to fill such vacancies who shall not be officers or affiliates of Company, Acquiror or any of their respective affiliates (each an "Independent Director"). Subject to applicable Law, Company shall promptly take all action reasonably requested by Acquiror necessary to effect any such election, including furnishing the information required by Section 14(f) of the Exchange Act and Rule 14(f)-1 promulgated thereunder to Acquiror for inclusion in the Offer Documents initially filed with the SEC and distributed to the stockholders of Company. (c) Prior to the Effective Time and from and after the time that Merger Sub's designees constitute a majority of Company's Board of Directors, if applicable, any amendment or any termination of this Agreement by Company, any extension of time for performance of any of the obligations of Acquiror or Merger Sub hereunder, and any waiver of any condition or of any of Company's rights hereunder may be effected only with the affirmative vote of a majority of the Current Directors and Independent Directors; provided, that, if there shall be no Current Directors or Independent Directors, such actions may be effected by majority vote of the entire Board of Directors of Company. ARTICLE II THE MERGER SECTION 2.1 The Merger. Upon the terms and subject to the conditions of this Agreement, at the Effective Time in accordance with the DGCL, Merger Sub shall be merged with and into Company and the separate existence of Merger Sub shall thereupon cease. Company shall continue its existence under the laws of the State of Delaware and, in its capacity as the surviving corporation in the Merger, Company is hereinafter sometimes referred to as the "Surviving Corporation." SECTION 2.2 Effective Time of the Merger. The Merger shall become effective at such time (the "Effective Time") as shall be stated in a certificate of merger, in a form mutually acceptable to Acquiror and Company, to be filed with the Secretary of State of the State of Delaware in accordance with the DGCL (the "Merger Filing"). The Merger Filing shall be made simultaneously with or as soon as practicable after the satisfaction or waiver of the -6- 11 conditions set forth in Article VIII. The parties acknowledge that it is their mutual desire and intent to consummate the Merger as soon as practicable after the consummation of the Offer. Accordingly, the parties shall, subject to the provisions hereof and to the fiduciary duties of their respective boards of directors, use all reasonable best efforts to consummate, as soon as practicable after the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, the Merger in accordance with Section 2.4. SECTION 2.3 Effects of the Merger. The Merger shall have the effects set forth in Section 259 of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all the property, rights, privileges, powers and franchises of Merger Sub and Company shall vest in the Surviving Corporation, and all debts, liabilities and duties of Merger Sub and Company shall become the debts, liabilities and duties of the Surviving Corporation. SECTION 2.4 Closing. Upon the terms and subject to the conditions hereof, as soon as practicable after consummation of the Offer, and, to the extent required by the DGCL, after the vote of the stockholders of Company holding a majority of the outstanding shares of Company Common Stock in favor of the approval of the Merger and this Agreement has been obtained, Company and Merger Sub (or Acquiror if appropriate) shall execute and file the Merger Filing, and the parties shall take all such other and further actions as may be required by law to make the Merger effective. Prior to the Merger Filing, a closing (the "Closing") will be held at the offices of Drinker Biddle & Reath LLP, One Logan Square, 18th and Cherry Streets, Philadelphia, PA 19103-6996 (or such other place as the parties may agree) for the purpose of confirming all of the foregoing. The date on which the Closing occurs is referred to in this Agreement as the "Closing Date." SECTION 2.5 Certificate of Incorporation. The Certificate of Incorporation of Merger Sub as amended and restated in the form of Exhibit B shall be the Certificate of Incorporation of the Surviving Corporation after the Effective Time and, subject to Section 7.8, thereafter may be amended in accordance with its terms and as provided in the DGCL. SECTION 2.6 Bylaws. The Bylaws of Merger Sub as amended and restated in the form of Exhibit C shall be the Bylaws of the Surviving Corporation after the Effective Time, and, subject to Section 7.8, thereafter may be amended in accordance with their terms and as provided by the Certificate of Incorporation of the Surviving Corporation and the DGCL. SECTION 2.7 Directors and Officers. The directors and officers of Merger Sub in office immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation after the Effective Time, and such directors and officers shall serve in accordance with the Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified. -7- 12 ARTICLE III CONVERSION OF SHARES SECTION 3.1 Conversion of Company Shares in the Merger. At the Effective Time, by virtue of the Merger and without any action on the part of any holder of any capital stock of Acquiror, Merger Sub or Company: (a) each share of Company Common Stock, other than shares to be cancelled in accordance with Section 3.1(b) and Dissenting Shares, shall, subject to Section 3.3, be converted into the right to receive the Common Stock Price (the "Merger Consideration"), payable to the holder thereof, in each case without interest; and (b) each share of capital stock of Company, if any, owned by Acquiror or any subsidiary of Acquiror or held in treasury by Company or any subsidiary of Company immediately prior to the Effective Time shall automatically be canceled and no consideration shall be paid in exchange therefor and shall cease to exist from and after the Effective Time. SECTION 3.2 Conversion of Subsidiary Shares. At the Effective Time, by virtue of the Merger and without any action on the part of Acquiror as the sole stockholder of Merger Sub, each issued and outstanding share of common stock, par value $.01 per share, of Merger Sub shall be converted into one fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation. SECTION 3.3 Funding of Payments. (a) At the Effective Time, Acquiror shall deposit with American Stock Transfer or such other paying agent as may be designated by Acquiror prior to the Effective Time with the approval of Company (the "Paying Agent") cash sufficient to make payments in accordance with this Article III. The cash amounts so deposited with the Paying Agent are referred to collectively as the "Exchange Fund." (b) As soon as reasonably practicable after the Effective Time, Acquiror shall cause the Paying Agent to mail to each record holder of a certificate or certificates that immediately prior to the Effective Time represented outstanding shares of Company Common Stock, other than shares of Company Common Stock cancelled pursuant to Section 3.1(b) (the "Company Stock Certificates"), (i) a letter of transmittal in customary form and containing such provisions as Acquiror may reasonably specify (including a provision confirming that delivery of Company Stock Certificates shall be effected, and risk of loss and title to Company Stock Certificates shall pass, only upon delivery of such Company Stock Certificates to the Paying Agent), and (ii) instructions for use in effecting the surrender of Company Stock Certificates in exchange for the Merger Consideration. Upon surrender of a Company Stock Certificate to the Paying Agent for exchange, together with a duly executed letter of transmittal and such other documents as may be reasonably required by the Paying Agent or Acquiror, (A) the holder of such Company Stock Certificate shall be entitled to receive in exchange therefor the Merger Consideration (less any amounts required to be withheld -8- 13 pursuant to applicable tax laws), and (B) the Company Stock Certificate so surrendered shall be canceled. Until surrendered as contemplated by this Section 3.3(b), each Company Stock Certificate shall be deemed, from and after the Effective Time, to represent only the right to receive the Merger Consideration (less any amounts required to be withheld pursuant to applicable tax laws). In the event of a transfer of ownership of shares of Company Common Stock which is not registered in the transfer records of Company, the Merger Consideration may be delivered (in accordance with this Article III) to a person other than the person in whose name the Company Stock Certificate so surrendered is registered if, upon presentation to the Paying Agent, such Company Stock Certificate is properly endorsed or otherwise in proper form for transfer and the person requesting such issuance pays any transfer or other taxes required by reason of the delivery of the Merger Consideration to a person other than the registered holder of such Company Stock Certificate or establishes to the satisfaction of the Acquiror that such tax has been paid or is not applicable. If any Company Stock Certificate shall have been lost, stolen or destroyed, Acquiror may, in its discretion and as a condition precedent to the delivery of the Merger Consideration, require the owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit and to deliver a bond (in such sum as Acquiror may reasonably direct) as indemnity against any claim that may be made against the Paying Agent, Acquiror or the Surviving Corporation with respect to such Company Stock Certificate. (c) Any portion of the Exchange Fund that remains undistributed to holders of Company Stock Certificates as of the date 180 days after the Effective Time shall be delivered to Acquiror upon demand, and any holders of Company Stock Certificates who have not theretofore surrendered their Company Stock Certificates in accordance with this Section 3.3 shall thereafter look only to Acquiror for satisfaction of their claims for the Merger Consideration. (d) Each of the Paying Agent, Acquiror and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock such amounts, if any, as may be required to be deducted or withheld therefrom under the Code or any provision of state, local or foreign tax law or under any other applicable Law. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person or entity to whom such amounts would otherwise have been paid. (e) Neither Acquiror, the Surviving Corporation nor the Paying Agent shall be liable to any holder or former holder of Company Common Stock or to any other person or entity with respect to the Merger Consideration delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Law. SECTION 3.4 Closing of Company's Transfer Books. At and after the Effective Time, holders of Company Stock Certificates shall cease to have any rights as stockholders of Company, except for the right to receive the Merger Consideration (less any amounts required to be withheld pursuant to applicable tax laws). At the Effective Time, the stock transfer books of Company shall be closed and no transfer of shares of Company Common Stock which were outstanding immediately prior to the Effective Time shall thereafter be made. If, after the -9- 14 Effective Time, subject to the terms and conditions of this Agreement, Company Stock Certificates formerly representing shares of Company Common Stock are presented to the Surviving Corporation or the Paying Agent, they shall be canceled and exchanged for the Merger Consideration (less any amounts required to be withheld pursuant to applicable tax laws) in accordance with this Article III. SECTION 3.5 Dissenting Shares. (a) Notwithstanding any other provision of this Agreement, any shares of Company Common Stock held by a holder (a "Dissenting Shareholder") who has timely demanded and perfected a demand for appraisal of such shares of Company Common Stock in accordance with Section 262 of the DGCL and, as of the Effective Time, and has neither effectively withdrawn nor lost the right to such appraisal shall not represent a right to receive the Merger Consideration for such shares of Company Common Stock pursuant to Section 3.1(a) above, but rather the holder thereof shall be entitled to only such rights as are granted by the DGCL. (b) If any Dissenting Shareholder demanding appraisal of such Dissenting Shareholder's shares of Company Common Stock ("Dissenting Shares") under the DGCL shall effectively withdraw or lose (through failure to perfect or otherwise) such right to appraisal, then as of the Effective Time or the occurrence of such event, whichever later occurs, such Dissenting Shares shall automatically be converted into and represent only the right to receive, with respect to such Dissenting Shares and upon surrender of the Company Stock Certificate(s) representing such Dissenting Shares in accordance with this Agreement, the Merger Consideration (less any amounts required to be withheld pursuant to applicable tax Laws). (c) Company shall give Acquiror prompt notice of any demands by a Dissenting Shareholder for appraisal of such Dissenting Shareholder's Company Common Stock, or notices of intent to demand appraisal, received by Company and Acquiror shall have the right to participate in all negotiations and proceedings with respect to such demand. Company shall not, except with the prior consent of Acquiror or as otherwise required by law, make any payment with respect to, or settle, or offer to settle, any such demands. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY Except as set forth on the Disclosure Schedule delivered by Company to the Acquiror Companies concurrently with the execution of this Agreement (the "Company Disclosure Schedule") or as otherwise permitted or contemplated by this Agreement, Company hereby represents and warrants to the Acquiror Companies that: SECTION 4.1 Organization and Qualification; Subsidiaries. Each of Company and its subsidiaries is a corporation or other legal entity duly organized, validly existing and in -10- 15 good standing (with respect to jurisdictions that recognize such concept) under the laws of the jurisdiction in which it is organized, has all requisite corporate or other power, as the case may be, and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified and in good standing (with respect to jurisdictions that recognize such concept) to do business in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties makes such qualification necessary, other than where the failure to be so duly qualified and in good standing individually and in the aggregate has not and would not reasonably be expected to have a Company Material Adverse Effect. The term "Company Material Adverse Effect" as used in this Agreement shall mean any change or effect (including prospective changes or effects) that, individually or when taken together with all other changes or effects, is or would reasonably be expected to be adverse to the assets, liabilities, financial condition, results of operations or business of Company and its subsidiaries, taken as a whole, which changes or effects in relation to the assets, liabilities, financial condition, results of operations or business of Company and its subsidiaries taken as a whole result or would reasonably be expected to result in damages, liabilities or expenses to Company of $5,000,000 or more, provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has or will be a Company Material Adverse Effect: (a) any changes in the trading price or trading volume for shares of Company Common Stock between the date hereof and the Effective Time, (b) the failure by Company to meet internal projections or forecasts or published revenue or earning predictions for any period ending (or for which revenues or earnings are disclosed) on or after the date hereof, (c) any change in the economy or securities markets of the United States or any other country or region in general, (d) any change or effect resulting from the announcement of the transactions contemplated hereby, (e) changes in law or generally accepted accounting principles, which affect generally entities such as Acquiror or Company, (f) any change or effect in the semiconductor or the semiconductor capital equipment industries in general, and not specifically Company or its subsidiaries, (g) any change or effect resulting from the taking of any actions by Company that have been approved in writing by Acquiror, including those actions contemplated by Section 7.9, or (h) any change or effect resulting from compliance by any of the parties hereto with the terms of this Agreement. Section 4.1 of the Disclosure Schedule sets forth, as of the date of this Agreement, a true and complete list of all Company's directly or indirectly owned subsidiaries, together with (A) the jurisdiction of incorporation of each subsidiary and the percentage of each subsidiary's outstanding capital stock or other equity interests owned by Company or another subsidiary of Company and (B) an indication of whether each such subsidiary is a Significant Subsidiary (as defined in Section 10.3(f)). SECTION 4.2 Charter and Bylaws. Company has heretofore furnished to Acquiror complete and correct copies of the Articles or Certificates of Incorporation and the Bylaws or the equivalent organizational documents, in each case as amended or restated to the date hereof, of Company and each of its subsidiaries. Neither Company nor any of its subsidiaries is in violation of any of the provisions of its Articles or Certificate of Incorporation or Bylaws (or equivalent organizational documents). -11- 16 SECTION 4.3 Company Capitalization. (a) The authorized capital stock of Company consists of (i) 25,000,000 shares of Company Common Stock, of which, as of September 30, 2000: (A) 9,489,760 shares were issued and outstanding (each, together with a preferred stock purchase right (the "Rights") issued pursuant to the Rights Agreement dated as of September 28, 1998, by and between Company and American Securities Transfer and Trust Inc. (the "Company Rights Agreement")), (B) 1,252,273 shares were reserved for future issuance pursuant to grants under Company's 1997 Employee Stock Purchase Plan, as amended (the "Company ESPP") or outstanding stock options, grants or awards (collectively, the "Stock Awards") granted pursuant to Company's 1995 Stock Option Plan, as amended, Company's Non-Qualified Stock Option Plan, as amended, Company's Incentive Stock Option Plan, as amended, and Company's 1999 Stock Option Plan (collectively, the "Option Plans"), (C) no shares were reserved for future issuance pursuant to outstanding warrants, and (D) 408,165 shares were issued and held in treasury, and (ii) 10,000,000 shares of Preferred Stock, par value $ 0.05 per share, of which none was issued and outstanding. Except as described in this Section 4.3, as of the date of this Agreement, no shares of capital stock of Company are reserved for issuance for any other purpose. Since September 30, 2000, no shares of capital stock have been issued by Company except pursuant to agreements for which shares were adequately reserved at such date and which are disclosed under clause (B) of this subsection (a). Since September 30, 2000, Company has not granted options for, or other rights to purchase or otherwise acquire, more than 25,000 shares of Company Common Stock. Each of the issued shares of capital stock of Company is duly authorized, validly issued, fully paid and nonassessable, and has not been issued in violation of (nor are any of the authorized shares of capital stock subject to) any preemptive or similar rights or agreement to which Company is a party or is bound, and all such issued shares owned by Company or a subsidiary of Company are owned free and clear of all security interests, liens, pledges, charges or other encumbrances of any nature whatsoever. (b) No bonds, debentures, notes or other indebtedness of Company having the right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which stockholders may vote ("Voting Debt") is issued or outstanding. All shares of Company Common Stock which may be issued pursuant to the Option Plans will, when issued in accordance with the terms of the related Option Plan and Stock Award, be validly issued, fully paid and nonassessable and not subject to preemptive rights. (c) Except (i) as set forth in Section 4.3(a) above, or (ii) pursuant to the Rights Agreement, there are no options, warrants or other rights (including registration rights), agreements, arrangements or commitments of any character to which Company or any of its subsidiaries is a party relating to the capital stock of Company (issued or unissued) or the Voting Debt of Company. There are no voting trusts, proxies or other agreements or understandings to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound with respect to the voting of any shares of capital stock of Company. (d) Company has previously delivered to Acquiror a complete and correct list setting forth as of September 30, 2000, (i) the number of Stock Awards outstanding, -12- 17 (ii) the exercise price of each outstanding Stock Award, and (iii) the number of Stock Awards that are vested and exercisable as of such date. SECTION 4.4 Subsidiary Capitalization. Each of the issued shares of capital stock of, or other equity interests in, each of Company's subsidiaries is duly authorized, validly issued, and, in the case of shares of capital stock, fully paid and nonassessable, and has not been issued in violation of (nor are any of the authorized shares of capital stock of, or other equity interests in, such entities subject to) any preemptive or similar rights or agreement to which any such subsidiary is a party or is bound, and all such issued shares or other equity interests owned by Company or a subsidiary of Company are owned free and clear of all security interests, liens pledges, charges or other encumbrances of any nature whatsoever. There are no options, warrants or other rights (including registration rights), agreements, arrangements or commitments of any character to which Company or any of Company's subsidiaries is a party relating to the capital stock of any of Company's subsidiaries (issued or unissued). There are no obligations, contingent or otherwise, of Company or any of its subsidiaries to (other than advances to subsidiaries in the ordinary course of business) provide material funds to, or make any material investment in (in the form of a loan, capital contribution or otherwise), or provide any guarantee with respect to the material obligations of, any subsidiary of Company or any other person or entity. Neither Company (except with respect to its subsidiaries disclosed on Section 4.1 of the Company Disclosure Schedule) nor any of such subsidiaries directly or indirectly own or have agreed to purchase or otherwise acquire any interest convertible into or exchangeable or exercisable for, the capital stock or other equity interest of any corporation, partnership, joint venture or other business association or entity. Since June 1, 1995, neither Company nor any of its subsidiaries has, at any time, been a general partner of any general partnership, limited partnership or other person or entity. There are no agreements, arrangements or commitments of any character (contingent or otherwise) pursuant to which any person or entity is or may be entitled to receive any payment based on the revenues or earnings, or calculated in accordance therewith, of any of Company's subsidiaries. SECTION 4.5 Authority. Company has the requisite corporate power and authority to execute and deliver this Agreement and the Stock Option Agreement (the "Transaction Documents"), to perform its obligations under the Transaction Documents and to consummate the transactions contemplated by the Transaction Documents (subject to, with respect to the Merger, the approval and adoption of this Agreement and the Merger by the stockholders of Company as set forth in Section 4.20 of this Agreement). The execution and delivery of the Transaction Documents by Company and the consummation by Company of the transactions contemplated hereby or thereby, have been duly authorized by all necessary corporate action (including, without limitation, the unanimous authorization of, and approval by, the Board of Directors of Company on October 11, 2000 of the Offer, the Merger and the execution, delivery and performance of the Transaction Documents by Company), subject to, with respect to the Merger, the approval and adoption of this Agreement and the Merger by the stockholders of Company as set forth in Section 4.20 of this Agreement. The Transaction Documents have been duly executed and delivered by Company and, assuming the due authorization, execution and delivery thereof by the Acquiror Companies (to the extent a party thereto), constitute the legal, valid and binding obligations of Company, enforceable against Company in accordance with their respective terms, except as enforcement thereof may be -13- 18 limited by (i) bankruptcy, insolvency, reorganization, moratorium and similar laws, both state and federal, affecting the enforcement of creditors' rights or remedies in general as from time to time in effect or (ii) the exercise by courts of equity powers. SECTION 4.6 No Conflict; Required Filings and Consents. (a) The execution and delivery of the Transaction Documents by Company does not, and the consummation of the transactions contemplated by the Transaction Documents will not, (i) conflict with or violate the Articles or Certificate of Incorporation or Bylaws, or the equivalent organizational documents, in each case as amended or restated, of Company or any of its subsidiaries, (ii) subject to, with respect to the Merger, the approval and adoption of this Agreement and the Merger by the stockholders of Company set forth in Section 4.20 of this Agreement, conflict with or violate in any material respect any Laws applicable to Company or any of its subsidiaries or by or to which any of their respective properties are bound or subject or (iii) result in any material breach of or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or require payment under, or result in the creation of a lien or encumbrance on any of the properties or assets of Company or any of its subsidiaries pursuant to any Significant Contract. For purposes of this Agreement, the term (A) "Contract" includes any written, oral or other agreement, contract, lease, instrument, note, option, warranty, purchase order, bond, mortgage, indenture, license or similar authorization, insurance policy, benefit plan or legally binding commitment or undertaking of any nature, (B) "Significant Contract" means any Contract filed or required to be filed as an exhibit to the Company SEC Reports (as defined in Section 4.8(a)), any Employment Contract (as defined in Section 4.14(h)) or any Contract that is required to be disclosed in the Company Disclosure Schedule pursuant to Sections 4.13(a) through (l), (C) "Law" means any material federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree, and (D) "Permit" means any material franchise, grant, authorization, license, permit, easement, variance, exemption, consent, certificate, identification and registration number, approval or order issued by a Governmental Entity necessary to own, lease or operate Company's properties or to carry on Company's business as it is now being conducted. (b) The execution and delivery of the Transaction Documents by Company does not, and the performance of the Transaction Documents by Company will not, require Company to obtain any material consent, license, permit, waiver, approval, authorization or order of, or to make any filing with or notification to, any governmental or regulatory authority, federal, state, local or foreign (collectively, "Governmental Entities") or any other person or entity, except (i) for applicable requirements, if any, of the Exchange Act, state securities or blue sky laws ("Blue Sky Laws"), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the filing and recordation of appropriate merger documents as required by the DGCL, and, with respect to the Merger, the approval and adoption of this Agreement and the Merger by the stockholders of Company as set forth in Section 4.20 of this Agreement, and (ii) for such consents, licenses, permits, waivers, approvals, authorizations, orders, filings or notifications with Governmental Entities, the failure of which to be made or obtained will not have individually or in the aggregate a Company Material Adverse Effect or impair or delay the transactions contemplated by the Transaction Documents. -14- 19 SECTION 4.7 Permits; Compliance. Each of Company and its subsidiaries has in effect all Permits. Neither Company nor any of its subsidiaries is in any material respect in conflict with, or in default or violation of, any such Permits or of any Law applicable to Company or any of its subsidiaries or by or to which any of their respective properties is bound or subject. Since January 1, 1998, neither Company nor any of its subsidiaries has received from any Governmental Entity any written notification with respect to, or otherwise has knowledge of, any possible conflicts, defaults or violations of Laws or Permits, except for possible conflicts, defaults or violations that have not had and will not have a Company Material Adverse Effect. SECTION 4.8 Reports; Financial Statements. (a) Since December 31, 1998, Company has filed on a timely basis all forms, reports, statements, schedules and other documents required to be filed by it with the SEC (collectively referred to as the "Company SEC Reports"). As of the time each of the Company SEC Reports was filed with the SEC (or, if amended or superseded by a later filed Company SEC Report, then on the date of such filing), the Company SEC Reports (i) complied in all material respects with the requirements of the Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports and (ii) did not (except with respect to the subject matter of any exhibits thereto, as to which no representation is made) (A) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or (B) omit to state a material fact that is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The consolidated financial statements of Company contained in the Company SEC Reports (i) complied in all material respects, as of the time of their filing with the SEC (or, if amended or superceded by a later filed Company SEC Report, then on the date of such filing), with the published rules and regulations of the SEC, (ii) were prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis throughout the periods involved (except (A) to the extent required by changes in generally accepted accounting principles, and (B) as may be indicated in the notes thereto) and (iii) fairly present in all material respects the consolidated financial position of Company and its subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows for the periods indicated (subject, in the case of unaudited consolidated financial statements, to normal year-end audit adjustments), except that any pro forma financial statements contained in such consolidated financial statements are not necessarily indicative of the consolidated financial position of Company and its subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows for the periods indicated. SECTION 4.9 Undisclosed Liabilities. Company and its subsidiaries, taken as a whole, have no liabilities or obligations (whether absolute, accrued or contingent) except (a) liabilities, obligations or contingencies that are accrued or reserved against in the consolidated balance sheet of Company and its subsidiaries included in the most recently filed Company SEC Report filed prior to the date of this Agreement or reflected in the notes thereto or (b) additional liabilities that since the date of such balance sheet that (i) have arisen in the ordinary course of -15- 20 business; (ii) are accrued or reserved against on the books and records of Company and its subsidiaries; and (iii) amount in the aggregate to less than $500,000. SECTION 4.10 Absence of Certain Changes or Events. Except as described in the Company SEC Reports filed prior to the date of this Agreement or as contemplated in this Agreement, between December 31, 1999 and the date of this Agreement, Company and its subsidiaries have conducted their respective businesses only in the usual and ordinary course consistent with past practice and there has not been any Company Material Adverse Effect or any event, condition or contingency that could reasonably be expected to result in such a Company Material Adverse Effect. SECTION 4.11 Litigation. Except as disclosed in the Company SEC Reports filed prior to the date of this Agreement, there is no claim, action, suit, litigation, proceeding, arbitration or, to the knowledge of Company, investigation of any kind by any Governmental Entity, at law or in equity (including actions or proceedings seeking injunctive relief), pending or, to the knowledge of Company, threatened against Company or any of its subsidiaries or any properties or rights of Company or any of its subsidiaries, other than claims, actions, suit, litigations, proceedings, arbitrations or investigations where the only remedy being sought is monetary damages of less than $25,000. Neither Company nor any of its subsidiaries is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or any judgment, order, writ, injunction, decree or award of any Governmental Entity or arbitrator, including, without limitation, cease-and-desist or other orders, that is material to the business of Company and its subsidiaries taken as a whole. SECTION 4.12 Customers. For the three years prior to the date of this Agreement there have not been any disputes or controversies involving, in the aggregate, more than $500,000 between Company or any of its subsidiaries and any single customer of any of them. Section 4.12 of the Disclosure Schedule lists the names of the ten (10) customers of Company that generated the most revenue during 1998 and 1999 and the aggregate revenues attributable to each in each such period. No customer that accounted for more than of 5% of the revenues of Company during 1998, 1999 or the current year to date has terminated or materially reduced, or has given notice that it intends to terminate or materially reduce, the amount of business done with Company. SECTION 4.13 Major Contracts. Section 4.13 of the Company Disclosure Schedule sets forth a complete and correct list of the following to which as of the date of this Agreement Company or any of its subsidiaries is a party to or subject to and which has not been filed as an exhibit to the Company SEC Reports: (a) Each Contract involving the performance of services or delivery of goods or materials by or to Company or any of its subsidiaries (i) of an aggregate amount or value in excess of $500,000 in any 12-month period and (ii) which is not terminable by Company or such subsidiary without payment of penalty or premium on 30 days notice or less; (b) Each note, advance, guaranty, bond, letter of credit or other evidence of indebtedness entered into, issued or to be issued (contingently or otherwise) by or to -16- 21 Company or any of its subsidiaries, and all loan and other agreements relating thereto; provided, however, that no such instrument need be listed where the amount owed, advanced, guaranteed or subject to a letter of credit does not exceed $25,000 with respect to any single instrument unless the aggregate of all such excluded instruments exceeds $100,000; (c) Each restriction, deed of trust, pledge, lien, security interest or other charge and encumbrance of any nature relating to or affecting any of the assets or properties of Company or any of its subsidiaries, other than restrictions, deeds of trust, pledges, liens, security interests or other charges and encumbrances that would not materially affect the value of such assets or properties or interfere with the ability of Company or any of its subsidiaries to conduct its business as currently conducted; (d) Each Contract to which Company is a party or is otherwise bound providing for payments to or by any person or entity based on sales, purchases or profits, other than direct payments for goods or services and other than sale agency Contracts substantially similar to the form of sale agency Contract previously delivered by Company to Acquiror; (e) Each other Contract to which Company or any of its subsidiaries is a party or is otherwise bound that is material to its business, operation, capitalization, assets, liabilities, financial condition or prospects; (f) Any lease for real property, and any lease for personal property requiring annual payments of more than $100,000; (g) Each Contract (i) relating to the acquisition, transfer, development, sharing or license of any material Intellectual Property (as defined in Section 4.16(e)) (except for any Contract pursuant to which (A) any Intellectual Property is licensed to Company or any of its subsidiaries under any third party software license generally available to the public, or (B) any Intellectual Property is licensed by Company or any of its subsidiaries to any person or entity on a non-exclusive basis), or (ii) limiting Company or any of its subsidiaries from exploiting fully any Intellectual Property that is material to the conduct of the business of Company and its subsidiaries; (h) Each Contract pursuant to which Company or any of its subsidiaries is required to (i) provide maintenance or similar services if the Contract contains, with respect to such maintenance or similar services, payment terms, warranty, indemnification, limitation of liability or similar provisions that deviate in any material respect from the standard form of Contract used by Company (such standard form having been previously delivered to Acquiror), or (ii) develop or provide any new technology or product or any upgrade or enhancement to any existing technology or product; (i) Each Contract imposing any restriction on the right or ability of Company or any of its subsidiaries (i) to compete with any other person or entity or in any market or geographical area, (ii) to acquire any product or other asset or any services from any other person or entity (including all exclusive and sole-source supply Contracts), (iii) to solicit, hire or retain any person or entity as an employee, consultant or independent contractor, (iv) to -17- 22 develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other person or entity, or (v) to perform services for any other person or entity; (j) Each Contract (i) that imposes any confidentiality obligation on any of Company or any of its subsidiaries, other than Contracts with actual or potential suppliers or customers entered into in the ordinary course of business consistent with past practice and non-disclosure Contracts entered into in connection with possible strategic transactions, or (ii) containing "standstill" or similar provisions; (k) Each Contract (i) to which any Governmental Entity is a party or under which any Governmental Entity has any rights or obligations, or (ii) directly or indirectly benefiting any Government Entity (including any subcontract or other Contract between Company or any of its subsidiaries and any contractor or subcontractor to any Governmental Entity; (l) Each Contract relating to a joint venture, partnership, limited liability company or similar arrangement; (m) Each Contract relating to any currency hedging; (n) Each outstanding loan or advance (excluding advances for travel and entertainment expenses made in accordance with Company's customary policies for such advances) in an amount in excess of $5,000 to any person or entity (including any stockholder and any director, officer, or employee of Company); (o) Each Contract that involves the pick-up, handling, transportation, disposal or treatment of hazardous waste; (p) Each Contract that provides for indemnification of any current or former officer, director or employee; (q) Each Contract incorporating or relating to any product warranty or similar obligation, except for Contracts substantially identical to the standard forms previously delivered by Company to Acquiror; and (r) Each material policy and binder of insurance (including without limitation, property, casualty, liability, life, health, accident, workers' compensation and disability insurance and bonding arrangements). Neither Company nor any of its subsidiaries is, nor to the knowledge of Company is any other party thereto, in default in any material respect under the terms of any Significant Contract or Permit. SECTION 4.14 Employee Benefit Plans; Labor Matters. (a) Section 4.14(a) of the Company Disclosure Schedule contains a complete and correct list of all benefit plans, arrangements, commitments and payroll practices -18- 23 (whether or not employee benefit plans ("Benefit Plans") as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), including, without limitation, sick leave, vacation pay, severance pay, salary continuation for disability, consulting or other compensation arrangements, retirement, deferred compensation, bonus, incentive compensation, stock purchase, stock option, health including hospitalization, medical and dental, life insurance and scholarship programs maintained for the benefit of any present or former employees of Company or any of its subsidiaries or any ERISA Affiliate (as defined below) or to which Company or any of its subsidiaries or any ERISA Affiliate is or was within three years before the date of this Agreement obligated to make payments. Company has delivered to Acquiror, with respect to all such plans, arrangements, commitments and practices, true, complete and correct copies of the following: all plan documents, handbooks, manuals, collective bargaining agreements and similar documents governing employment policies, practices and procedures; the most recent summary plan descriptions and any subsequent summaries of material modifications discussing any employee benefit subject to Part I of ERISA; Forms series 5500 as filed with the Internal Revenue Service (the "IRS") for the three most recent plan years for any employee benefit plan subject to the Form series 5500 filing requirement; all trust agreements with respect to employee benefit plans funded through a trust; group annuity contracts with insurers providing benefits for participants; most recent annual audit and accounting of plan assets for all funded plans; and most recent IRS determination letter for all plans qualified under Code section 401(a). As used herein, "ERISA Affiliate" shall refer to any trade or business, whether or not incorporated, under common control with Company within the meaning of Section 414(b), (c), (m) or (o) of the Code. (b) With respect to each Benefit Plan required to be listed on the Company Disclosure Schedule: (i) each Benefit Plan has been administered in compliance with its terms, and is in compliance in all material respects with the applicable provisions of ERISA, the Code and all other applicable Laws; (ii) Company has made or provided for all contributions required under the terms of such Benefit Plans; (iii) there have been no "prohibited transactions" (as described in Section 4975 of the Code or in Part 4 of Subtitle B of Title I of ERISA) with respect to any Benefit Plan; (iv) there are and during the past three years there have been no inquiries, proceedings, claims or suits pending or threatened by any governmental agency or authority or by any participant or beneficiary against any of the Benefit Plans, the assets of any of the trusts under such Benefit Plans or the Benefit Plan sponsor, or against any fiduciary of any of such Benefit Plans with respect to the design or operation of the Benefit Plans; (v) each Employee Pension Benefit Plan which is intended to be "qualified" within the meaning of Section 401(a) of the Code, and any trust created pursuant to any such Employee Pension Benefit Plan that is intended to be exempt from federal income tax under Section 501(a) of the Code, has been issued a favorable determination letter which is currently applicable; and (vi) neither Company, any subsidiary of Company nor any ERISA Affiliate is aware of any circumstance or event which would jeopardize the tax-qualified status of any such Employee Pension Benefit Plan or the tax-exempt status of any related trust, or which would cause the imposition of any liability, penalty or tax under ERISA or the Code with respect to any Benefit Plan. (c) Neither Company, any subsidiary of Company nor any ERISA Affiliate maintains or has ever maintained or been obligated to contribute to (i) an Employee -19- 24 Pension Plan which is a defined benefit plan or a money purchase plan, or (ii) a "Multiemployer Plan" (as such term is defined by Section 4001(a)(3) of ERISA). (d) All employee benefit plans required to be listed on the Company Disclosure Schedule may, without liability, be amended, terminated or otherwise discontinued except as specifically prohibited by federal law. (e) Any bonding required under ERISA with respect to any Benefit Plan required to be listed on the Company Disclosure Schedule has been obtained and is in full force and effect and no funds held by or under the control of Company, any subsidiary of Company or any ERISA affiliate are plan assets. (f) Neither Company, any subsidiary of Company nor any ERISA Affiliate maintains any retired life and/or retired health insurance plans which provide for continuing benefits or coverage for any employee or any beneficiary of an employee after such employee's termination of employment (except as otherwise required by Section 4980B of the Code). (g) The consummation of the transactions contemplated by the Transaction Documents will not, alone or together with any other event, (i) entitle any person to severance pay, unemployment compensation or any other payment, or (ii) except as set forth in Section 7.9, accelerate the time of payment or vesting, or increase the amount of compensation or severance pay due to any such employee. (h) Company has delivered to Acquiror (i) each Contract in effect relating to the employment of, or the performance of services by, any officer of Company or any of its subsidiaries (other than Contracts terminable at will) or pursuant to which Company or any of its subsidiaries is or may become obligated to make any severance, termination or similar payment to any current or former employee or director, (ii) each Contract in effect pursuant to which Company or any of its subsidiaries is or may become obligated to make any bonus or other payment (other than payments constituting base salary or commissions) in excess of $10,000 to any current or former employee or director, (iii) each Contract in effect with consultants of Company obligating Company to make annual cash payments in an amount exceeding $50,000; and (iv) a schedule listing all officers of Company who have executed a non-competition Contract with Company that is in effect as of the date of this Agreement (collectively, the Contracts set forth in clauses (i) through (iv) above, the "Employment Contracts"). (i) Except as set forth in Section 7.9, Company has not amended, or taken any other actions (including, without limitation, the acceleration of vesting, waiving of performance criteria or the adjustment of awards or any other actions permitted upon a change in control of Company or a filing under Sections 13(d) or 14(d) of the Exchange Act with respect to Company) with respect to any of the Benefit Plans or any of the plans, programs, agreements, policies or other arrangements described in Section 4.14 of this Agreement since December 31, 1998. -20- 25 SECTION 4.15 Taxes. (a) As of the date of this Agreement, each of Company and its subsidiaries has filed all material Tax returns and reports ("Tax Returns") required to be filed by it and all such Tax Returns are complete and correct in all material respects, or requests for extensions to file such Tax Returns have been timely filed, granted and have not expired. Company and each of its subsidiaries has paid (or Company has paid on their behalf) all Taxes shown as due on such Tax Returns, and the most recent financial statements contained in the Company SEC Reports reflect an adequate reserve for all Taxes payable by Company and its subsidiaries for all taxable periods and portions thereof through the date of such financial statements and for all deferred Taxes accrued through such date. (b) Neither Company nor any of its subsidiaries is a party to any tax sharing, tax indemnity or other agreement or arrangement with respect to Taxes with any entity not included in the consolidated financial statements of Company. (c) There are no federal, state, local or foreign audits or other administrative or judicial proceedings currently pending with respect to any Tax Returns. (d) No assessment, deficiency or adjustment has been asserted or proposed with respect to any Tax Return of or with respect to Company or any of its subsidiaries that is not adequately reserved for. (e) Except for statutory liens for current Taxes not yet due, no material liens for Taxes exist upon the assets of any of Company or its subsidiaries. (f) As of the date of this Agreement, neither Company nor any of its subsidiaries has filed a consent under Section 341(f) of the Code or is the subject of any adjustment under Section 481(a) of the Code relating to a change in accounting method. Neither Company nor any of its subsidiaries is a partner in a partnership or other entity that is classified as a partnership for federal income Tax purposes. (g) The deduction of any amount payable pursuant to the terms of the Benefit Plans, Option Plans or any employment Contract will not be subject to disallowance under Section 280G or Section 162(m) of the Code. SECTION 4.16 Intellectual Property. (a) Section 4.16(a)(i) of the Company Disclosure Schedule sets forth as of the date of this Agreement, with respect to each item of Intellectual Property owned by Company or any of its subsidiaries and described in Section 4.16(e)(i), (A) a brief description of such item of Intellectual Property, and (B) the names of the jurisdictions covered by the applicable registration or application. Section 4.16 (a)(ii) of the Company Disclosure Schedule identifies and provides a brief description of, and identifies any ongoing royalty or annual payment obligations in excess of $100,000 existing on the date of this Agreement with respect to, each item of Intellectual Property that is licensed or otherwise made available to Company or any of its subsidiaries by any person or entity and is material to the business of Company or any -21- 26 of its subsidiaries (except for any item of Intellectual Property that is licensed to Company or its subsidiaries under any third party software license generally available to the public), and identifies the Contract under which such item of Intellectual Property is being licensed or otherwise made available to Company or its applicable subsidiary. Company or its subsidiaries own or are validly licensed or otherwise have the right to use all of the Intellectual Property that is material to the conduct of the business of Company and its subsidiaries, taken as a whole, free and clear of all liens, mortgages, security interests, restrictions, pledges, or other encumbrances of any nature whatsoever, except for (1) any lien for current taxes not yet due and payable, and (2) liens that do not (individually or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of any of Company or its subsidiaries. Neither Company nor any of its subsidiaries has developed jointly with any other person or entity any item of Intellectual Property that is material to the business of Company and its subsidiaries, taken as a whole, with respect to which such other person or entity has any rights. Neither Company nor any of its subsidiaries has licensed, or otherwise granted, to any third party any rights in or to any Intellectual Property that is material to the conduct of Company and its subsidiaries, taken as a whole. (b) Company and each of its subsidiaries have taken reasonable measures and precautions to protect and maintain the confidentiality, secrecy and value of all Intellectual Property owned or licensed by Company or any of its subsidiaries that is material to the conduct of the business of Company and its subsidiaries, taken as a whole (except such Intellectual Property whose value would be unimpaired by disclosure). No current or former employee, officer, director, stockholder, consultant or independent contractor has any right, claim or interest (other than those irrevocably assigned to Company) in or with respect to any Intellectual Property owned or licensed by Company or any of its subsidiaries that is material to the conduct of the business of Company and its subsidiaries, taken as a whole. (c) (i) All patents, trademarks, service marks and copyrights held by Company or any of its subsidiaries that are material to Company and its business are valid, enforceable and subsisting; (ii) none of the Intellectual Property owned by Company or any of its subsidiaries and no Intellectual Property that is currently being developed by Company or any of its subsidiaries (either by itself or with any other person or entity) infringes or misappropriates any Intellectual Property owned or used by any other person or entity; (iii) none of the products that are or have been designed, created, developed, assembled, manufactured or sold by any of Company or any of its subsidiaries is infringing, misappropriating or making any unlawful or unauthorized use of any Intellectual Property owned or used by any other person or entity, and none of such products has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and neither Company nor any of its subsidiaries has received any notice or other communication (in writing or, to the knowledge of Company, otherwise) of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Intellectual Property owned or used by any other person or entity with respect to such products; (iv) to the knowledge of Company, no other person or entity is infringing, misappropriating or making any unlawful or unauthorized use of, and no Intellectual Property owned or used by any other person or entity infringes or conflicts with, any Intellectual Property owned or licensed by Company or any of its subsidiaries that is material to the conduct of the business of Company and its subsidiaries, taken as a whole; and (v) to the knowledge of -22- 27 Company, none of the Intellectual Property licensed to Company or any of its subsidiaries infringes, misappropriates or conflicts with any Intellectual Property owned or used by another person or entity. (d) The Intellectual Property owned or licensed by Company or any of its subsidiaries constitutes all the Intellectual Property necessary to enable Company and each of its subsidiaries to conduct their business in the manner in which such business has been and is being conducted. (e) For purposes of this Agreement, "Intellectual Property" shall mean any: (i) patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application; (ii) copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, customer list, franchise, system, computer software, computer program, source code, algorithm, invention, design, blueprint, engineering drawing, proprietary product, technology, proprietary right or other intellectual property right or intangible assets; and (iii) right to use or exploit any of the foregoing. SECTION 4.17 Transactions with Affiliates. Between the date of Company's last proxy statement filed with the SEC and the date of this Agreement, no event has occurred that would be required to be reported by Company pursuant to Item 404 of Regulation S-K promulgated by the SEC. SECTION 4.18 Certain Business Practices. None of Company, any of its subsidiaries or any directors, officers, agents or employees of Company or any of its subsidiaries has (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any material provision of the Foreign Corrupt Practices Act of 1977, as amended, (c) consummated any transaction, made any payment, entered into any agreement or arrangement or taken any other action in violation of Section 1128B(b) of the Social Security Act, as amended, or (d) made any other unlawful payment. SECTION 4.19 Opinion of Financial Advisor. Company has received the opinion of Banc of America Securities LLC to the effect that, as of the date of this Agreement, the consideration to be received by the holders of Company Common Stock in the Offer and the Merger is fair, from a financial point of view, to such holders. Company has been authorized by Banc of America Securities LLC to permit the inclusion of such opinion (and, subject to prior review and consent by Banc of America Securities LLC, a reference thereto) in Schedule 14D-9 and the Company Proxy Statement. SECTION 4.20 Vote Required. Subject to Section 7.1(b), the only votes of the holders of any class or series of Company capital stock necessary to approve the Merger are the affirmative votes of the holders of a majority of the outstanding shares of the Company Common Stock as of the record date for the Company Stockholders Meeting. The vote of the holders of -23- 28 any class or series of Company capital stock is not necessary to consummate the Offer or any transaction contemplated by the Transaction Documents other than as set forth in the preceding sentence. SECTION 4.21 Brokers. No broker, finder or investment banker (other than Banc of America Securities LLC) is entitled to any brokerage, finder's, financial advisors or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Company. Prior to the date of this Agreement, Company has made available to Acquiror a complete and correct copy of all agreements between Company and Banc of America Securities LLC pursuant to which such firm will be entitled to any payment relating to the transactions contemplated by this Agreement. SECTION 4.22 Company Rights Agreement. Company has amended the Company Rights Agreement to provide that neither Acquiror nor Merger Sub, nor any affiliate or Acquiror or Merger Sub, shall be deemed to be an Acquiring Person or entity (as defined in the Company Rights Agreement) in connection with the transactions contemplated by this Agreement. The Rights will not separate from the Company Common Stock as a result of the execution, delivery or performance of any of the Transaction Documents or the consummation of the Offer or the Merger or any of the other transactions contemplated hereby or thereby, and none of Company, Acquiror, Merger Sub or the Surviving Corporation, nor any of their respective affiliates, shall have any obligations under the Company Rights Agreement to any holder (or former holder) of Rights as of or following the consummation of the Offer or following the Effective Time. SECTION 4.23 Insurance. Company and each of its subsidiaries are presently insured, and during each of the past three calendar years have been insured against such risks as, to Company's knowledge, companies engaged in a similar business are customarily insured. Neither Company nor any of its subsidiaries, since December 31, 1997, has received any written notice or other written communication regarding any actual or possible (a) cancellation or invalidation of any material insurance policy, (b) refusal of any coverage or rejection of any material claim under any insurance policy, or (c) material adjustment in the amount of the premiums payable with respect to any insurance policy. SECTION 4.24 Properties. Company and its subsidiaries have good and marketable title to, or valid leaseholds in, free and clear of all liens, mortgages, security interests, restrictions, pledges, or other encumbrances, to all of their material properties and assets, except for (a) such properties and assets that are no longer used or useful in the conduct of its business or that have been sold or otherwise disposed of in the ordinary course of business, and (b) liens, mortgages, security interests, or pledges that would not materially affect the value thereof or interfere with the ability of Company or any of its subsidiaries to conduct its business as currently conducted. Neither Company nor any of its subsidiaries own any material real property or any material interest in real property, except for (i) the leaseholds created under the real property leases identified in Section 4.24(i) of the Company Disclosure Schedule; and (ii) the land described in Section 4.24(ii) of the Company Disclosure Schedule. -24- 29 SECTION 4.25 Environmental Matters. (a) Company and its subsidiaries have in effect all Permits, registrations, submissions and other authorizations which are required under the Environmental Laws (as defined in Section 4.25(e)) for the ownership, use and operation of each location owned, operated or leased by Company and its subsidiaries (the "Property"); to the knowledge of Company, no appeal nor any other action is pending to revoke or challenge any such Permit, registration, submission or other authorization; and Company and its subsidiaries are in full compliance with all material terms and conditions of all such Permits, registrations, submissions and other authorizations. (b) Company and its subsidiaries are in compliance in all material respects with all Environmental Laws. (c) There is no pending or, to Company's knowledge, threatened, claim, lawsuit, judicial action, administrative proceeding or any other proceeding against Company or any of its subsidiaries under any Environmental Law. Neither Company nor any of its subsidiaries has received written notice from any person or entity, including, but not limited to, a Governmental Entity, alleging that Company or any subsidiary is in violation of any applicable Environmental Law or otherwise may be liable under any applicable Environmental Law, including but not limited to, liability in connection with a Cleanup (as defined in Section 4.25(e)), which violation or liability is unresolved. (d) (i) The Property and all surface water, groundwater and soil on or under the Property is free of any material environmental contamination from Hazardous Substances, (ii) none of the Property contains any underground storage tanks, friable asbestos, equipment using PCBs or underground injection wells, and (iii) none of the Property contains any septic tanks or other on-site waste management system in which process wastewater or any Hazardous Substances have been discharged otherwise than in compliance in all material respects with Environmental Laws. To the knowledge of Company, no action, proceeding, liability or claim exists or is threatened against any site to which Company or any of its subsidiaries has ever sent or transported, or arranged to have sent or transported, any Hazardous Substance, or against Company or any of its subsidiaries with respect to the transportation of Hazardous Substances. Section 4.25(d) of the Company Disclosure Schedule identifies each site to which Company or any of its subsidiaries has transported, or arranged to send or transport, any Hazardous Substance within the past ten (10) years before the date of this Agreement; provided, however, that Company is not required to identify any such site if no applicable Environmental Law requires Company or any of its subsidiaries to maintain a listing of such sites. (e) For purposes of this Agreement, the following terms shall have the following meanings: "Cleanup" means all actions required to: (i) cleanup, remove, treat or remediate Hazardous Substances in the indoor or outdoor environment; (ii) prevent the release of Hazardous Substances so that they do not migrate, endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and -25- 30 investigations and post-remedial monitoring and care; (vi) respond to any government requests for information or documents in any way relating to cleanup, removal, treatment or remediation or potential cleanup, removal, treatment or remediation of Hazardous Substances in the indoor or outdoor environment; or (v) any legal or administrative proceeding related to items (i) through (iv) including, but not limited to, actions brought by third parties to recover costs incurred with respect to Cleanup. "Environmental Laws" means all foreign, federal, provincial, state, county and local laws, regulations, codes, rules, ordinances and other requirements of law relating to pollution or protection of human health, safety or the environment, including, without limitation, laws relating to releases or threatened releases of Hazardous Substances into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, release, transport or handling of Hazardous Substances, and all laws and regulations with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Substances. "Hazardous Substances" means any toxic, radioactive, caustic, or other hazardous substance or waste, including, petroleum, its derivatives, byproducts, and other hydrocarbons, pollutants, contaminants, or any other substance defined as such by, or regulated as such under, any Environmental Law. SECTION 4.26 Offer Documents; Schedule 14D-9. Neither (a) any information supplied by Company in writing for inclusion or incorporation by reference in the Offer Documents, (b) any information to be filed by Company in connection with the Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") (other than any information supplied to Company by Acquiror specifically for inclusion or incorporation by reference therein) nor (c) the Schedule 14D-9 shall, at the respective times the Offer Documents, the Information Statement or the Schedule 14D-9 or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to stockholders of Company, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Information Statement and the Schedule 14D-9 will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation is made by Company with respect to statements made or incorporated by reference therein based on information supplied by any of the Acquiror Companies or any of its subsidiaries specifically for inclusion or incorporation by reference therein. SECTION 4.27 Full Disclosure. None of the Transaction Documents (including the Company Disclosure Schedule) fail to state any material fact that is necessary to make the representations, warranties and information contained herein and therein (in the light of the circumstances under which such representations, warranties and information were made or provided) not false or misleading. -26- 31 ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUIROR COMPANIES Except as set forth on the Disclosure Schedule delivered by the Acquiror Companies to Company concurrently with the execution of this Agreement (the "Acquiror Disclosure Schedule") or as otherwise permitted or contemplated by this Agreement, the Acquiror Companies hereby, jointly and severally, represent and warrant to Company that: SECTION 5.1 Organization and Qualification. Each of the Acquiror Companies is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified and in good standing (with respect to jurisdictions that recognize such concept) to do business in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties makes such qualification necessary, other than where the failure to be so duly qualified and in good standing individually and in the aggregate has not and would not reasonably be expected to have an Acquiror Material Adverse Effect. The term "Acquiror Material Adverse Effect" as used in this Agreement shall mean any change or effect (including prospective changes or effects) that, individually or when taken together with all other changes or effects, is or would reasonably be expected to be materially adverse to the assets, liabilities, financial condition, results of operations or business of Acquiror and its subsidiaries, taken as a whole, provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has or will be an Acquiror Material Adverse Effect: (a) any changes in the trading price or the trading volume for the shares of common stock, without par value, of Acquiror between the date hereof and the Effective Time, (b) the failure by Acquiror to meet internal projections or forecasts or published revenue or earning predictions for any period ending (or for which revenues or earnings are disclosed) on or after the date hereof, (c) any change in the economy or securities markets of the United States or any other country or region in general, (d) any change or effect resulting from the announcement of the transactions contemplated hereby, (e) changes in law or generally accepted accounting principles, which affect generally entities such as Acquiror or Company, (f) any change or effect in the semiconductor or the semiconductor capital equipment industries in general, and not specifically Acquiror or its subsidiaries or (g) any change or effect resulting from compliance by any of the parties hereto with the terms of this Agreement. SECTION 5.2 Charter and Bylaws. Acquiror has heretofore furnished to Company complete and correct copies of the Charter and the Bylaws, in each case as amended or restated to the date hereof, of each of the Acquiror Companies. None of the Acquiror Companies is in violation of any of the provisions of its Charter or Bylaws. SECTION 5.3 Authority. Each of the Acquiror Companies has the requisite corporate power and authority to execute and deliver the Transaction Documents (to the extent a party thereto), to perform its obligations under the Transaction Documents and to consummate the transactions contemplated by the Transaction Documents. The execution and delivery of the -27- 32 Transaction Documents by each of the Acquiror Companies and the consummation by each of the Acquiror Companies (to the extent a party thereto) of the transactions contemplated hereby or thereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of any of the Acquiror Companies or the holders of Acquiror's capital stock are necessary to authorize the Transaction Documents or to consummate the transactions contemplated by the Transaction Documents. The Transaction Documents have been duly executed and delivered by each of the Acquiror Companies (to the extent a party thereto) and, assuming the due authorization, execution and delivery thereof by Company, constitute the legal, valid and binding obligation of each of the Acquiror Companies (to the extent a party thereto) enforceable against the applicable Acquiror Company in accordance with their respective terms, except as enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium and similar laws, both state and federal, affecting the enforcement of creditors' rights or remedies in general as from time to time in effect or (ii) the exercise by courts of equity powers. SECTION 5.4 No Conflict; Required Filings and Consents. (a) The execution and delivery of the Transaction Documents by each of the Acquiror Companies does not, and the consummation of the transactions contemplated by the Transaction Documents will not, (i) conflict with or violate the Articles of Incorporation or Bylaws, or the equivalent organizational documents, in each case as amended or restated, of Acquiror or Merger Sub, (ii) conflict with or violate in any material respect any material Laws applicable to Acquiror or any of Acquiror's subsidiaries or by or to which any of their properties is bound or subject or (iii) result in any breach of or constitute a default (or an event that with or without notice or lapse of time or both would become a default) in any material respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, or require payment under, or result in the creation of a lien or encumbrance on any of the properties or assets of Acquiror or any of Acquiror's subsidiaries pursuant to, any material Contract to which Acquiror or any of Acquiror's subsidiaries is a party or by or to which Acquiror or any of Acquiror's subsidiaries or any of their respective properties is bound or subject. (b) The execution and delivery of the Transaction Documents by each of the Acquiror Companies does not, and the performance of the Transaction Documents by each of the Acquiror Companies will not, require any of the Acquiror Companies to obtain any consent, license, permit, waiver approval, authorization or order of, or to make any filing with or notification to, any Governmental Entities or other person or entity, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws and the HSR Act and the filing and recordation of appropriate merger documents as required by the DGCL, and (ii) for such consents, licenses, permits, waivers, approvals, authorizations, orders, filings or notifications, the failure of which to be made or obtained will not have individually or in the aggregate an Acquiror Material Adverse Effect or impair or delay the transactions contemplated by the Transaction Documents. -28- 33 SECTION 5.5 SEC Reports; Financial Statements. (a) Since December 31, 1998, Acquiror has filed on a timely basis all forms, reports, statements, schedules and other documents required to be filed with the SEC (collectively referred to as the "Acquiror SEC Reports"). As of the time each of the Acquiror SEC Reports was filed with the SEC (or, if amended or superseded by a later filed Acquiror SEC Report, then on the date of such filing), the Acquiror SEC Reports (i) complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder and (ii) did not (except with respect to the subject matter of any exhibit thereto, as to which no representation is made) (A) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or (B) omit to state a material fact that is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The consolidated financial statements of Acquiror contained in the Acquiror SEC Reports (i) complied in all material respects, as of the time of their filing with the SEC (or, if amended or superceded by a later filed Acquiror SEC Report, then on the date of such filing), with the published rules and regulations of the SEC, (ii) were prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis throughout the periods involved (except (A) to the extent required by changes in generally accepted accounting principles, and (B) as may be indicated in the notes thereto) and (iii) fairly present in all material respects the consolidated financial position of Acquiror and its subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows for the periods indicated (subject, in the case of unaudited consolidated financial statements, to normal year-end audit adjustments), except that any pro forma financial statements contained in such consolidated financial statements are not necessarily indicative of the consolidated financial position of Acquiror and its subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows for the periods indicated. SECTION 5.6 Brokers. No broker, finder or investment banker (other than Merrill Lynch, Pierce, Fenner & Smith Incorporated) is entitled to any brokerage, finder's, financial advisors or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Acquiror. SECTION 5.7 Merger Sub. Merger Sub was formed solely for the purposes of entering into the transactions contemplated by this Agreement, and, between the date of its formation and the date of this Agreement, Merger Sub has not conducted any business or made any investments other than in connection therewith. SECTION 5.8 Offer Documents; Schedule 14D-9. Neither (a) the Offer Documents, (b) any information supplied by Acquiror or Merger Sub in writing for inclusion or incorporation by reference in the Information Statement nor (c) any information supplied by Acquiror or Merger Sub in writing for inclusion in the Schedule 14D-9 shall, at the respective times the Offer Documents, the Information Statement or the Schedule 14D-9 or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to -29- 34 stockholders of Company, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Offer Documents, the Information Statement and the Schedule 14D-9 will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by Acquiror or Merger Sub with respect to statements made or incorporated by reference therein based on information supplied by Company specifically for inclusion or incorporation by reference therein. ARTICLE VI COVENANTS SECTION 6.1 Affirmative Covenants of Company. Company hereby covenants and agrees that, during the period from the date of this Agreement to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, unless otherwise expressly contemplated by this Agreement or consented to in writing by Acquiror, Company will and will cause its subsidiaries to: (a) carry on their respective businesses solely in the ordinary course consistent with past practice and in compliance in all material respects with all applicable Laws, Permits and Contracts (including, without limitation, those identified in the Company Disclosure Schedule); (b) use reasonable efforts to preserve intact their current business organizations (other than internal organizational realignments), keep available the services of their current officers and other key employees and preserve their relationships with customers, suppliers, licensors, lessors, distributors and others having business dealings with them; (c) promptly advise Acquiror in writing of any written threat or any commencement against it of any dispute, claim, action, suit, proceeding, arbitration or investigation by, against or, to its knowledge, affecting it which could reasonably be expected to result in a Company Material Adverse Effect, or which challenges or may affect the validity of any Transaction Document, or any action taken or to be taken in connection with any Transaction Document or the ability of Company to consummate the transactions contemplated herein or therein; (d) promptly advise Acquiror in writing of the receipt or notice of the termination of (i) any Significant Contract, or (ii) if such termination could reasonably be expected to result in a Company Material Adverse Effect, any other Contract or document that is required to be disclosed in the Company Disclosure Schedule; (e) promptly advise Acquiror in writing of the occurrence or non-occurrence of any event or the existence or non-existence of any fact which (i) makes untrue any material representation or warranty of Company set forth in any Transaction Document, unless -30- 35 such event or existence or non-existence of fact could not reasonably be expected to result in a Company Material Adverse Effect or (ii) resulted in, or could reasonably be expected to result in, any Offer Condition, or any condition to the Merger set forth in Article VIII not being satisfied unless such event or existence or non-existence of fact could not reasonably be expected to result in a Company Material Adverse Effect; and (f) promptly advise Acquiror of any material breach of any covenant, condition or obligation of Company contained in any Transaction Document. SECTION 6.2 Negative Covenants of Company. Except as set forth in Section 6.2 of the Company Disclosure Schedule or as expressly contemplated by this Agreement or otherwise consented to in writing by Acquiror, during the period from the date of this Agreement to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, Company will not do, and will not permit any of its subsidiaries or authorize any of its officers, directors, employees, agents, attorneys, accountants, financial or other advisors, investment bankers or other representatives (collectively, the "Representatives") (where applicable) to do, and will use its reasonable best efforts not to allow any Representative to do, any of the following: (a) (i) increase the compensation payable to or to become payable to any member of the Board of Directors of Company or executive officer (which, for purposes of clarity, the parties acknowledge and agree shall mean Company's President, Chief Executive Officer, Senior Vice Presidents, Vice Presidents, Secretary and Treasurer) (except increases required pursuant to agreements disclosed on the Company Disclosure Schedule); (ii) pay bonuses to any member of the Board of Directors of Company or executive officer in excess of $1,000,000 in the aggregate for all directors and executive officers; (iii) pay bonuses (which for purposes of clarity, the parties acknowledge and agree does not include sales commissions payable in the ordinary course of business consistent with past practice) to any other employee of Company in excess of $25,000 in the aggregate for any individual employee or up to $500,000 in the aggregate for all employees (other than, in each case, payments required pursuant to agreements disclosed on the Company Disclosure Schedule); (iv) grant any severance or termination pay (other than pursuant to Company's or its subsidiaries' ordinary course severance practices or Contracts disclosed on the Company Disclosure Schedule) (provided that to the extent such payments are made for the release of potential employment related legal claims, such payments shall be considered to be made pursuant to Section 6.2(g) and not this Section 6.2(a)(iv)) to, or enter into or amend any employment or severance agreement with, any member of the Board of Directors of Company, officer or employee; (v) establish, adopt or enter into any Benefit Plan (other than ordinary course renewals of Benefit Plans) or (vi) except as may be required by applicable Law and except as set forth in Section 7.9 and for actions that are not inconsistent with the provisions of Section 7.9 of this Agreement, amend, or take any other actions (including, without limitation, the discretionary acceleration of vesting, waiving of performance criteria or the adjustment of awards or any other actions permitted upon a "change in control" or a "corporate transaction" (each as defined in the respective plans) of Company or a filing under Section 13(d) or 14(d) of the Exchange Act with respect to Company) with respect to any Stock Award, any of the Benefit Plans or any of the plans, programs, agreements, policies or other arrangements described in Section 4.14 of this Agreement; -31- 36 (b) declare or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock or other equity interests, except for dividends by a subsidiary of Company to Company or a wholly owned subsidiary of Company; (c) (i) redeem, purchase or otherwise acquire any shares of its or any of its subsidiaries' capital stock or any securities or obligations convertible into or exchangeable for any shares of its or its subsidiaries' capital stock, or any options, warrants or conversion or other rights to acquire any shares of its or such subsidiaries' capital stock or any such securities or obligations (except in connection with the exercise of outstanding Stock Awards in accordance with their terms or in connection with a repurchase of shares of a subsidiary's capital stock from an employee upon such employee terminating his/her employment with Company or any of its subsidiaries, but only to the extent all such repurchases do not exceed $10,000 in the aggregate); (ii) effect any reorganization or recapitalization or (iii) split, combine or reclassify any of its or any of its subsidiaries' capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its or its subsidiaries' capital stock; provided, however, that subclause (i) - (iii) above shall not apply to any of Company's wholly-owned subsidiaries. (d) (i) except as set forth in Section 4.3(a) of this Agreement, issue (whether upon original issue or out of treasury), sell, grant, award or deliver, or propose the issuance, sale, grant, award or delivery (including the grant with respect thereto of any security interests, liens, pledges, limitations in voting rights, charges or other encumbrances) of any shares of any class of its or its subsidiaries' capital stock, any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire, any such shares (except for (A) the issuance of shares upon the exercise, in accordance with their terms, of outstanding Stock Awards or (B) securities issued pursuant to the Rights Agreement); or (ii) amend or otherwise modify the terms of any such rights or warrants the effect of which shall be to make such terms more favorable to the holders thereof; (e) acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets of any other person or entity (other than the purchase of assets from suppliers or vendors in the ordinary course of business and consistent with past practice and other than the merger of any wholly-owned subsidiary of Company with and into any other wholly-owned subsidiary of Company or Company); (f) sell, lease, exchange, mortgage, pledge, transfer, assign, convey or otherwise dispose of, any of its material assets or any material assets of any of its subsidiaries, except for dispositions of inventories and of assets in the ordinary course of business and consistent with past practice and for sale/leaseback transactions entered into by Company or any of its subsidiaries where the aggregate value of the assets sold and leased back does not exceed $1,500,000 in the aggregate. (g) release any third party from its obligations under any existing standstill agreement or any confidentiality, non-competition or other similar agreement or settle, -32- 37 or compromise any claims or litigation (except where the amount of such settlements, individually or in the aggregate and including any settlements effected in accordance with subsection (i) below, does not exceed $1,500,000), or, other than in the ordinary course of business, otherwise waive, release, or assign any material rights or claims; (h) adopt any amendments to its Certificate of Incorporation or its Bylaws; (i) (A) change any of its accounting methods, principles or practices in effect at December 31, 1999 or (B) make or rescind any Tax election, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes (except where the amount of such settlements or compromises, individually or in the aggregate, does not exceed $300,000), or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ending December 31, 1999, except, in the case of clause (A) or clause (B), as may be required by Law or generally accepted accounting principles; (j) permit to exist as of the Scheduled Expiration Date (or, if the Offer is extended as permitted by this Agreement, as of any Extended Expiration Date) any obligation for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument or under any financing lease, or pursuant to a sale-and-leaseback transaction or otherwise in excess of the aggregate of (i) $12,250,000 plus (ii) an amount of up to $2,500,000 for capital expenditures made as permitted by Section 6.2(o), respecting which payments have not yet been made, plus (iii) an amount of up to $1,900,000 for capital expenditures made as permitted by Section 6.2(o), to the extent committed to in writing before the date of this Agreement, plus (iv) an amount of up to $1,500,000 for bonuses paid pursuant to Sections 6.2(a)(ii) and (iii), plus (v) amounts paid in settlement of disputes as permitted in Sections 6.2(g) and 6.2(i)(B), plus (vi) amounts paid by Company pursuant to Section 9.5(a), plus (vii) amounts paid by Company as permitted by Section 7.9(g) less (viii) amounts received by Company upon the issuance of shares as permitted by Section 6.2(d), in each case to the extent actually paid or received by Company after the date hereof. (k) incur or repay any liability or obligation (whether absolute or contingent) to any affiliated person or entity (other than Company or any of its wholly-owned subsidiaries or other than in accordance with the terms of Contracts existing on the date of this Agreement) or incur any material lien, claim or encumbrance, other than in the ordinary course of business consistent with past practice; (l) write-down or write-off the value of any material asset except for write-downs and write-offs of accounts receivable and inventory in the ordinary course of business consistent with past practice; (m) purchase any derivative securities except for purchases to hedge interest rate and currency exposure in the ordinary course of business; -33- 38 (n) except in connection with taking any action contemplated under this Section 6.2 or as otherwise permitted by this Agreement, enter into, amend, modify or terminate any Contract which (i) requires annual payments by Company in excess of $150,000, (ii) is or would be deemed a "material contract" under Item 601(b)(10) of SEC Regulation S-K (without reference to Item 601(b)(10)(iii)(B)), or (iii) grants any exclusive distribution rights or any exclusive license of any of Company's Intellectual Property to any third person or entity; (o) make or agree to make any additional capital expenditures aggregating more than $2,500,000 in addition to the $1,900,000 which has been committed to in writing but not paid for as of the date hereof; or (p) authorize or agree to do any of the foregoing. SECTION 6.3 Affirmative Covenants of Acquiror. Acquiror hereby covenants and agrees that, during the period from the date of this Agreement to the Effective Time, unless otherwise expressly contemplated by this Agreement or consented to in writing by Company, Acquiror will: (a) promptly advise Company in writing of any written threat or any commencement against it of any dispute, claim, action, suit, proceeding, arbitration or investigation by, against or, to its knowledge, affecting it which challenges or may affect the validity of any Transaction Document, or any action taken or to be taken in connection with any Transaction Document or the ability of Acquiror to consummate the transactions contemplated herein or therein; (b) promptly advise Company in writing of the occurrence or non-occurrence of any event or the existence or non-existence of any fact which makes untrue, or will make untrue any material representation or warranty of Acquiror set forth in any Transaction Document; and (c) promptly advise Company of any material breach of any covenant, condition or obligation of Acquiror contained in any Transaction Document. SECTION 6.4 Negative Covenants of Acquiror. (a) Except pursuant to the Offer and the Merger or as otherwise consented to in writing by Company, during the period from the date of this Agreement to the purchase by Merger Sub of a majority of the shares of Company Common Stock pursuant to the Offer, Acquiror will not, and will not permit any of its subsidiaries or authorize any of its officers, directors, employees, agents, attorneys, accountants, financial or other advisors, investment bankers or other representatives (collectively, the "Acquiror Representatives") (where applicable) to, and will use its reasonable best efforts not to allow any Acquiror Representative to, prior to the termination (by early termination or otherwise) of the waiting period under the HSR Act in connection with the Offer and the Merger, acquire, merge or consolidate with, or purchase an equity interest in or a portion of the assets of, or otherwise take any action with or with respect to (including by agreeing to take any such action), any business or any corporation, partnership, association or other business organization or division thereof in -34- 39 the semiconductor test interface equipment industry (including any such entity that manufactures, distributes or sells probe cards, test sockets, ATE interfaces or ATE testboards), if such action or agreement to take any such action would require Acquiror to make a filing under the HSR Act with respect thereto. (b) Except as expressly contemplated by this Agreement or otherwise consented to in writing by Company, during the period from the date of this Agreement to the purchase by Merger Sub of a majority of the shares of Company Common Stock pursuant to the Offer, Acquiror will not, and will not permit any of its subsidiaries or authorize any of the Acquiror Representatives (where applicable) to, and will use its reasonable best efforts not to allow any Acquiror Representative to, enter into any acquisition, merger, consolidation, purchase or sale of assets, reorganization, recapitalization or other extraordinary corporate transaction or series of transactions, or redeem, purchase or otherwise acquire its or any of its subsidiaries' securities, or declare or pay any dividend on, or make any distribution with respect to, outstanding shares of capital stock or equity interests of Acquiror or any of its subsidiaries or otherwise take any action, in each case that results in Acquiror having less than $250,000,000 in funds available (whether by cash on hand or financings or other indebtedness) as of the Scheduled Expiration Date (or, if the Offer is extended as permitted by this Agreement, on the Extended Expiration Date), other than a transfer of funds by Acquiror to Merger Sub in an amount sufficient to, and in contemplation of, the consummation of the Offer. SECTION 6.5 Access and Information. (a) Company shall, and shall cause its subsidiaries to (i) afford to Acquiror and the Acquiror Representatives reasonable access at reasonable times, upon reasonable prior notice, to the officers, employees, accountants, agents, properties, offices and other facilities of Company and its subsidiaries and to the books, records, Tax Returns and other documents thereof (including, at the request of Acquiror, copies thereof) and (ii) furnish promptly to Acquiror and the Acquiror Representatives such information concerning the business, properties, Contracts, records and personnel of Company and its subsidiaries (including, without limitation, financial, operating and other data and information and any notice, report or other document filed with or supplied to any Governmental Entity in connection with the Merger or any of the other transactions contemplated by this Agreement) as may be reasonably requested, from time to time, by Acquiror. (b) During the period from the date of this Agreement to the Effective Time, Acquiror shall, and shall cause its subsidiaries to, furnish promptly to Company and the Representatives such information concerning the business, properties and records of Acquiror and its subsidiaries (including, without limitation, financial, operating and other data and information and any notice, report or other document filed with or supplied to any Governmental Entity in connection with the Merger or any of the other transactions contemplated by this Agreement (other than any such notice, report or other document the subject of which is a third party other than Company)) as may be reasonably requested, from time to time, by Company. (c) Notwithstanding the foregoing provisions of this Section 6.5, neither party hereto shall be required to grant access or furnish information to the requesting -35- 40 party or any of its representatives to the extent that such access or the furnishing of such information is prohibited by law. (d) If this Agreement is terminated, each party shall, upon the request of the other party hereto, redeliver to such party all nonpublic written material provided pursuant to this Section 6.5 and shall not retain any copies, extracts or other reproductions of such written material. In such event, all documents, memoranda, notes and other writings (including all electronic versions thereof) prepared by the redelivering party based on the information in such material shall be destroyed (and the redelivering party shall use reasonable efforts to cause its representatives to similarly destroy the documents, memoranda and notes). ARTICLE VII ADDITIONAL AGREEMENTS SECTION 7.1 Meeting of Stockholders. (a) If the approval by Company's stockholders of this Agreement and the Merger (the "Stockholder Approval") is required by Law, Company shall, as promptly as reasonably practicable after the expiration of the Offer in accordance with the terms of Section 1.1, take all actions necessary in accordance with the DGCL and its Certificate of Incorporation and Bylaws to convene a special meeting of Company's stockholders to act on this Agreement (the "Company Stockholders Meeting"). Company shall solicit from its stockholders proxies in favor of the approval and adoption of this Agreement. At the time of the Company Stockholders Meeting, Acquiror and Merger Sub shall cause all shares of Company Common Stock then owned beneficially or of record by them to be voted in favor of approval and adoption of this Agreement and the transactions contemplated hereby. Subject to the fiduciary duties of the Board of Directors at Company under applicable Law, the Company Proxy Statement shall include a statement to the effect that the Board of Directors of Company recommends that Company's stockholders vote to approve this Agreement and the Merger at the Company Stockholders Meeting (the recommendation of the Board of Directors of Company that Company's stockholders vote to approve this Agreement being referred to as the "Merger Recommendation"). (b) Notwithstanding the foregoing, if Merger Sub shall acquire 90% or more of the then outstanding shares of Company Common Stock, the parties shall take all necessary and appropriate actions to cause the Merger, pursuant to the terms thereof, to become effective as promptly as practicable after such acquisition without a meeting of the stockholders of Company and otherwise in accordance with Section 253 of the DGCL (including, without limitation adoption by the board of directors of Merger Sub of a short-form plan of merger in accordance with the DGCL and consistent with the terms of the Merger). -36- 41 SECTION 7.2 Proxy Statement. (a) If the Stockholder Approval is required by applicable Law, as promptly as practicable after the expiration of the Offer in accordance with the terms of Section 1.1, Company and the Acquiror Companies shall prepare, and Company shall file with the SEC a proxy statement (together with any amendments thereof or supplements thereto, the "Company Proxy Statement") to be distributed to the stockholders of Company, along with a form of proxy in connection with the vote of Company's stockholders with respect to this Agreement and the Merger. Each of the Acquiror Companies and Company will use all reasonable best efforts to have or cause the Company Proxy Statement to be cleared by the SEC as promptly as practicable after such filing. The Acquiror Companies shall furnish all information concerning it and the holders of its capital stock as Company may reasonably request in connection with such actions. As promptly as practicable after the Company Proxy Statement may first be mailed to the stockholders of Company in compliance with the Exchange Act and other applicable Law, Company shall use reasonable efforts to cause the Company Proxy Statement to be mailed to its stockholders entitled to notice of and to vote at the Company Stockholder Meeting. (b) If, at any time before the Effective Time, any event or circumstance relating to Company, the Acquiror Companies, or any of their respective affiliates, officers or directors, should be discovered by any party hereto that should be set forth in an amendment or a supplement to the Company Proxy Statement, so that such document will not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly prepared by the parties, filed with the SEC and, to the extent required by Law, disseminated to Company's stockholders. (c) Each party hereto shall immediately notify the other parties hereto of (i) the receipt of any comments from the SEC relating to the Company Proxy Statement, (ii) any request by the SEC for any amendment or supplement to the Company Proxy Statement or for additional information, and (iii) the clearance of the Company Proxy Statement. Except as provided for in Article I, each party hereto shall consult with the other parties hereto with respect to, and prior to, all filings with the SEC, including the Company Proxy Statement and any amendment or supplement thereto, and all mailings to Company's stockholders in connection with the Merger, including the Company Proxy Statement. No filing of the Company Proxy Statement or any amendment or supplement thereto shall be made by any party hereto without the consent of the other parties hereto (such consent not to be unreasonably withheld). SECTION 7.3 Appropriate Action; Consents; Filings. (a) Company and Acquiror shall each use, and shall cause each of their respective subsidiaries to use, all reasonable best efforts promptly to (i) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement (including, without limitation, upon the request of Acquiror at -37- 42 any time after the purchase by Merger Sub of a majority of the shares of Company Common Stock pursuant to the Offer, the transfer to any designee of Acquiror of any equity interest in any subsidiary of Company set forth on Section 4.1 of the Company Disclosure Schedule that is held beneficially or of record by a party other than Company or any of its subsidiaries), (ii) obtain from any Governmental Entities any consents, Permits, waivers, approvals, authorizations or orders required to be obtained by Acquiror or Company or any of their subsidiaries in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, the Offer and the Merger, (iii) obtain, prior to the Effective Time, all other necessary consents, approvals or waivers from third parties, (iv) defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Transaction Documents or the consummation of the transactions contemplated hereby or thereby, including seeking to vacate or reverse any stay or other order entered by any court or other Governmental Entity restraining or otherwise affecting the transactions contemplated hereby or thereby, and (v) make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement, the Offer and the Merger required under (A) the Securities Act and the Exchange Act and the rules and regulations thereunder, and any other applicable federal or state securities laws, (B) the HSR Act, and (C) any other applicable Law; provided that Acquiror and Company shall assist and cooperate with each other in connection with the making of all such filings. Subject to Article I and Section 6.5, upon request, either party hereto shall provide copies of all such documents to the other party hereto (and its advisors) prior to filing and, if requested, shall accept all reasonable additions, deletions or changes suggested in connection therewith from such other party. Company and Acquiror shall furnish to each other all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Law (including all information required to be included in the Offer Documents, the Information Statement, the Schedule 14D-9 and the Company Proxy Statement) in connection with the transactions contemplated by this Agreement, including, without limitation, the Offer and the Merger. (b) If any party shall fail to obtain any third party consent described in subsection (a)(iii) above prior to the Effective Time, such party shall use all reasonable best efforts, and shall take any such actions reasonably requested by the other parties, to limit the adverse effect upon Company and Acquiror, their respective subsidiaries, and their respective businesses resulting, or which could reasonably be expected to result after the Effective Time, from the failure to obtain such consent. SECTION 7.4 Public Announcements. To the extent practicable, Acquiror and Company shall consult with each other before issuing any press release or otherwise making any public statement with respect to the Transaction Documents, the transactions contemplated thereby or the Offer or the Merger, and neither party shall issue any such press release or make any such public statement prior to such consultation; provided however, that if either party reasonably determines that it is required by applicable Law, court process or any national securities exchange or national quotation system to issue such a press release or make such a statement without (or notwithstanding) such consultation with the other party hereto, then such party shall be entitled to issue such press release or make such statement. The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in the form heretofore agreed to by the parties. -38- 43 SECTION 7.5 NASDAQ Listing. Company shall use all reasonable efforts to delist the Company Common Stock from NASDAQ, provided that such delisting shall not be effective until the Effective Time. SECTION 7.6 State Takeover Statutes. Company will take all steps necessary to exempt the transactions contemplated by any of the Transaction Documents from or make them not subject to any applicable state takeover statute or similar law or regulation in any jurisdiction in which the Company is, or is required to be, qualified to do business, or incorporated, including, without limitation, the DGCL. SECTION 7.7 Merger Sub. Prior to the Effective Time, Merger Sub shall not conduct any business or make any investments other than as expressly set forth in this Agreement and will not have any assets (other than a de minimis amount of cash contributed by Acquiror to Merger Sub in connection with the initial issuance of Merger Sub stock to Acquiror and other than the funds necessary to consummate the Offer and the Merger). SECTION 7.8 Indemnification and Insurance. (a) Company shall indemnify and hold harmless Acquiror and its directors and officers and Acquiror shall indemnify and hold harmless Company and its directors and officers, from and against any loss, claim, damage, cost, liability, obligation or expense (including reasonable attorney's fees and costs of investigation) to which any indemnified party may become subject under the Exchange Act or otherwise, insofar as such loss, claim, damage, cost, liability, obligation or expense or actions in respect thereof arises out or is based upon any untrue statement or alleged untrue statement of a material fact relating to, and supplied by, such indemnifying party and contained in the Offer Documents, the Information Statement, the Schedule 14D-9 or the Company Proxy Statement or arises out of or is based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein with respect to such indemnifying party not misleading. (b) (i) Until six years from the Effective Time, Acquiror shall not permit the Certificate of Incorporation and Bylaws of the Surviving Corporation to be amended to reduce or limit the rights of indemnity afforded in such Certificate of Incorporation and Bylaws to the present and former directors and officers (the "Indemnified Persons") of Company or to reduce or limit the ability of the Surviving Corporation to indemnify such persons, or to hinder, delay or make more difficult the exercise of such rights of indemnity or the ability to indemnify. If, within six years from the Effective Time, the Surviving Corporation is merged with or into Acquiror or another subsidiary of Acquiror, the Certificate of Incorporation and Bylaws of Acquiror or such subsidiary shall, for at least the six year period following the Effective Time, provide rights to indemnification for the Indemnified Persons at least equivalent to those in the Certificate of Incorporation and Bylaws of the Surviving Corporation. From and after the Effective Time, Acquiror shall cause the Surviving Corporation (or its successors) (A) to exercise the powers granted to it by its Certificate of Incorporation, its Bylaws and by applicable law, as in effect on the date hereof, to indemnify to the fullest extent possible present and former directors and officers of Company against claims made against them arising from their service in such capacities and (B) to fulfill and honor in all respects the obligations of -39- 44 Company pursuant to each agreement that provides for indemnification and is in effect between Company and the Indemnified Persons at the Effective Time that has been set forth on the Company Disclosure Schedules. (ii) Should any claim or claims be made against any present or former director or officer of Company, arising from his services as such, within six years of the Effective Time, the provisions of this Section 7.8(b) respecting the Certificate of Incorporation and Bylaws of the Surviving Corporation shall continue in effect until the final disposition of all such claims. In the event that after the Effective Time, the Surviving Corporation or any of its successors or assigns (A) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (B) transfers or conveys all or substantially all of its properties and assets to any person then, and in each such case, proper provision will be made so that the successors and assigns of the Surviving Corporation assume the obligations set forth in this Section 7.8, including by providing rights to indemnification in their certificates of incorporation, bylaws, or other organizational documents at least equivalent to those in the Certificate of Incorporation and Bylaws of the Surviving Corporation. Notwithstanding anything to the contrary in this Section 7.8, neither Acquiror nor the Surviving Corporation shall be liable for any settlement effected without its written consent, which shall not be unreasonably withheld. (iii) The provisions of this Section 7.8(b) are intended to be for the benefit of, and shall be enforceable by, each party entitled to indemnification hereunder, his heirs and his representatives and are in addition to and not in substitution for, any other rights to indemnification or contribution that such person may have by contract or otherwise. (c) Until six years from the Effective Time, the Surviving Corporation shall maintain in effect, for the benefit of the Indemnified Persons with respect to acts or omissions occurring prior to the Effective Time, directors' and officers' liability insurance which is substantially similar in coverage to that maintained by Company as of the date of this Agreement in the form disclosed by Company to Acquiror prior to the date of this Agreement (the "Existing Policy"); provided, however, that the Surviving Corporation shall not be required to pay or cause to be paid annual premiums for the Existing Policy (or for any substitute policies) in excess of 150% of the last annual premium paid by Company prior to the date hereof. In the event any future annual premiums for the Existing Policy (or any substitute policies) exceed 150% of the last annual premium paid by Company prior to the date hereof, the Surviving Corporation shall be entitled to reduce the amount of coverage of the Existing Policy (or any substitute policies) to the amount of coverage that can be obtained for a premium equal to 150% of the last annual premium paid by Company prior to the date hereof. SECTION 7.9 Treatment of Stock Options; Employee Matters. (a) Prior to the Effective Time, Acquiror and Company shall take all such actions as may be necessary to cause each unexpired and unexercised option of Company in effect on the date thereof which has been granted to current or former directors, officers employees or consultants of Company by Company (each, a "Company Option") to be cancelled and converted solely into the right to receive at the Effective Time (whether or not then vested or -40- 45 exercisable) an amount in cash equal to the product of (A) the number of shares of Common Stock subject to such Company Option and (B) the excess, if any, of the Merger Consideration over the exercise price per share subject or related to such Company Option. (b) Prior to, and conditioned upon, the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, Company shall take all such actions as may be necessary to provide that the Company ESPP shall terminate on the last day of the latest Offering (as defined in the Company ESPP) that commenced prior to the date hereof. If the Effective Time occurs on or prior to December 31, 2000, each option to purchase Company Common Stock that is outstanding under the Company ESPP (each, an "ESPP Option") shall automatically be assumed and converted at the Effective Time into the right to receive (on the applicable Offering Termination Date (as defined in the Company ESPP)) (each, an " Acquiror ESPP Option") $20.00 in cash for each share of Company Common Stock covered by such ESPP Option. If the ESPP Options are assumed and converted into Acquiror ESPP Options, as contemplated by the previous sentence, then the exercise price of each Acquiror ESPP Option shall be 85% of the closing price of a share of Company Common Stock as reported on the Nasdaq National Market, Inc. ("NASDAQ") on July 1, 2000, and the other terms and conditions of each Acquiror ESPP Option shall be the same as the terms and conditions of such ESPP Option immediately prior to the Effective Time. (c) Company shall take (on terms and conditions satisfactory to Acquiror) all such actions as may be necessary to amend its 401(k) plans prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer in order to exclude Acquiror and its subsidiaries as participating employers in Company's 401(k) Plans. (d) To the extent that any employee of Company or any of Company's subsidiaries becomes eligible to participate in any employee benefit plan of Acquiror after the Effective Time, Acquiror, the Surviving Corporation and their subsidiaries shall credit such employee's service with Company or its subsidiaries, to the same extent as such service was credited under the similar employee benefit plans of Company and its subsidiaries immediately prior to the Effective Time, for purposes of determining eligibility to participate in and vesting under, and for purposes of calculating the benefits under, such employee benefit plan of Acquiror. To the extent permitted by such employee benefit plan of Acquiror and applicable law, Acquiror, the Surviving Corporation and its subsidiaries shall waive any pre-existing condition limitations, waiting periods or similar limitations under such employee benefit plan of Acquiror and shall provide each such employee with credit for any co-payments previously made and any deductibles previously satisfied. (e) Within ten (10) business days after execution and delivery of this Agreement, Company shall deliver to Acquiror complete and correct copies of the Option Plans, all forms of Stock Awards issued pursuant to the Option Plans or otherwise, and all agreements pursuant to which any warrants have been or may be issued, including all amendments thereto. (f) Prior to the consummation of the Offer, bonuses in an amount up to the bonus amounts permitted pursuant to Section 6.2(a)(ii) and Section 6.2(a)(iii) may be paid as provided therein. -41- 46 (g) Prior to the consummation of the Offer, Company shall make the payments identified in Schedule 4.15, Item 2, of the Company Disclosure Schedule. SECTION 7.10 No Solicitation. (a) Company will not, and will not permit any of its subsidiaries or authorize any of the Representatives to, and will use its reasonable best efforts not to allow any Representative to, (i) solicit or knowingly encourage (including by way of furnishing non-public information or assistance), or take any other action to knowingly facilitate or induce, any inquiries or the making of any proposal that constitutes, or that may reasonably be expected to lead to, any Competing Transaction, or (ii) enter into discussions or negotiate with any person or entity in furtherance of any inquiries in order to obtain a Competing Transaction, or (iii) agree to, or endorse, any Competing Transaction. Company shall promptly notify Acquiror of all material terms of any such inquiries or proposals received by Company or, to the knowledge of Company, received by any Representative relating to any Competing Transaction and if such inquiry or proposal is in writing, Company shall promptly deliver or cause to be delivered to Acquiror a copy of such inquiry or proposal. Notwithstanding the foregoing, nothing contained in this Section 7.10 shall prohibit the Company or its Representatives from (A) at any time prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer (1) furnishing information to any persons in connection with an unsolicited bona fide proposal in writing by such person relating to a Competing Transaction or (2) entering into negotiations or discussions with any person in connection with an unsolicited bona fide proposal in writing by such person relating to a Competing Transaction; provided, however, that Company or its Representatives may only take the actions set forth in clauses (1) and (2) above if, and only to the extent that (x) Company provides Acquiror with at least 24 hours prior notice of any meeting of the Board of Directors of Company at which the Board of Directors of Company will consider such offer, (y) the Board of Directors of Company, after duly considering the advice of outside legal counsel to Company, determines in good faith that the failure to do so would be reasonably likely to constitute a breach of its fiduciary duties to stockholders imposed by applicable Law, and (z) prior to, or concurrently with, furnishing any information to such person, Company furnishes such information to Acquiror (to the extent not previously furnished); or (B) complying with Rule 14d-9 or 14e-2 promulgated under the Exchange Act with regard to a Competing Transaction; or (C) furnishing a copy of this Section 7.10 to any person or entity making an unsolicited bona fide proposal in writing related to a Competing Transaction. In addition, notwithstanding the foregoing, nothing contained in this Section 7.10 shall prohibit Company from making any disclosure to Company's stockholders if, in the good faith judgment of the Board of Directors of Company, after duly considering the advice of outside legal counsel to Company, failure to make such disclosure would be reasonably likely to constitute a breach of its fiduciary duties to stockholders imposed by applicable Law. For purposes of this Agreement, "Competing Transaction" shall mean (aa) any merger, consolidation, share exchange, business combination or similar transaction involving Company or any of its subsidiaries, whereby the holders of the outstanding voting power of Company prior to such transaction fail to hold 80% of the outstanding voting power of Company and (indirectly through Company and its other subsidiaries) all of its subsidiaries immediately after such transaction, (bb) the acquisition in any manner, directly or indirectly, of more than a 20% interest in any voting securities of Company, (cc) any tender offer or exchange offer that if consummated would result in the acquisition of -42- 47 20% or more of any class of equity securities of Company or (dd) the acquisition, directly or indirectly, of a material amount of assets of Company, other than the transactions contemplated or permitted by this Agreement and other than sales of current assets in the ordinary course of business. (b) Except as expressly permitted by this Section 7.10(b), neither the Board of Directors of Company, nor any committee thereof, may (i) withdraw or modify, or propose publicly to withdraw or modify, in any manner adverse to Acquiror, the Offer Recommendation (it being understood that any such modification is not adverse if a majority of the directors on the Board of Directors of Company continue to favorably recommend the Offer and the Merger), (ii) approve or recommend, or propose publicly to approve or recommend, any Competing Transaction, or (iii) cause Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Competing Transaction (other than agreements relating solely to non-disclosure or "standstill" provisions); provided, however, that, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, the Board of Directors of Company may take the actions set forth in clauses (i) through (iii) if, and only to the extent that (A) Company receives an unsolicited bona fide proposal in writing by any person relating to a Competing Transaction, (B) the Board of Directors of Company, after duly considering the advice of outside legal counsel to Company, determines in good faith that the failure to do so would be reasonably likely to constitute a breach of its fiduciary duties to stockholders imposed by applicable Law, (C) Company notifies Acquiror in writing that it intends to take such action, (D) in the event that Company proposes to enter into an agreement with respect to such Competing Transaction, Company attaches the most current version of such agreement to such notice, (E) Acquiror does not make, within 48 hours of receipt of Company's written notification of its intention to take such action, a written offer that is at least as favorable, from a financial point of view (after considering all of the terms of such Competing Transaction) to the stockholders of Company as such Competing Transaction, as determined in good faith by the Board of Directors of Company after duly considering the advice of Company's investment bankers, (F) Company is not in material breach of Section 7.10(a), and (G) Company terminates this Agreement pursuant to Section 9.1(i) and, prior to or simultaneously with such termination, has paid or pays to Acquiror the Company Termination Fee (as defined in Section 9.5(c)). In addition to the foregoing, Company agrees that it will not terminate this Agreement or enter into a binding agreement with respect to such Competing Transaction if Acquiror has, within the 48-hour period referred to in clause (E) of the preceding sentence, made a written offer that is at least as favorable to Company's stockholders from a financial point of view (after considering all of the terms of such Competing Transaction) as such Competing Transaction, and, if the Competing Transaction is publicly known, has publicly announced its intention to make such offer. -43- 48 ARTICLE VIII CLOSING CONDITIONS SECTION 8.1 Conditions to Obligations of Each Party Under This Agreement. The respective obligations of each party to effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of the following conditions (any or all of which may be waived by the parties hereto in writing in accordance with Section 9.4 to the extent permitted by applicable Law): (a) If required by applicable Law, this Agreement shall have been approved and adopted by the holders of a majority of the shares of Company Common Stock outstanding as of the record date for the Company Stockholders Meeting. (b) The applicable waiting period under the HSR Act with respect to the Merger shall have expired or been terminated. (c) No judgment, order, decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued by any court or other Government Entity of competent jurisdiction or other legal restraint or prohibition shall be in effect (i) preventing the consummation of the Merger or (ii) prohibiting or limiting the ownership or operation by Acquiror or Company and their respective subsidiaries of any material portion of the business or assets of Acquiror or Company and their respective subsidiaries, taken as a whole, or (iii) compelling Acquiror or Company and their respective subsidiaries to dispose of or hold separate any portion of the business or assets of Acquiror or Company and their respective subsidiaries, taken as a whole, which (A) in the case of either clause (ii) or (iii), would result in a Company Material Adverse Effect or an Acquiror Material Adverse Effect, except if such prohibition or restraint relating to clauses (i), (ii) and (iii) arises under (1) any antitrust, competition or similar statute, law, rule or regulation of any jurisdiction outside the United States of America, or (2) arises under any other statute, law, rule or regulation of any jurisdiction outside the United States of America, or (B) in the case of clauses (i), (ii) and (iii), would reasonably be expected to subject any officer, director, employee or stockholder of Company or Acquiror to any civil or criminal liability. (d) (i) In the case of Company's obligations, all governmental consents, orders and approvals (other than pursuant to the HSR Act and other than the filing of the Certificate of Merger by Company with the Office of the Secretary of State of Delaware) legally required for the consummation of the Merger and the transactions contemplated hereby shall have been obtained and be in effect at the Effective Time, except where the failure to obtain any such consent would not reasonably be expected to (A) subject any officer, director, employee or stockholder of Company to civil or criminal liability in respect of the failure to obtain such consent, or (B) have a Company Material Adverse Effect and (ii) in the case of Acquiror Companies' obligations, all other governmental consents, orders and approvals (other than pursuant to the HSR Act) legally required for the consummation of the Merger and the -44- 49 transactions contemplated hereby shall have been obtained and be in effect at the Effective Time, except where the failure to obtain any such consent would not reasonably be expected to have a Company Material Adverse Effect or an Acquiror Material Adverse Effect. (e) Merger Sub shall have accepted for payment and paid for the shares of Company Common Stock tendered pursuant to the Offer. ARTICLE IX TERMINATION, AMENDMENT AND WAIVER SECTION 9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, and, if required by applicable Law, whether before or after approval and adoption of this Agreement and the Merger by the stockholders of Company: (a) by mutual written consent of Acquiror and, subject to Section 1.4(c), Company; (b) by Acquiror, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, if on the Scheduled Expiration Date or any Extended Expiration Date the Offer Conditions set forth in (i) paragraph (a) of Annex A shall not have been satisfied or waived, or (ii) paragraphs (b) and (c) of Annex A shall not have been satisfied or waived; provided, however, that any termination under clause (i) above shall not be effective unless Acquiror shall have paid the Acquiror Termination Fee (as defined in Section 9.5(d)) contemporaneously with such termination; (c) by Company, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, if there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Acquiror Companies set forth in the Agreement or if any representation or warranty of the Acquiror Companies shall have become untrue (except to the extent that such representation and warranty speaks as of another date, in which case such representation and warranty shall be untrue as of such date) (a "Terminating Acquiror Breach"); provided that, Company may not terminate this Agreement under this Section 9.1(c), if (i) such Terminating Acquiror Breach is curable by the Acquiror Companies through the exercise of their reasonable efforts and for so long as the Acquiror Companies continue to exercise such reasonable efforts (or, if shorter, for 20 days), or (ii) the circumstances giving rise to such breach of any of the Acquiror Companies' representations and warranties do not constitute or effect, individually or in the aggregate, an Acquiror Material Adverse Effect; (d) by either Acquiror or Company, if there shall be any decree, judgment, injunction or other order which is final and nonappealable preventing the consummation of the Offer or the Merger, except if the party seeking to terminate this Agreement has not complied with its obligations under Section 7.3(a)(iv) of this Agreement; -45- 50 (e) by Company if (i) Merger Sub fails to commence the Offer in violation of Section 1.1 hereof, or (ii) all of the Offer Conditions have been satisfied or waived and Merger Sub shall not have accepted for payment and paid for shares of Company Common Stock pursuant to the Offer in accordance with the terms thereof; (f) by Acquiror or Company if the Offer is terminated or withdrawn pursuant to its terms (including pursuant to the terms set forth on Annex A) without any shares of Company Common Stock being purchased thereunder; (g) by Acquiror, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, if (i) the Board of Directors of Company withdraws, modifies or amends the Offer Recommendation in a manner adverse to the Acquiror Companies (it being understood that any such modification is not adverse if a majority of the directors on the Board of Directors of Company continue to favorably recommend the Offer and the Merger); (ii) the Board of Directors of Company shall have approved, endorsed or recommended to the stockholders of Company any Competing Transaction; (iii) Company shall have entered into any letter of intent, agreement in principle, acquisition agreement or other similar agreement relating to any Competing Transaction (other than agreements relating solely to non-disclosure or "standstill" provisions); or (iv) a tender offer (other than the Offer) or exchange offer for outstanding shares of capital stock of Company then representing 20% or more of the combined power to vote generally for the election of directors is commenced and the Board of Directors of Company (A) recommends in any manner that the Company's stockholders tender their shares into such tender or exchange offer, or (B) does not recommend in any schedule 14D-9 (or in any other form or schedule required to be filed with the SEC by applicable Law) that Company's stockholders not tender their shares into such tender or exchange offer; (h) by Acquiror, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, if Company amends the Rights Plan to facilitate the acquisition by any person, entity or "group" (as such term is defined under Section 13(d) of the Exchange Act and the rules and regulations promulgated hereunder) (other than the Acquiror Companies) of any of the outstanding shares of its capital stock; or (i) by Company, prior to the purchase of a majority of the shares of Company Common Stock pursuant to the Offer, after complying with Section 7.10(b) (A) through (F), provided that such termination under this subsection (i) shall not be effective unless Company shall have paid the Company Termination Fee. The right of any party hereto to terminate this Agreement pursuant to this Section 9.1 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any party hereto, any person or entity controlling any such party or any of their respective representatives whether prior to or after the execution of this Agreement. SECTION 9.2 Effect of Termination. Except as provided in Section 9.5 or Section 10.1 of this Agreement, in the event of the termination of this Agreement pursuant to Section 9.1, this Agreement shall forthwith become void, there shall be no liability on the part of -46- 51 the Acquiror Companies or Company or any of their respective officers or directors to the other and all rights and obligations of any party hereto shall cease, except that nothing herein shall relieve any party from its obligations with respect to any breach of this Agreement. SECTION 9.3 Amendment. Subject to Section 1.4(c), this Agreement may be amended by the parties hereto by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time; provided, however, that, after approval of the Merger by the stockholders of Company, no amendment may be made that by Law requires further approval by such stockholders without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. SECTION 9.4 Waiver. At any time prior to the Effective Time, subject to Section 1.4(c), any party hereto may to the extent allowed by applicable law (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto and (c) waive compliance by the other party with any of the agreements or conditions for the benefit of the waiving party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. For purposes of this Section 9.4, the Acquiror Companies as a group shall be deemed to be one party. SECTION 9.5 Fees, Expenses and Other Payments. (a) All Expenses (as defined in paragraph (b) of this Section 9.5) incurred by the parties hereto shall be borne solely and entirely by the party which has incurred such Expenses; provided, however, that the allocable share of the Acquiror Companies as a group and Company shall be one-half each for all Expenses related to (i) printing, filing and mailing the Offer Documents, the Information Statement, the Schedule 14D-9 and the Company Proxy Statement, (ii) all SEC and other regulatory filing fees incurred in connection with the Offer Documents, the Information Statement, the Schedule 14D-9 and the Company Proxy Statement, and (iii) all fees of preparing and filing appropriate notification under the HSR Act. Notwithstanding the foregoing, (i) if this Agreement is terminated by Acquiror pursuant to Section 9.1(b), then Company shall make a nonrefundable cash payment to Acquiror, within two business days after such termination, in an amount equal to the aggregate amount of all fees and reasonable, documented, out-of-pocket expenses (including with respect to fees, all filing fees and all reasonable attorneys' fees, accountants' fees and financial advisory fees) that have been paid or that may become payable by or on behalf of Acquiror in connection with the preparation and negotiation of the Transaction Documents and otherwise in connection with the Offer and the Merger, provided, however, that such payment shall not exceed $1,000,000, and (ii) if this Agreement is terminated by Company pursuant to Section 9.1(c), then Acquiror shall make a nonrefundable cash payment to Company, within two business days after such termination, in an amount equal to the aggregate amount of all fees and reasonable, documented, out-of-pocket expenses (including with respect to fees, all filing fees and all reasonable attorneys' fees, accountants' fees and financial advisory fees) that have been paid or that may become payable by or on behalf of Company in connection with the preparation and negotiation of the -47- 52 Transaction Documents and otherwise in connection with the Offer and the Merger, provided, however, that such payment shall not exceed $1,000,000. (b) "Expenses" as used in this Agreement shall include all reasonable out-of-pocket expenses (including, without limitation, all reasonable fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and its affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the preparation, printing, filing and mailing of the Offer Documents, the Information Statement, the Schedule 14D-9, the Company Proxy Statement, the solicitation of Company stockholder approvals and all other matters related to the consummation of the transactions contemplated hereby. (c) If (i) Acquiror terminates this Agreement pursuant to Section 9.1(g); (ii) Acquiror terminates this Agreement pursuant to Section 9.1(h), or (iii) Company terminates this Agreement pursuant to Section 9.1(i), then in any such case Company shall pay to Acquiror the Company Termination Fee. The "Company Termination Fee" shall be equal to $5,625,000. The Company Termination Fee shall be paid (A) contemporaneously with the termination referred to in clause (iii) above; and (B) within two business days following the termination referred to in clause (i) or (ii) above. (d) If Acquiror terminates this Agreement pursuant to Section 9.1(b)(i), then in such case Acquiror shall pay to Company the Acquiror Termination Fee contemporaneously with such termination or, if Company terminates this Agreement pursuant to Section 9.1(e) and Company shall not have breached in any material respect any representation, warranty or covenant on the part of Company contained in this Agreement, then in such case Acquiror shall pay to Company the Acquiror Termination Fee within two business days following such termination. The "Acquiror Termination Fee" shall equal $16,875,000. ARTICLE X GENERAL PROVISIONS SECTION 10.1 Effectiveness of Representations, Warranties and Agreements. (a) Except as set forth in Section 10.1(b) of this Agreement, the representations, warranties, covenants and agreements of each party hereto shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any other party hereto, any person or entity controlling any such party or any of their representatives whether prior to or after the execution of this Agreement. (b) The representations, warranties, covenants and agreements in this Agreement or in any certificate or instrument delivered pursuant hereto shall terminate at the Effective Time or upon the termination of this Agreement pursuant to Article IX, except that Company's representations and warranties set forth in Article IV shall terminate on the date that Merger Sub purchases a majority of the shares of Company Common Stock pursuant to the -48- 53 Offer, Company's covenants set forth in Article VI shall terminate on the date that Merger Sub purchase a majority of the shares of Company Common Stock pursuant to the Offer, the agreements set forth in Articles II and III and Sections 7.8 and 7.9 shall survive the Effective Time and those set forth in Sections 9.2, 9.5 and Article X hereof shall survive termination. (c) Any disclosure in the Company Disclosure Schedule or the Acquiror Disclosure Schedule shall be deemed to have been made with respect to any representation and warranty to the extent that the applicability of such disclosure to such representation and warranty is reasonably apparent on its face. In the event of any inconsistency between the statements made in the body of this Agreement and those contained in the Company Disclosure Schedule or the Acquiror Disclosure Schedule (other than an express exception to a specifically identified statement), those in this Agreement shall control. SECTION 10.2 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given upon receipt, if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like changes of address) or sent by electronic transmission to the facsimile number specified below: (a) If to any of the Acquiror Companies, to: Kulicke and Soffa Industries, Inc. 2101 Blair Mill Road Willow Grove, PA 19090 Attention: C. Scott Kulicke Telecopier No.: (215) 784-6258 with a copy to: F. Douglas Raymond, III Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 Telecopier No.: 215-988-2757 -49- 54 (b) If to Company, to: Cerprobe Corporation 1150 North Fiesta Boulevard Gilbert, Arizona 85233 Attention: Ross J. Mangano Telecopier No.: (480) 333-1799 with a copy to: Lance Bridges, Esq. Cooley Godward LLP 4365 Executive Drive, Suite 1100 San Diego, CA 92121-2128 Telecopier No.: 858-453-3555 SECTION 10.3 Certain Definitions. For the purposes of this Agreement, the term: (a) "affiliate" means a person or entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person; (b) "business day" means any day other than a day on which banks in the State of Delaware are authorized or obligated to be closed; (c) "control" (including the terms "controlled," "controlled by" and "under common control with") means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of stock or as trustee or executor, by contract or credit arrangement or otherwise; (d) "knowledge" or any derivation thereof with respect to Company or the Acquiror Companies means, with respect to an individual, that (i) such individual is actually aware of a particular fact or other matter or (ii) such individual could reasonably be expected to discover or otherwise become aware of a particular fact or other matter in the reasonable exercise of his or her duties taking into account his or her position with Company or Acquiror, as applicable. Company or the Acquiror Companies, as applicable, will be deemed to have knowledge of a particular fact or other matter if any individual who as of the date hereof is serving as a director or officer of Company or the Acquiror, as applicable, has, or at any time had, knowledge of such fact or other matter. (e) "person" means an individual, corporation, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d) of the Exchange Act); -50- 55 (f) "Significant Subsidiary" means any subsidiary of Company that would constitute a Significant Subsidiary of such party within the meaning of Rule 1-02 of Regulation S-X of the SEC; (g) "subsidiary" or "subsidiaries" of Company, Acquiror, the Surviving Corporation or any other person or entity, means any corporation, partnership, joint venture or other legal entity of which Company, Acquiror, the Surviving Corporation or an such other person or entity, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, 50% or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity; and (h) "Tax" or "Taxes" shall mean any and all taxes, charges, fees, levies, assessments, duties or other amounts payable to any federal, state, local or foreign taxing authority or agency, including, without limitation, (i) income, franchise, profits, gross receipts, minimum, alternative minimum, estimated, ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, disability, employment, social security, workers compensation, unemployment compensation, utility, severance, excise, stamp, windfall profits, transfer and gains taxes, (ii) customs, duties, imposts, charges, levies or other similar assessments of any kind, and (iii) interest, penalties and additions to tax imposed with respect thereto. SECTION 10.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 10.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 10.6 Entire Agreement. The Transaction Documents (together with the Exhibits, the Company Disclosure Schedule and the Acquiror Disclosure Schedule), constitute the entire agreement of the parties, and supersede all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter of the Transaction Documents, other than that certain Confidentiality Agreement dated March 16, 2000 between Acquiror and Company. SECTION 10.7 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by any of the parties hereto without the prior written consent of the other parties. Any assignment in violation of the preceding sentence shall be void. -51- 56 SECTION 10.8 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, subject to Section 7.8 nothing in this Agreement, express or implied, is intended to or shall confer upon any other person or entity any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. SECTION 10.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive to, and not exclusive of, any rights or remedies otherwise available. SECTION 10.10 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. SECTION 10.11 Counterparts. This Agreement may be executed in multiple counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. SECTION 10.12 Specific Performance. The parties hereby acknowledge and agree that the failure of any party to this Agreement to perform its agreement and covenants hereunder, including its failure to take all actions as are necessary on its part for the consummation of the Offer and the Merger, will cause irreparable injury to the other parties to this Agreement for which damages, even if available, will not be an adequate remedy. Accordingly, each of the parties hereto hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of any party's obligations and to the granting by any such court of the remedy of specific performance of such party's obligations hereunder. SECTION 10.13 Interpretation. When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or -52- 57 instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a person are also to its permitted successors and assigns. -53- 58 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. KULICKE AND SOFFA INDUSTRIES, INC. By: /s/ C. Scott Kulicke ------------------------------------------- Name: C. Scott Kulicke Title: Chairman and Chief Executive Officer CARDINAL MERGER SUB., INC. By: /s/ C. Scott Kulicke ------------------------------------------- Name: C. Scott Kulicke Title: President CERPROBE CORPORATION By: /s/ C. Zane Close ------------------------------------------- Name: C. Zane Close Title: President and Chief Executive Officer -54- 59 ANNEX A TO AGREEMENT AND PLAN OF MERGER Offer Conditions. Notwithstanding any other provision of the Offer or the Agreement, in addition to (and not in limitation of) Merger Sub's rights pursuant to the Agreement to extend and amend the Offer in accordance with the Agreement, Merger Sub shall not be required to accept for payment or, subject to Rule 14e-1(c) of the Exchange Act, pay for and may delay the acceptance for payment of or, subject to Rule 14e-1(c) of the Exchange Act, the payment for, any shares of Company Common Stock not theretofore accepted for payment or paid for, and Merger Sub may terminate or amend the Offer (subject to Section 1.2 of the Agreement) if (i) a number of shares of Company Common Stock representing at least a majority of the total number of outstanding shares of Company Common Stock shall not have been validly tendered and not withdrawn immediately prior to the expiration of the Offer or otherwise acquired by Acquiror or any of its affiliates prior to the expiration of the Offer ("Minimum Condition"), (ii) any applicable waiting period under the HSR Act shall not have expired or been terminated or (iii) at any time on or after the date of the Agreement and prior to the time of acceptance of such shares of Company Common Stock for payment or the payment therefor, any of the following conditions has occurred and continues to exist: (a) any of the representations and warranties of Company in Section 4 of the Agreement shall be inaccurate as of the date of this Agreement or as of such time (except to the extent that such representations and warranties speak as of another date, in which case such representations and warranties shall be accurate as of such other date) and which inaccuracy shall not have been cured in all material respects by the Scheduled Expiration Date or, if the Offer is extended as permitted by the Agreement, by the Extended Expiration Date, except that any inaccuracies of such representations and warranties will be disregarded if the circumstances giving rise to such inaccuracies do not constitute or effect, individually or in the aggregate, a Company Material Adverse Effect; provided however, that, (A) notwithstanding the foregoing, the representations and warranties set forth in Section 4.3 shall have been true and correct in all material respects (without giving effect to any limitations as to materiality in such representations and warranties), and (B) no update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of this Agreement shall be regarded in determining whether such representation or warranty is true and correct. (b) Company shall not have performed and complied with, in all material respects (without reference to any materiality qualifications therein), each covenant or agreement contained in Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f) and 6.2 (including all subsections thereto) of the Agreement and required to be performed or complied with by it and which breach shall not have been cured in all material respects by the Scheduled Expiration Date or, if the Offer is extended as permitted by the Agreement, by the Extended Expiration Date. (c) Company shall not have performed and complied with, in all respects, each covenant or agreement contained in Sections 6.1(a) and 6.1(b) of the Agreement and A-1 60 required to be performed or complied with by it and which breach shall not have been cured in all material respects by the Scheduled Expiration Date or, if the Offer is extended as permitted by the Agreement, by the Extended Expiration Date, except that any such failures to perform or comply by Company will be disregarded (and the condition will be deemed satisfied) if all such failures to perform or comply do not, individually or in the aggregate, constitute a Company Material Adverse Effect. (d) (i) there shall be pending any suit, action, or proceeding by any Governmental Entity (A) challenging the acquisition by Acquiror or Merger Sub of the shares of Company Common Stock, or seeking to restrain or prohibit the making or consummation of the Offer and the Merger or the performance of any of the other transactions contemplated by the Agreement which are necessary for the making or consummation of the Offering or the Merger, or seeking to obtain from Company any damages that, if such suit, action, or proceeding is successful, would result in a Company Material Adverse Effect, (B) seeking, as a result of the Offer, the Merger or any of the other transactions contemplated by the Agreement, to (1) prohibit or limit the ownership or operation by Company, Acquiror or any of their respective subsidiaries or affiliates of any of the businesses or assets of Company, Acquiror or any of their respective subsidiaries or affiliates, or (2) compel Company, Acquiror or any of their respective subsidiaries or affiliates to dispose of or hold separate any of the material businesses or assets of Company, Acquiror or any of their respective subsidiaries or affiliates, whereby, in the case of clauses (1) and (2) such suit, action or proceeding, if successful, would result in a Company Material Adverse Effect, (C) seeking to impose material limitations on the ability of Acquiror or Merger Sub to acquire or hold, or exercise full rights of ownership of, any shares of Company Common Stock accepted for payment pursuant to the Offer including, without limitation, the right to vote the shares of Company Common Stock accepted for payment by it on all matters properly presented to the shareholders of Company, (D) seeking to prohibit Acquiror or any of its subsidiaries or affiliates from effectively controlling in any material respect the business or operations of Company or its subsidiaries which, if successful, would result in a Company Material Adverse Effect, or, (E) requiring divestiture by Merger Sub or any of its affiliates of any shares of Company Common Stock, or (ii) Company or any of the Acquiror Companies shall have received a written notice from any Governmental Entity stating that such entity is taking affirmative action that would be reasonably likely to result in the filing or commencement of any suit, action or proceeding relating to any actions described in clauses (A) through (E) of this Section (d)(i); (e) There shall have been entered, enacted, promulgated, enforced or issued by any court or other Government Entity of competent jurisdiction any judgment, order, decree, statute, law, ordinance, rule or regulation, or any other legal restraint or prohibition shall be in effect, (i) preventing the consummation of the Offer or the Merger or (ii) prohibiting or limiting the ownership or operation by Acquiror or Company and their respective subsidiaries of any material portion of the business or assets of Acquiror or Company and their respective subsidiaries, taken as a whole, or (iii) compelling Acquiror or Company and their respective subsidiaries to dispose of or hold separate any portion of the business or assets of Acquiror or Company and their respective subsidiaries, taken as a whole, which (A) in the case of either clause (ii) or (iii), would result in a Company Material Adverse Effect or an Acquiror Material A-2 61 Adverse Effect, except if such prohibition or restraint relating to clauses (i), (ii) and (iii) arises under (1) any antitrust, competition or similar statute, law, rule or regulation of any jurisdiction outside the United States of America, or (2) arises under any other statute, law, rule or regulation of any jurisdiction outside the United States of America, or (B) in the case of clauses (i), (ii) and (iii), would reasonably be expected to subject any officer, director, employee or stockholder of Company or Acquiror to any civil or criminal liability. (f) the Agreement shall have been terminated in accordance with its terms; (g) any person or group (which includes a "person" or "group" as such terms are defined in Section 13(d)(3) of the Exchange Act) other than Acquiror, Merger Sub, any of their affiliates, or any group of which any of them is a member, shall have acquired beneficial ownership of more than 20% of the outstanding shares of Company Common Stock. (h) all consents and approvals of and notices to or filings with Governmental Entities required in connection with the Offer shall not have been made or obtained. The foregoing conditions are for the sole benefit of Merger Sub and Acquiror and may be asserted by Merger Sub or Acquiror regardless of the circumstances giving rise to any such condition and may be waived by Merger Sub or Acquiror, in whole or in part, at any time and from time to time, in the sole discretion of Merger Sub or Acquiror. The failure by Merger Sub or Acquiror or any of their respective affiliates at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each right will be deemed an ongoing right which may be asserted at any time and from time to time. A-3 62 Exhibit A STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT ("Agreement"), dated as of October 11, 2000 by and among Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Acquiror"), and Cerprobe Corporation, a Delaware corporation (the "Company"). WHEREAS, concurrently with the execution and delivery of this Agreement, Acquiror, the Company and CARDINAL MERGER SUB., INC. ("Merger Sub") are entering into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which provides, among other things, upon the terms and subject to the conditions thereof, for the acquisition of the Company by Acquiror; and WHEREAS, as a condition to Acquiror's willingness to enter into the Merger Agreement, Acquiror has requested that the Company agree, and the Company has so agreed, to grant to Acquiror an option with respect to certain shares of the Company's common stock, on the terms and subject to the conditions set forth herein. Capitalized terms used and not defined herein shall have the meanings assigned to them in the Merger Agreement. NOW, THEREFORE, to induce Acquiror to enter into the Merger Agreement, and in consideration of the mutual covenants and agreements set forth herein and in the Merger Agreement, the parties hereto agree as follows: 1. Grant of Option. The Company hereby grants Acquiror an irrevocable option (the "Company Option") to purchase from the Company upon original issue from time to time up to a number of shares of common stock, par value $.05 per share ("Company Common Stock"), of the Company equal to 19.9% of the number of shares of Company Common Stock outstanding on the date of this Agreement, subject to adjustment as provided in Section 8 (such shares being referred to herein as the "Company Shares") in the manner set forth below at an initial exercise price of $20 per Company Share (the "Exercise Price"). Notwithstanding the foregoing, in no event shall the number of shares for which the Company Option is exercisable exceed 19.9% of the number of issued and outstanding Company Shares. 2. Exercise of Option. The Company Option may be exercised by Acquiror, in whole or in part, immediately prior to, and subject to the consummation of, a "Trigger Event." For purposes hereof, a "Trigger Event" shall occur if (A) the Merger Agreement is terminated by Acquiror or Company under circumstances that would entitle Acquiror to the Company Termination Fee under Section 9.5 of the Merger Agreement, and (B) within 9 months after such termination the Company consummates a Competing Transaction with or by any person or entity. Company shall provide written notice to Acquiror at least three (3) business days prior to the occurrence of any Trigger Event, so that Acquiror can determine whether it wishes to exercise the Company Option. If Acquiror wishes to exercise the Company Option, Acquiror shall deliver to the Company a written notice (an "Exercise Notice") specifying the total number of Company Shares it wishes to purchase. Each closing of a purchase of Company Shares (a 63 "Closing") shall occur at a place, on a date and at a time designated by Acquiror in an Exercise Notice delivered at least two business days prior to the date of the Closing subject to the satisfaction of the conditions to closing set forth in Section 3 hereof. The Company Option shall terminate upon the earlier of: (i) the Effective Time; or (ii) the date that is nine months after termination of the Merger Agreement pursuant to Section 9.1 thereof (or if, at the expiration of such nine month period the Company Option cannot be exercised by reason of any applicable judgment, decree, order, law or regulation, ten business days after such impediment to exercise shall have been removed or shall have become final and not subject to appeal). Upon the giving by Acquiror to the Company of the Exercise Notice and the tender of the applicable aggregate Exercise Price, Acquiror shall be, and shall be deemed to be, the holder of record of the Company Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Company Shares shall not then be actually delivered to Acquiror. In addition to the rights of the Acquiror under the preceding provisions of this Section, Acquiror shall have the right, immediately prior to, and subject to the consummation of, a Trigger Event, in lieu of paying the Exercise Price in cash, to instruct the Company to reduce the number of shares of Company Common Stock thereafter eligible to be purchased by Acquiror pursuant to the Company Option held by it in accordance with the following formula: (P x E) N = -------------- M where: N= the number of shares of Company Common Stock to be subtracted from remaining number of Company Shares purchasable upon exercise of Acquiror's Company Option; and P= the aggregate number of shares then issuable upon exercise of the Company Option M= the Merger Price per share of Company Common Stock - For purposes hereof, "Merger Price" per share of Company Common Stock on any date means the highest consideration paid with respect to a share of Company Common Stock in the Company Transaction, provided that to the extent such consideration includes equity securities of any other entity, the value of such securities shall be the average of the closing prices per share of such security as reported by the Nasdaq Stock Market, or the primary national securities exchange on which such security is then quoted for the 10 consecutive trading days prior to the date of exercise; provided, however, that if quotes for such security are not reported by the Nasdaq Stock Market and such security is neither traded on the Nasdaq National Market Stock, on a national securities exchange, on the Nasdaq Small Cap -2- 64 Market nor on the OTC Electronic Bulletin Board, the price referred to above shall be the last reported sales price reflected in the over-the-counter market as reported by the National Quotation Bureau, Inc. or any organization performing a similar function. E= the Exercise Price per share of Company Common Stock on the date of such exercise. 3. Conditions to Closing. The obligation of the Company to issue the Company Shares to Acquiror hereunder is subject to the conditions, which (other than the conditions described in clauses (i), (iii) and (iv) below) may be waived by the Company in its sole discretion, that (i) all waiting periods, if any, under the HSR Act, applicable to the issuance of the Company Shares hereunder shall have expired or have been terminated; (ii) all consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Governmental Entity, if any, required in connection with the issuance of the Company Shares hereunder shall have been obtained or made, as the case may be, it being understood that the Company shall not be required to register the Company Shares under the Securities Act prior to their issuance to Acquiror upon exercise of the Company Option; and (iv) no preliminary or permanent injunction or other order by any court of competent jurisdiction prohibiting or otherwise restraining such issuance shall be in effect. 4. Closing. At any Closing, (a) the Company will deliver to Acquiror or its designee a single certificate in definitive form representing the number of the Company Shares designated by Acquiror in its Exercise Notice, such certificate to be registered in the name of Acquiror and to bear the legend set forth in Section 9, and, if applicable, (b) Acquiror will deliver to the Company the aggregate price for the Company Shares so designated and being purchased by wire transfer of immediately available funds. The Company shall pay all expenses, and any and all United States federal, state and local taxes and other charges that may be payable in connection with the preparation, issue and delivery of stock certificates under this Section 4 in the name of Acquiror or its designee. 5. Representations and Warranties of the Company. The Company represents and warrants to Acquiror that (a) the Company has taken all necessary corporate action to authorize and reserve for issuance and to permit it to issue, upon exercise of the Company Option, and at all times from the date hereof through the expiration of the Company Option will have reserved, a number of authorized and unissued Company Shares equal to 19.9% of the number of Company Shares issued and outstanding on the date hereof, such amount being subject to adjustment as provided in Section 8, all of which, upon their issuance and delivery in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, (b) upon delivery of the Company Shares to Acquiror upon the exercise of the Company Option, Acquiror will acquire the Company Shares free and clear of all claims, liens, charges, encumbrances and security interests of any nature whatsoever, and (c) none of the Company, any of its affiliates or anyone acting on its or their behalf has issued, sold or offered any security of the Company to any person under circumstances, or taken any other action, that would cause the issuance and sale -3- 65 of the Option Shares, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act as in effect on the date hereof and, assuming the representations of Acquiror contained in Section 6 are true and correct, the issuance, sale and delivery of the Option Shares hereunder upon exercise of the Company Option will be exempt from the registration and prospectus delivery requirements of the Securities Act, as in effect on the date hereof. 6. Representations and Warranties of Acquiror. Acquiror represents and warrants to the Company that: (i) any Company Shares acquired upon exercise of the Company Option will be acquired for Acquiror's own account, and will not be, and the Company Option is not being, acquired by Acquiror with a view to the distribution thereof in violation of the Securities Act; and (ii) it is an "accredited investor," as that term is defined in Regulation D promulgated under the Securities Act. 7. Registration Rights. The Company will, if requested by Acquiror at any time and from time to time (but no more than twice in total) after the exercise of the Company Option, as expeditiously as possible prepare and file a registration statement under the Securities Act if such registration is necessary in order to permit the sale or other disposition of any or all shares or securities that have been acquired by or are issuable to Acquiror upon exercise of the Company Option, including a "shelf" registration statement under Rule 415 under the Securities Act or any successor provision, and the Company will use its reasonable efforts to qualify such shares or other securities under any applicable state securities laws, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states when it is not otherwise qualified or required. The Company will use reasonable efforts to cause each such registration statement to become effective, to obtain all consents or waivers of other parties which are required therefor, and to keep such registration statement effective for such period, not in excess of 180 calendar days from the day such registration statement first becomes effective, as may be reasonably necessary to effect such sale or other disposition. The obligations of the Company hereunder to file a registration statement and to maintain its effectiveness may be suspended for up to 60 calendar days in the aggregate if the Board of Directors of the Company shall have determined that the filing of such registration statement or the maintenance of its effectiveness would require premature disclosure of material nonpublic information that would materially and adversely affect the Company or otherwise interfere with or adversely affect any pending or proposed offering of securities of the Company or any other material transaction involving the Company. Any registration statement prepared and filed under this Section 7, and any sale covered thereby, will be at the Company's expense except for underwriting discounts or commissions, brokers' fees and the fees and disbursements of Acquiror's counsel related thereto. Acquiror will provide all information reasonably requested by the Company for inclusion in any registration statement to be filed hereunder. -4- 66 If, during the time periods referred to in the first sentence of this Section 7, the Company effects a registration under the Securities Act of the Company's Common Stock for its own account or for any other stockholders of the Common Stock (other than on Form S-4 or Form S-8, or any successor form), it will allow the Acquiror the right to participate in such registration, and such participation will not affect the obligation of the Company to effect demand registration statements for the Acquiror under this Section 7; provided that, if the managing underwriters of such offering advise the Company in writing that in their opinion the number of shares of Company Common Stock requested to be included in such registration exceeds the number which can be sold in such offering, then the amount of securities to be offered for the account of the Acquiror may be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter; provided that notwithstanding any limit on the number of registration statements the Company is obligated to file under Section 7 hereof, the Company will, if requested by Acquiror, file a registration statement with respect to those shares not included in such offering in a shelf registration statement under Rule 415 under the Securities Act. In connection with any registration pursuant to this Section 7, the Company and Acquiror will provide each other and any underwriter of the offering with customary representations, warranties, covenants, indemnification, and contribution in connection with such registration. 8. Standstill. Acquiror hereby agrees that, in connection with any registered underwritten offering of Company Common Stock, Acquiror shall not, and shall not permit any of its subsidiaries to, sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of, any Company Common Stock (or other securities of the Company) held by Acquiror or any of its subsidiaries (other than those shares of Company Common Stock, if any, included in the registration) for a period specified by the representative of the underwriters of Company Common Stock not to exceed one hundred eighty (180) days following the effective date of the applicable registration statement of the Company filed under the Securities Act; provided however that the Company's officers, directors and stockholders required to file reports under Section 16 of the Exchange Act are so limited. The Acquiror agrees to, and agrees to cause its subsidiaries to, execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters of Company Common Stock which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Company Common Stock, the Acquiror shall, and shall cause each of its subsidiaries to, provide, within ten (10) days of such request, such information as may be reasonably required by the Company or such representative in connection with the completion of any public offering of the Company Common Stock pursuant to a registration statement filed under the Securities Act. The Company may impose stop-transfer instructions with respect to the shares of Company Common Stock (or other securities of the Company) subject to the foregoing restriction until the end of said one hundred eighty (180) day period. The Acquiror agrees that any transferee of any shares of Company Common Stock in excess of 25% in aggregate of the total Company Shares subject to this Agreement shall be bound by this paragraph. -5- 67 9. Adjustment Upon Changes in Capitalization. Without limiting any restriction on the Company contained in this Agreement or in the Merger Agreement, in the event of any change in Company Common Stock by reason of stock dividends, splitups, mergers (other than the Merger), recapitalizations, combinations, exchange of shares or the like, the type and number of shares or securities subject to the Company Option, and the purchase price per share provided in Section 1, shall be adjusted appropriately to restore to Acquiror its rights hereunder, including the right to purchase from the Company (or its successors) shares of Company Common Stock representing 19.9% of the outstanding Company Common Stock for the aggregate Exercise Price calculated as of the date of this Agreement as provided in Section 1. 10. Restrictive Legends. Each certificate representing shares of Company Common Stock issued to Acquiror hereunder shall include a legend in substantially the following form: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. It is understood and agreed that the legend shall be removed in its entirety by delivery of substitute certificate(s) without such legend if Acquiror shall have delivered to the Company a copy of a letter from the staff of the Securities and Exchange Commission, or an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such legend is not required for purposes of the Securities Act. In addition, such certificates shall bear any other legend as may be required by law. Certificates representing shares sold in a registered public offering pursuant to Section 7 shall not be required to bear the legend set forth in this Section 10. 11. Binding Effect, No Assignment, No Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as expressly provided for in this Agreement, neither this Agreement nor the rights or the obligations of either party hereto are assignable, except by operation of law, or with the written consent of the other party. Nothing contained in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective permitted assigns any rights or remedies of any nature whatsoever by reason of this Agreement. Any Company Shares sold by a party in compliance with the provisions of Section 7 shall, upon consummation of such sale, be free of the restrictions imposed with respect to such shares by this Agreement, unless and until such party shall repurchase or otherwise become the beneficial owner of such shares, and any transferee of such shares shall not be entitled to the registration rights of such party. 12. Specific Performance. The parties hereby acknowledge and agree that the failure of the Company to perform its agreement and covenants hereunder will cause irreparable injury to Acquiror for which damages, even if available, will not be an adequate remedy. Accordingly, the Company hereby consents to the issuance of injunctive relief by any court of competent -6- 68 jurisdiction to compel performance of the Company's obligations and to the granting by any such court of the remedy of specific performance of its obligations hereunder. 13. Entire Agreement. This Agreement and the Merger Agreement (including the exhibits and schedules thereto) constitute the entire agreement of the parties, and supersedes all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof. 14. Further Assurances. Each party will execute and deliver all such further documents and instruments and take all such further action as may be necessary in order to consummate the transactions contemplated hereby. 15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect. If any court or other competent authority holds any provisions of this Agreement to be null, void or unenforceable, the parties hereto shall negotiate in good faith the execution and delivery of an amendment to this Agreement in order, as nearly as possible, to effectuate, to the extent permitted by law, the intent of the parties hereto with respect to such provision and the economic effects thereof. If for any reason any such court or regulatory determines that Acquiror is not permitted to acquire the full number of shares of Company Common Stock provided in Section 1 hereof (as the same may be adjusted), it is the express intention of the Company to allow Acquiror to acquire such lesser number of shares as may be permissible, without any amendment or modification hereof. Each party agrees that, should any court or other competent authority hold any provision of this Agreement or part hereof to be null, void or unenforceable, or order any party to take any action inconsistent herewith, or not take any action required herein, the other party shall not be entitled to specific performance of such provision or part hereof or to any other remedy, including without limitation money damages, for breach hereof or of any other provision of this Agreement or part hereof as the result of such holding or order. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given in the manner provided in the Merger Agreement. 17. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. 18. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 19. Counterparts. This Agreement may be executed in multiple counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. -7- 69 20. Expenses. Except as otherwise expressly provided herein or in the Merger Agreement, all costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such expenses. 21. Amendments, Waiver. This Agreement may be amended by the parties hereto and the terms and conditions hereof may be waived only by an instrument in writing signed on behalf of the parties hereto or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance. 22. Extension of Time Periods. The time periods for exercise of certain rights under Sections 2 shall be extended (i) to the extent necessary to obtain all regulatory approvals for the exercise of such rights, and for the expiration of all statutory waiting periods and (ii) to the extent necessary to avoid any liability under Section 16(b) of the Exchange Act by reason of such exercise. 23. Replacement of Company Option. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Agreement, if mutilated, the Company will execute and deliver a new Agreement of like tenor and date. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written. KULICKE AND SOFFA INDUSTRIES, INC. By /s/ C. Scott Kulicke --------------------------------- C. Scott Kulicke CERPROBE CORPORATION By /s/ C. Zane Close --------------------------------- C. Zane Close -8- 70 Exhibit B CERTIFICATE OF MERGER OF CARDINAL MERGER SUB., INC. WITH AND INTO CERPROBE CORPORATION CERPROBE CORPORATION, a Delaware corporation, does hereby certify: 1. The name and state of incorporation of each of the constituent corporations participating in the merger are: (a) CERPROBE CORPORATION ("CERPROBE"), which is incorporated under the laws of the State of Delaware; and (b) Cardinal Merger Sub., Inc. ("Merger Sub"), which is incorporated under the laws of the State of Delaware. 2. The Agreement and Plan of Merger, dated as of October 11, 2000 (the "Merger Agreement"), by and among CERPROBE, Merger Sub and Kulicke & Soffa Industries, Inc., has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with Section 251 of the Delaware General Corporation Law. 3. CERPROBE is the surviving corporation of the merger (the "Corporation"). 4. The amendments or changes in the amended and restated certificate of incorporation of CERPROBE that are to be effected by the merger are as follows: The amended and restated certificate of incorporation of CERPROBE is hereby amended and restated in its entirety to read as follows: 71 THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CERPROBE CORPORATION FIRST: The name of the Corporation is "Cerprobe Corporation." SECOND: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, Wilmington, DE 19801. The name of the Corporation's registered agent at such address is The Corporation Trust Company, in the County of New Castle. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is one thousand (1,000) shares, par value $.01 per share, all of which are of one class and are designated as Common Stock. FIFTH: In furtherance and not in limitation of the general powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter or repeal the Bylaws of the Corporation, except as specifically otherwise provided therein. SIXTH: A director of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that Section 102(b)(7) (or any successor provision) of the Delaware General Corporation Law, as amended from time to time, expressly provides that the liability of a director may not be eliminated or limited. No amendment or repeal of this paragraph SIXTH shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal." * * * * * -2- 72 5.The executed Merger Agreement is on file at the principal place of business of the Corporation, the address of which is as follows: 1150 North Fiesta Boulevard, Gilbert, Arizona 85233. 6. A copy of the Merger Agreement will be furnished by the Corporation, on request, and without cost, to any stockholder of any constituent corporation of the merger. IN WITNESS WHEREOF, the Corporation has caused this certificate of Merger to be signed by __________________, its President and an authorized officer of the Corporation this ______ day of __________, 200_. CERPROBE CORPORATION By: ------------------------------------------ Name: Title: -3- 73 Exhibit C AMENDED AND RESTATED BY LAWS of CERPROBE CORPORATION (a Delaware corporation) ARTICLE 1 OFFICES Section 1.01 Offices. The Corporation may have offices at such places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE 2 MEETINGS OF STOCKHOLDERS Section 2.01 Place of Meeting. Meetings of the stockholders shall be held at such place, within the State of Delaware or elsewhere, as may be fixed from time to time by the Board of Directors. If no place is so fixed for a meeting, it shall be held at the Corporation's then principal executive office. Section 2.02 Annual Meeting. The annual meeting of stockholders shall be held, unless the Board of Directors shall fix some other hour or date therefor, at such time fixed by the Board of Directors on the second Tuesday of February in each year, if not a legal holiday under the laws of Delaware, and, if a legal holiday, then on the next succeeding secular day not a legal holiday under the laws of Delaware, at which the stockholders shall elect by plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting. Section 2.03 Notice of Annual Meetings. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than 10 days nor more than 60 days before the date of the meeting. Section 2.04 List of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of stockholders 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. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a 74 period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be so specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 2.05 Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Chairman of the Board or the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06 Notice of Special Meetings. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than 10 days nor more than 60 days before the date of the meeting. Section 2.07 Quorum; Voting. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. When a quorum is present at any meeting, except for elections of directors, which shall be decided by plurality vote, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no shares shall be voted pursuant to a proxy more than three years after the date of the proxy unless the proxy provides for a longer period. Section 2.08 Action Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary -2- 75 to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty days after the earliest dated consent delivered in the manner required by this Section to the corporation, written consents signed by a sufficient number of stockholders to take action are delivered in the manner required by this Section to the Corporation. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation. ARTICLE 3 DIRECTORS Section 3.01 Number and Term of Office. The number of directors of the Corporation shall be such number as shall be designated from time to time by resolution of the Board of Directors and initially shall be three. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02 hereof. Each director elected shall hold office for a term of one year and shall serve until his successor is elected and qualified or until his earlier death, resignation or removal. Directors need not be stockholders. Section 3.02 Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10 percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Section 3.03 Resignations. Any director may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board, if there is one, the President, or the Secretary. Such resignation shall take effect at the time of receipt thereof or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. -3- 76 Section 3.04 Direction of Management. The business of the Corporation shall be managed under the direction of its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. Section 3.05 Place of Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 3.06 Annual Meeting. Immediately after each annual election of directors, the Board of Directors shall meet for the purpose of organization, election of officers, and the transaction of other business, at the place where such election of directors was held or, if notice of such meeting is given, at the place specified in such notice. Notice of such meeting need not be given. In the absence of a quorum at said meeting, the same may be held at any other time and place which shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by the directors, if any, not attending and participating in the meeting. Section 3.07 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board. Section 3.08 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, if there is one, or the President on 2 days' notice to each director; either personally (including telephone), or in the manner specified in Section 4.01; special meetings shall be called by the Chairman of the Board, if there is one, or the President or the Secretary in like manner and on like notice on the written request of two directors. Section 3.09 Quorum; Voting. At all meetings of the Board, a majority of the directors shall constitute a quorum for the transaction of business; and at all meetings of any committee of the Board, a majority of the members of such committee shall constitute a quorum for the transaction of business. The act of a majority of the directors present at any meeting of the Board of Directors or any committee thereof at which there is a quorum present shall be the act of the Board of Directors or such committee, as the case may be, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors or committee thereof, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.10 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. -4- 77 Section 3.11 Participation in Meetings. One or more directors may participate in any meeting of the Board or committee thereof by means of conference telephone or similar communications equipment by which all persons participating can hear each other. Section 3.12 Committees of Directors. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors or in these bylaws, shall have and may exercise all of the powers and authority of the Board of Directors and may authorize the seal of the Corporation to be affixed to all papers which may require it, but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any bylaw of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when requested. Section 3.13 Compensation of Directors. Each director shall be entitled to receive such compensation, if any, as may from time to time be fixed by the Board of Directors. Members of special or standing committees may be allowed like compensation for attending committee meetings. Directors may also be reimbursed by the Corporation for all reasonable expenses incurred in traveling to and from the place of each meeting of the Board or of any such committee or otherwise incurred in the performance of their duties as directors. No payment referred to herein shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE 4 NOTICES Section 4.01 Notices. Whenever, under the provisions of law or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, such requirement shall not be construed to necessitate personal notice. Such notice may in every instance be effectively given by depositing a writing in a post office or letter box, in a postpaid, sealed wrapper, or by dispatching a prepaid telegram, cable, telecopy or telex or by delivering a writing in a sealed wrapper prepaid to a courier service guaranteeing delivery within 2 business days, in each case addressed to such director or stockholder, at his address as it appears on the records of the Corporation in the case of a stockholder and at his business address (unless he shall have filed a written request with the Secretary that notices be directed to a different address) in the case of a director. Such notice shall be deemed to be given at the time it is so dispatched. Section 4.02 Waiver of Notice. Whenever, under the provisions of law or of the Certificate of Incorporation or of these Bylaws, notice is required to be given, a waiver thereof in -5- 78 writing, signed by the person or persons entitled to said notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent thereto. Neither the business nor the purpose of any meeting need be specified in such a waiver. ARTICLE 5 OFFICERS Section 5.01 Number. The officers of the Corporation shall be a President, a Secretary and a Treasurer, and may also include a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers, and such other officers as may be elected by the Board of Directors. Any number of offices may be held by the same person. Section 5.02 Election and Term of Office. The officers of the Corporation shall be elected by the Board of Directors. Officers shall hold office at the pleasure of the Board. Section 5.03 Removal. Any officer may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors. Section 5.04 Chairman of the Board. The Chairman of the Board, if there is one, shall preside at all meetings of the Board of Directors and shall perform such other duties, if any, as may be specified by the Board from time to time. Section 5.05 President. The President shall be the chief executive officer of the Corporation and shall have overall responsibility for the management of the business and operations of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. In the absence of the Chairman of the Board he shall preside over meetings of the Board of Directors. In general, he shall perform all duties incident to the office of President, and such other duties as from time to time may be assigned to him by the Board. Section 5.06 Vice Presidents. The Vice Presidents shall perform such duties and have such authority as may be specified in these Bylaws or by the Board of Directors or the President. In the absence or disability of the President, the Vice Presidents, in order of seniority established by the Board of Directors or the President, shall perform the duties and exercise the powers of the President. Section 5.07 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the stockholders and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President. He shall have custody of the corporate seal of the Corporation and he, or an Assistant Secretary, shall have authority to affix the same to any instrument, and when so affixed it may be -6- 79 attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. Section 5.08 Assistant Secretaries. The Assistant Secretary or Secretaries shall, in the absence or disability of the Secretary, perform the duties and exercise the authority of the Secretary and shall perform such other duties and have such other authority as the Board of Directors or the President may from time to time prescribe. Section 5.09 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the President or the Chief Financial Officer, taking proper vouchers for such disbursements, and shall render to the Board of Directors when the Board so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. Section 5.10 Assistant Treasurers. The Assistant Treasurer or Treasurers shall, in the absence or disability of the Treasurer, perform the duties and exercise the authority of the Treasurer and shall perform such other duties and have such other authority as the Board of Directors may from time to time prescribe. ARTICLE 6 INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 6.01 Indemnification. Any person who was or is a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving while a director or officer of the Corporation at the request of the Corporation as a director, officer, employee, agent, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Indemnitee"), shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such action, suit or proceeding; provided, however, that, except as provided in Section 6.03 hereof with respect to Proceedings to enforce rights to indemnification, the Corporation shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. For purposes of this Article 6 only, the term -7- 80 "Corporation" shall mean the Corporation and any constituent corporation absorbed by the Corporation in a consolidation or merger. Section 6.02 Advances. Any Indemnitee claiming indemnification within the scope of Section 6.01 shall be entitled to advances from the Corporation for payment of the expenses of defending actions against such Indemnitee in advance of their final disposition (an "Advancement of Expenses"); provided, however, that, if the Delaware General Corporation Law requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such Indemnitee is not entitled to be indemnified for such expenses under Section 6.01 or otherwise (an "Undertaking"). Section 6.03 Right of Indemnitee to Bring Suit. If a claim under Section 6.01 is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be twenty days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit or in a suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that the Indemnitee has not met the applicable standard of conduct set forth in the Delaware General Corporation Law. Furthermore, in any suit by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Corporation shall be entitled to recover such expenses upon final adjudication that the Indemnitee has not met the applicable standard of conduct set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such a suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct, or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right hereunder, or by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses under this Section or otherwise shall be on the Corporation. Section 6.04 Other Rights. The indemnification and advancement of expenses provided by this Article 6 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any insurance or other agreement, vote of shareholders or disinterested directors or otherwise, both as to actions in -8- 81 their official capacity and as to actions in another capacity while holding an office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. Section 6.05 Insurance. The Corporation shall have power to purchase and maintain insurance, at its expense, on behalf of any person who is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of these Bylaws. Section 6.06 Modification. The duties of the Corporation to indemnify and to advance expenses to a director or officer provided in this Article 6 shall be in the nature of a contract right of each such director or officer, and no amendment or repeal of any provision of this Article 6 shall alter, to the detriment of such director or officer, the right of such person to the advancement of expenses or indemnification related to a claim based on an act or failure to act which took place prior to such amendment, repeal or termination. ARTICLE 7 CERTIFICATES OF STOCK Section 7.01 Stock Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate in the form prescribed by the Board of Directors signed on behalf of the Corporation by the Chairman of the Board or the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, representing the number of shares owned by him in the Corporation. Any or all signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue. Section 7.02 Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. -9- 82 Section 7.03 Transfers of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 7.04 Fixing Record Date. The Board of Directors of the Corporation may fix a record date for the purpose of determining the stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or to consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and such record date shall not be (i) in the case of such a meeting of stockholders, more than 60 nor less than 10 days before the date of the meeting of stockholders, or (ii) in the case of consents in writing without a meeting, more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors, or (iii) in other cases, more than 60 days prior to the payment or allotment or change, conversion or exchange or other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board of Directors fixes a new record date for the adjourned meeting. Section 7.05 Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of stock to receive dividends and to vote as such owner, and shall be entitled to hold liable for calls and assessments a person registered on its books as the owner of stock, and shall not be bound to recognize any equitable or other claim to, or interest in, such stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE 8 AMENDMENTS Section 8.01 Amendments. These Bylaws may be altered, amended or repealed, and new Bylaws may be adopted, by the stockholders or by the Board of Directors at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. -10- EX-99.(D)(2) 11 w41645ex99-d2.txt STOCK OPTION AGREEMENT 1 Exhibit (d)(2) STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT ("Agreement"), dated as of October 11, 2000 by and among Kulicke and Soffa Industries, Inc., a Pennsylvania corporation ("Acquiror"), and Cerprobe Corporation, a Delaware corporation (the "Company"). WHEREAS, concurrently with the execution and delivery of this Agreement, Acquiror, the Company and Cardinal Merger Sub., Inc. ("Merger Sub") are entering into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which provides, among other things, upon the terms and subject to the conditions thereof, for the acquisition of the Company by Acquiror; and WHEREAS, as a condition to Acquiror's willingness to enter into the Merger Agreement, Acquiror has requested that the Company agree, and the Company has so agreed, to grant to Acquiror an option with respect to certain shares of the Company's common stock, on the terms and subject to the conditions set forth herein. Capitalized terms used and not defined herein shall have the meanings assigned to them in the Merger Agreement. NOW, THEREFORE, to induce Acquiror to enter into the Merger Agreement, and in consideration of the mutual covenants and agreements set forth herein and in the Merger Agreement, the parties hereto agree as follows: 1. Grant of Option. The Company hereby grants Acquiror an irrevocable option (the "Company Option") to purchase from the Company upon original issue from time to time up to a number of shares of common stock, par value $.05 per share ("Company Common Stock"), of the Company equal to 19.9% of the number of shares of Company Common Stock outstanding on the date of this Agreement, subject to adjustment as provided in Section 8 (such shares being referred to herein as the "Company Shares") in the manner set forth below at an initial exercise price of $20 per Company Share (the "Exercise Price"). Notwithstanding the foregoing, in no event shall the number of shares for which the Company Option is exercisable exceed 19.9% of the number of issued and outstanding Company Shares. 2. Exercise of Option. The Company Option may be exercised by Acquiror, in whole or in part, immediately prior to, and subject to the consummation of, a "Trigger Event." For purposes hereof, a "Trigger Event" shall occur if (A) the Merger Agreement is terminated by Acquiror or Company under circumstances that would entitle Acquiror to the Company Termination Fee under Section 9.5 of the Merger Agreement, and (B) within 9 months after such termination the Company consummates a Competing Transaction with or by any person or entity. Company shall provide written notice to Acquiror at least three (3) business days prior to the occurrence of any Trigger Event, so that Acquiror can determine whether it wishes to exercise the Company Option. If Acquiror wishes to exercise the Company Option, Acquiror shall deliver to the Company a written notice (an "Exercise Notice") specifying the total number of Company Shares it wishes to purchase. Each closing of a purchase of Company Shares (a 2 "Closing") shall occur at a place, on a date and at a time designated by Acquiror in an Exercise Notice delivered at least two business days prior to the date of the Closing subject to the satisfaction of the conditions to closing set forth in Section 3 hereof. The Company Option shall terminate upon the earlier of: (i) the Effective Time; or (ii) the date that is nine months after termination of the Merger Agreement pursuant to Section 9.1 thereof (or if, at the expiration of such nine month period the Company Option cannot be exercised by reason of any applicable judgment, decree, order, law or regulation, ten business days after such impediment to exercise shall have been removed or shall have become final and not subject to appeal). Upon the giving by Acquiror to the Company of the Exercise Notice and the tender of the applicable aggregate Exercise Price, Acquiror shall be, and shall be deemed to be, the holder of record of the Company Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Company Shares shall not then be actually delivered to Acquiror. In addition to the rights of the Acquiror under the preceding provisions of this Section, Acquiror shall have the right, immediately prior to, and subject to the consummation of, a Trigger Event, in lieu of paying the Exercise Price in cash, to instruct the Company to reduce the number of shares of Company Common Stock thereafter eligible to be purchased by Acquiror pursuant to the Company Option held by it in accordance with the following formula: (P x E) N = -------------- M where: N= the number of shares of Company Common Stock to be subtracted from remaining number of Company Shares purchasable upon exercise of Acquiror's Company Option; and P= the aggregate number of shares then issuable upon exercise of the Company Option M= the Merger Price per share of Company Common Stock - For purposes hereof, "Merger Price" per share of Company Common Stock on any date means the highest consideration paid with respect to a share of Company Common Stock in the Company Transaction, provided that to the extent such consideration includes equity securities of any other entity, the value of such securities shall be the average of the closing prices per share of such security as reported by the Nasdaq Stock Market, or the primary national securities exchange on which such security is then quoted for the 10 consecutive trading days prior to the date of exercise; provided, however, that if quotes for such security are not reported by the Nasdaq Stock Market and such security is neither traded on the Nasdaq National Market Stock, on a national securities exchange, on the Nasdaq Small Cap -2- 3 Market nor on the OTC Electronic Bulletin Board, the price referred to above shall be the last reported sales price reflected in the over-the-counter market as reported by the National Quotation Bureau, Inc. or any organization performing a similar function. E = the Exercise Price per share of Company Common Stock on the date of such exercise. 3. Conditions to Closing. The obligation of the Company to issue the Company Shares to Acquiror hereunder is subject to the conditions, which (other than the conditions described in clauses (i), (iii) and (iv) below) may be waived by the Company in its sole discretion, that (i) all waiting periods, if any, under the HSR Act, applicable to the issuance of the Company Shares hereunder shall have expired or have been terminated; (ii) all consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Governmental Entity, if any, required in connection with the issuance of the Company Shares hereunder shall have been obtained or made, as the case may be, it being understood that the Company shall not be required to register the Company Shares under the Securities Act prior to their issuance to Acquiror upon exercise of the Company Option; and (iv) no preliminary or permanent injunction or other order by any court of competent jurisdiction prohibiting or otherwise restraining such issuance shall be in effect. 4. Closing. At any Closing, (a) the Company will deliver to Acquiror or its designee a single certificate in definitive form representing the number of the Company Shares designated by Acquiror in its Exercise Notice, such certificate to be registered in the name of Acquiror and to bear the legend set forth in Section 9, and, if applicable, (b) Acquiror will deliver to the Company the aggregate price for the Company Shares so designated and being purchased by wire transfer of immediately available funds. The Company shall pay all expenses, and any and all United States federal, state and local taxes and other charges that may be payable in connection with the preparation, issue and delivery of stock certificates under this Section 4 in the name of Acquiror or its designee. 5. Representations and Warranties of the Company. The Company represents and warrants to Acquiror that (a) the Company has taken all necessary corporate action to authorize and reserve for issuance and to permit it to issue, upon exercise of the Company Option, and at all times from the date hereof through the expiration of the Company Option will have reserved, a number of authorized and unissued Company Shares equal to 19.9% of the number of Company Shares issued and outstanding on the date hereof, such amount being subject to adjustment as provided in Section 8, all of which, upon their issuance and delivery in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, (b) upon delivery of the Company Shares to Acquiror upon the exercise of the Company Option, Acquiror will acquire the Company Shares free and clear of all claims, liens, charges, encumbrances and security interests of any nature whatsoever, and (c) none of the Company, any of its affiliates or anyone acting on its or their behalf has issued, sold or offered any security of the Company to any person under circumstances, or taken any other action, that would cause the issuance and sale -3- 4 of the Option Shares, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act as in effect on the date hereof and, assuming the representations of Acquiror contained in Section 6 are true and correct, the issuance, sale and delivery of the Option Shares hereunder upon exercise of the Company Option will be exempt from the registration and prospectus delivery requirements of the Securities Act, as in effect on the date hereof. 6. Representations and Warranties of Acquiror. Acquiror represents and warrants to the Company that: (i) any Company Shares acquired upon exercise of the Company Option will be acquired for Acquiror's own account, and will not be, and the Company Option is not being, acquired by Acquiror with a view to the distribution thereof in violation of the Securities Act; and (ii) it is an "accredited investor," as that term is defined in Regulation D promulgated under the Securities Act. 7. Registration Rights. The Company will, if requested by Acquiror at any time and from time to time (but no more than twice in total) after the exercise of the Company Option, as expeditiously as possible prepare and file a registration statement under the Securities Act if such registration is necessary in order to permit the sale or other disposition of any or all shares or securities that have been acquired by or are issuable to Acquiror upon exercise of the Company Option, including a "shelf" registration statement under Rule 415 under the Securities Act or any successor provision, and the Company will use its reasonable efforts to qualify such shares or other securities under any applicable state securities laws, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states when it is not otherwise qualified or required. The Company will use reasonable efforts to cause each such registration statement to become effective, to obtain all consents or waivers of other parties which are required therefor, and to keep such registration statement effective for such period, not in excess of 180 calendar days from the day such registration statement first becomes effective, as may be reasonably necessary to effect such sale or other disposition. The obligations of the Company hereunder to file a registration statement and to maintain its effectiveness may be suspended for up to 60 calendar days in the aggregate if the Board of Directors of the Company shall have determined that the filing of such registration statement or the maintenance of its effectiveness would require premature disclosure of material nonpublic information that would materially and adversely affect the Company or otherwise interfere with or adversely affect any pending or proposed offering of securities of the Company or any other material transaction involving the Company. Any registration statement prepared and filed under this Section 7, and any sale covered thereby, will be at the Company's expense except for underwriting discounts or commissions, brokers' fees and the fees and disbursements of Acquiror's counsel related thereto. Acquiror will provide all information reasonably requested by the Company for inclusion in any registration statement to be filed hereunder. -4- 5 If, during the time periods referred to in the first sentence of this Section 7, the Company effects a registration under the Securities Act of the Company's Common Stock for its own account or for any other stockholders of the Common Stock (other than on Form S-4 or Form S-8, or any successor form), it will allow the Acquiror the right to participate in such registration, and such participation will not affect the obligation of the Company to effect demand registration statements for the Acquiror under this Section 7; provided that, if the managing underwriters of such offering advise the Company in writing that in their opinion the number of shares of Company Common Stock requested to be included in such registration exceeds the number which can be sold in such offering, then the amount of securities to be offered for the account of the Acquiror may be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter; provided that notwithstanding any limit on the number of registration statements the Company is obligated to file under Section 7 hereof, the Company will, if requested by Acquiror, file a registration statement with respect to those shares not included in such offering in a shelf registration statement under Rule 415 under the Securities Act. In connection with any registration pursuant to this Section 7, the Company and Acquiror will provide each other and any underwriter of the offering with customary representations, warranties, covenants, indemnification, and contribution in connection with such registration. 8. Standstill. Acquiror hereby agrees that, in connection with any registered underwritten offering of Company Common Stock, Acquiror shall not, and shall not permit any of its subsidiaries to, sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of, any Company Common Stock (or other securities of the Company) held by Acquiror or any of its subsidiaries (other than those shares of Company Common Stock, if any, included in the registration) for a period specified by the representative of the underwriters of Company Common Stock not to exceed one hundred eighty (180) days following the effective date of the applicable registration statement of the Company filed under the Securities Act; provided however that the Company's officers, directors and stockholders required to file reports under Section 16 of the Exchange Act are so limited. The Acquiror agrees to, and agrees to cause its subsidiaries to, execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters of Company Common Stock which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Company Common Stock, the Acquiror shall, and shall cause each of its subsidiaries to, provide, within ten (10) days of such request, such information as may be reasonably required by the Company or such representative in connection with the completion of any public offering of the Company Common Stock pursuant to a registration statement filed under the Securities Act. The Company may impose stop-transfer instructions with respect to the shares of Company Common Stock (or other securities of the Company) subject to the foregoing restriction until the end of said one hundred eighty (180) day period. The Acquiror agrees that any transferee of any shares of Company Common Stock in excess of 25% in aggregate of the total Company Shares subject to this Agreement shall be bound by this paragraph. -5- 6 9. Adjustment Upon Changes in Capitalization. Without limiting any restriction on the Company contained in this Agreement or in the Merger Agreement, in the event of any change in Company Common Stock by reason of stock dividends, splitups, mergers (other than the Merger), recapitalizations, combinations, exchange of shares or the like, the type and number of shares or securities subject to the Company Option, and the purchase price per share provided in Section 1, shall be adjusted appropriately to restore to Acquiror its rights hereunder, including the right to purchase from the Company (or its successors) shares of Company Common Stock representing 19.9% of the outstanding Company Common Stock for the aggregate Exercise Price calculated as of the date of this Agreement as provided in Section 1. 10. Restrictive Legends. Each certificate representing shares of Company Common Stock issued to Acquiror hereunder shall include a legend in substantially the following form: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. It is understood and agreed that the legend shall be removed in its entirety by delivery of substitute certificate(s) without such legend if Acquiror shall have delivered to the Company a copy of a letter from the staff of the Securities and Exchange Commission, or an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such legend is not required for purposes of the Securities Act. In addition, such certificates shall bear any other legend as may be required by law. Certificates representing shares sold in a registered public offering pursuant to Section 7 shall not be required to bear the legend set forth in this Section 10. 11. Binding Effect, No Assignment, No Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as expressly provided for in this Agreement, neither this Agreement nor the rights or the obligations of either party hereto are assignable, except by operation of law, or with the written consent of the other party. Nothing contained in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective permitted assigns any rights or remedies of any nature whatsoever by reason of this Agreement. Any Company Shares sold by a party in compliance with the provisions of Section 7 shall, upon consummation of such sale, be free of the restrictions imposed with respect to such shares by this Agreement, unless and until such party shall repurchase or otherwise become the beneficial owner of such shares, and any transferee of such shares shall not be entitled to the registration rights of such party. 12. Specific Performance. The parties hereby acknowledge and agree that the failure of the Company to perform its agreement and covenants hereunder will cause irreparable injury to Acquiror for which damages, even if available, will not be an adequate remedy. Accordingly, the Company hereby consents to the issuance of injunctive relief by any court of competent -6- 7 jurisdiction to compel performance of the Company's obligations and to the granting by any such court of the remedy of specific performance of its obligations hereunder. 13. Entire Agreement. This Agreement and the Merger Agreement (including the exhibits and schedules thereto) constitute the entire agreement of the parties, and supersedes all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof. 14. Further Assurances. Each party will execute and deliver all such further documents and instruments and take all such further action as may be necessary in order to consummate the transactions contemplated hereby. 15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect. If any court or other competent authority holds any provisions of this Agreement to be null, void or unenforceable, the parties hereto shall negotiate in good faith the execution and delivery of an amendment to this Agreement in order, as nearly as possible, to effectuate, to the extent permitted by law, the intent of the parties hereto with respect to such provision and the economic effects thereof. If for any reason any such court or regulatory determines that Acquiror is not permitted to acquire the full number of shares of Company Common Stock provided in Section 1 hereof (as the same may be adjusted), it is the express intention of the Company to allow Acquiror to acquire such lesser number of shares as may be permissible, without any amendment or modification hereof. Each party agrees that, should any court or other competent authority hold any provision of this Agreement or part hereof to be null, void or unenforceable, or order any party to take any action inconsistent herewith, or not take any action required herein, the other party shall not be entitled to specific performance of such provision or part hereof or to any other remedy, including without limitation money damages, for breach hereof or of any other provision of this Agreement or part hereof as the result of such holding or order. 16. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given in the manner provided in the Merger Agreement. 17. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. 18. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 19. Counterparts. This Agreement may be executed in multiple counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. -7- 8 20. Expenses. Except as otherwise expressly provided herein or in the Merger Agreement, all costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such expenses. 21. Amendments, Waiver. This Agreement may be amended by the parties hereto and the terms and conditions hereof may be waived only by an instrument in writing signed on behalf of the parties hereto or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance. 22. Extension of Time Periods. The time periods for exercise of certain rights under Sections 2 shall be extended (i) to the extent necessary to obtain all regulatory approvals for the exercise of such rights, and for the expiration of all statutory waiting periods and (ii) to the extent necessary to avoid any liability under Section 16(b) of the Exchange Act by reason of such exercise. 23. Replacement of Company Option. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Agreement, if mutilated, the Company will execute and deliver a new Agreement of like tenor and date. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written. KULICKE AND SOFFA INDUSTRIES, INC. By /s/ C. Scott Kulicke ---------------------------------- C. Scott Kulicke CERPROBE CORPORATION By /s/ C. Zane Close ---------------------------------- C. Zane Close -8- -----END PRIVACY-ENHANCED MESSAGE-----