Commitments And Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Commitments

In March 2010, the Company entered into a building lease agreement in preparation for the expansion of our manufacturing operations in Singapore. The initial term of the lease is three years, and the lease is accounted for as an operating lease.

In July 2007, we capitalized a five-year lease agreement for a new phone system recorded as office equipment. The amortization of this phone system is included with depreciation expense.

In August 2008 and December 2009, we entered into agreements with a leasing company for the sale and leaseback of certain assets for an initial term of four years. The sale prices of these items were $6.8 million and $5.4 million in 2008 and 2009, respectively. There was no gain or loss from these transactions. Under these sale-leaseback arrangements, we have an option to purchase the assets back at the future current fair market value upon the expiration of the leases in 2012 and 2013, respectively. These leases are classified as operating leases in accordance with ASC Topic 840, Leases. In January 2009, we bought back assets with values totaling $1.3 million. We did not buy back any assets during the three and six month periods ended June 30, 2012. In April 2010, we bought back an asset with a value of $1.2 million. As of June 30, 2012, the minimum future lease payments to be made under these agreements were $2.7 million.

On May 10, 2012, we entered into a lease extension for the August 2008 transaction. The twenty-seven month extension is valued at $2.0 million and will expire on August 14, 2014.

Legal Proceedings

Ultratech, Inc. is a defendant in Dennis Rice v. Ultratech, Inc., et al., a class action lawsuit commenced on June 14, 2012 in the Superior Court of California, County of Santa Clara. The plaintiff alleges that the proposal in our proxy seeking approval to increase the authorized shares of common stock from 40 million to 80 million was misleading and incomplete and that the directors violated their fiduciary duties by making these misleading disclosures. The plaintiff sought to enjoin the stockholders’ vote on this proposal. On July 16, 2012, the Court held a hearing on plaintiff’s motion for a preliminary injunction and issued an order denying the plaintiff’s motion. While plaintiff’s motion for an injunction was denied, the action is still pending. We believe the action is without merit and we plan a vigorous defense.