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AGREEMENT OF MERGER
OF
TIGER ACQUISITION CORP.
AND
TENCOR INSTRUMENTS
This Agreement of Merger, dated as of the 30th day of April, 1997
("MERGER AGREEMENT"), by and among Tiger Acquisition Corp. ("MERGER SUB"), a
California corporation and a wholly owned subsidiary of KLA Instruments
Corporation, a Delaware corporation ("KLA"), and Tencor Instruments, a
California corporation ("TENCOR" or the "SURVIVING CORPORATION").
RECITALS
A. Tencor was incorporated in the State of California on January 28,
1977, and as of April 25, 1997 had 31,275,109 shares of its Common Stock, no par
value, outstanding ("TENCOR COMMON").
B. Merger Sub was incorporated in the State of California on
January 9, 1997, and on the date hereof has 1,000 shares of its Common Stock, no
par value, outstanding, all of which are owned by KLA.
C. KLA, Merger Sub and Tencor have entered into an Agreement and
Plan of Reorganization dated as of January 14, 1997 (the "REORGANIZATION
AGREEMENT") providing for certain representations, warranties, covenants and
agreements in connection with the transactions contemplated hereby. This Merger
Agreement and the Reorganization Agreement are intended to be construed together
to effectuate their purpose.
D. The shareholders of Tencor and Merger Sub and the Board of
Directors of KLA deem it advisable and in their mutual best interests and in the
best interests of the shareholders of Tencor and Merger Sub, respectively, that
Merger Sub be merged with and into Tencor (the "MERGER").
E. The Boards of Directors of KLA, Tencor and Merger Sub and the
shareholders of Merger Sub and Tencor have approved the Merger. The shareholders
of KLA have approved the issuance of shares of Common Stock, par value $0.001
per share, of KLA ("KLA COMMON") by virtue of the Merger.
AGREEMENTS
The parties hereto hereby agree as follows:
1. Merger Sub shall be merged with and into Tencor, and Tencor shall
be the Surviving Corporation.
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2. The Merger shall become effective at 4:30 p.m. California time on
April 30, 1997 (the "EFFECTIVE TIME").
3. As of the Effective Time, each outstanding share of Common Stock,
no par value, of Merger Sub shall be converted into and exchanged for one (1)
share of Common Stock, no par value, of the Surviving Corporation.
4. Upon the Effective Time of the Merger, each outstanding share of
Tencor Common shall be converted automatically into and exchanged for the right
to receive one (1) share of KLA Common ("MERGER CONSIDERATION"), except that all
shares of Tencor Common that are owned directly or indirectly by Tencor, KLA or
any subsidiary of Tencor or KLA shall be canceled, and no cash or securities of
KLA or other consideration shall be delivered in exchange therefor.
5. As of the Effective Time, all certificates representing shares of
Tencor Common, issued and outstanding immediately prior to the Effective Time,
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares of Tencor Common shall cease to have any rights with respect thereto
except the right to receive the appropriate portion of the Merger Consideration
upon surrender of such certificate.
6. Any shares ("DISSENTING SHARES") of any holder of Tencor Common
who has demanded and perfected appraisal rights for such shares in accordance
with the California General Corporation Law and who, as of the Effective Time,
has not effectively withdrawn or lost such appraisal rights, shall not be
converted into Merger Consideration but shall be converted into the right to
receive such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to the California General Corporation Law. If, after
the Effective Time, any Dissenting Shares shall lose their status as Dissenting
Shares, then as of the occurrence of the event which causes the loss of such
status, such shares shall be converted into Merger Consideration in accordance
with Section 4 hereof.
7. Notwithstanding any other term or provision hereof, no fraction
of a share of KLA Common will be issued by virtue of the Merger, but in lieu
thereof each holder of shares of Tencor Common who would otherwise be entitled
to a fraction of a share of KLA Common (after aggregating all fractional shares
of KLA Common to be received by such holder) shall receive from KLA an amount of
cash (rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of a share of KLA Common
for the ten most recent days that KLA Common has traded ending on the trading
day immediately prior to the Effective Time, as reported on the Nasdaq National
Market.
8. The conversion of Tencor Common as provided by this Merger
Agreement shall occur automatically at the Effective Time of the Merger without
action by the holders thereof. Each holder of Tencor Common shall thereupon be
entitled to receive Merger Consideration in accordance with Section 4 hereof.
Promptly after the Effective Time, such shareholder shall be entitled to receive
certificates that represent the number of shares of KLA Common Stock issuable to
such shareholder under this Merger Agreement upon surrender as set forth in the
Reorganization Agreement of such shareholder's certificates which immediately
prior to the Effective Time represented outstanding shares of Tencor Common
Stock.
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No dividends or other distributions on KLA Common declared or
made after the Effective Time shall be paid to the holder of any unsurrendered
certificate until the holder of record of such certificate shall surrender such
certificate. Subject to the effect, if any, of applicable laws, following
surrender of any certificate, there shall be delivered to the person entitled
thereto, without interest, the amount of dividends theretofore paid with respect
to the KLA Common so withheld as of any date subsequent to the Effective Time of
the Merger and prior to such date of delivery.
All Merger Consideration and cash paid in accordance with Section
7 hereof delivered upon the surrender for exchange of shares of Tencor Common in
accordance with the terms hereof shall be deemed to have been delivered in full
satisfaction of all rights pertaining to such Tencor Common. If, after the
Effective Time of the Merger, certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Section 8.
9. At the Effective Time of the Merger, the separate existence of
Merger Sub shall cease, and Tencor shall succeed, without other transfer, to all
of the rights and properties of Merger Sub and shall be subject to all the debts
and liabilities thereof in the same manner as if Tencor had itself incurred
them.
10. Upon the Merger becoming effective, the Articles of Incorporation
of the Surviving Corporation shall be amended in full to read as set forth in
Exhibit A attached hereto.
11. (a) Notwithstanding the approval of this Merger Agreement by the
shareholders of Tencor and Merger Sub, this Merger Agreement may be terminated
at any time prior to the Effective Time of the Merger by mutual agreement of the
Boards of Directors of KLA and Tencor, and the shareholders of Tencor.
(b) Notwithstanding the approval of this Merger Agreement by the
shareholders of Tencor and Merger Sub, this Merger Agreement shall terminate
forthwith in the event that the Reorganization Agreement shall be terminated as
therein provided.
(c) In the event of the termination of this Merger Agreement as
provided above, this Merger Agreement shall forthwith become void and there
shall be no liability on the part of Tencor, KLA or Merger Sub or their
respective officers or directors, except as otherwise provided in the
Reorganization Agreement.
(d) This Merger Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
(e) This Merger Agreement may be amended by the parties hereto
any time before or after approval hereof by the shareholders of Tencor and
Merger Sub, but, after such approval, no amendments shall be made which by law
require the further approval of such shareholders without obtaining such
approval. This Merger Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Merger Agreement as
of the date first written above.
TIGER ACQUISITION CORP.
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Xxxxxxx Xxxx, President
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Xxxx X. Xxxxx, Secretary
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TENCOR INSTRUMENTS
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Xxx X. Xxxxxxxx, President
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Xxxxxxxxx X. Xxxx, Secretary
