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Agreement & Plan Of Reorganization

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Sectors: Electronics and Miscellaneous Technology
Governing Law: California , View California State Laws
Effective Date: April 05, 2000
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AGREEMENT AND PLAN OF REORGANIZATION


BY AND AMONG


ADVANCED ENERGY INDUSTRIES, INC.


AE CAL MERGER SUB, INC.


AND


NOAH HOLDINGS, INC.


DATED AS OF APRIL 5, 2000


TABLE OF CONTENTS


PAGE


ARTICLE 1. DEFINITIONS 4


ARTICLE 2. THE MERGER 6
2.1 The Basic Transaction 6
2.2 The Closing 6
2.3 Effective Time 6
2.4 Articles of Incorporation and Bylaws 6
2.5 Directors and Officers of the Surviving Corporation 6


ARTICLE 3. CONVERSION AND EXCHANGE OF SECURITIES 6
3.1 Merger Sub Stock 6
3.2 Company Stock; Options. 6
3.3 Exchange of Certificates Representing Company Shares.8
3.4 Escrow Agreement. 10
3.5 Lost Certificates 10


ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 11
4.1 Organization and Standing. 11
4.2 Capitalization. 11
4.3 Authorization; Enforceability; No Violation. 12
4.4 No Consents 13
4.5 Compliance With Laws 13
4.6 Financial Statements. 13
4.7 Absence of Litigation, Orders, Judgments. 14
4.8 Absence of Certain Changes 14
4.9 Taxes 15
4.10 Contracts 15
4.11 Intellectual Property. 15
4.12 Employee Benefit Plans. 16
4.13 No Brokers 17
4.14 Opinion of Financial Advisor 17
4.15 Parent Stock Ownership 17
4.16 Environmental Matters. 17
4.17 Insurance 18
4.18 Proprietary Information and Inventions and
Confidentiality Agreement 18
4.19 Accuracy of Documents and Information 18
4.20 Offices; Capital Equipment 19


ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB 19
5.1 Organization and Standing. 19


i


5.2 Capitalization. 20
5.3 Authorization; Enforceability; No Violation. 20
5.4 No Consents 21
5.5 Parent Reports. 21
5.6 No Brokers 22
5.7 No Reacquisition of Company Shares 22
5.8 Investment Company 22
5.9 Certain Tax Matters 22


ARTICLE 6. COVENANTS 23
6.1 Publicity 23
6.2 Registration Statement. 23
6.3 Listing Application 24
6.4 Expenses 24
6.5 Takeover Statute 24


ARTICLE 7. CONDITIONS TO CLOSING 25
7.1 Conditions to Each Party's Obligation to Effect the
Merger 25
7.2 Conditions to Obligation of the Company to Effect the
Merger 25
7.3 Conditions to Obligation of Parent and Merger Sub to
Effect the Merger 26


ARTICLE 8. TERMINATION 27
8.1 Termination by Either Parent or the Company 27
8.2 Extension; Waiver 27


ARTICLE 9. GENERAL PROVISIONS 27
9.1 Survival of Representations, Warranties and Covenants27
9.2 Notices 27
9.3 Assignment, Binding Effect 28
9.4 Entire Agreement 29
9.5 Amendment 29
9.6 Governing Law 29
9.7 Counterparts 29
9.8 Headings 29
9.9 Interpretation 29
9.10 Waivers 29
9.11 Incorporation of Exhibits 29
9.12 Severability 29
9.13 Enforcement of Agreement 30
9.14 Indemnity 30


ii


AGREEMENT AND PLAN OF REORGANIZATION


AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT"), dated as of April 5, 2000, is made by and among Advanced Energy Industries, Inc., a Delaware corporation ("PARENT"), AE Cal Merger Sub, Inc., a California corporation and a wholly-owned subsidiary of Parent ("MERGER SUB"), and Noah Holdings, Inc., a California corporation (the "COMPANY").


RECITALS


A. The Boards of Directors of Parent and the Company each have determined that a business combination between Parent and the Company would enable the companies to achieve long-term strategic and financial benefits and, accordingly, is in the best interests of their respective stockholders. Each of such Boards of Directors desires to effect the Merger (as defined herein), on the terms and subject to the conditions set forth herein.


B. It is intended that the Merger qualify as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), for federal income tax purposes.


C. It is intended that the Merger be accounted for as a pooling of interests for financial accounting purposes.


D. Parent has incorporated and organized Merger Sub solely to facilitate the Merger.


NOW, THEREFORE, in consideration of the mutual covenants and subject to the terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE 1.
DEFINITIONS


"AGREEMENT" has the meaning set forth in the preface above.


"APB NO. 16" means the Accounting Principles Board Opinion Number 16.


"CALIFORNIA FILING MATERIALS" has the meaning set forth in 2.3 below.


"CALIFORNIA LAW" means the Corporation Code of the State of California, as amended.


"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.


"CERTIFICATE" has the meaning set forth in 3.2(b) below.


"CLOSING" has the meaning set forth in 2.2(a) below.


"CLOSING DATE" has the meaning set forth in 2.2 below.


"CLOSING PRICE" means $59.41.


1


"CODE" has the meaning set forth in the recitals above.


"COMMISSION" means the Securities and Exchange Commission.


"COMPANY" has the meaning set forth in the preface above.


"COMPANY BENEFIT PLANS" means all employee benefit plans as defined in Section 3.3 of ERISA and any other plan, contract, program, policy or benefit arrangements covering employees or former employees of the Company and all employee agreements providing compensation, severance or other benefits to any employee or former employee of the Company.


"COMPANY BOARD" means the Board of Directors of the Company.


"COMPANY CONTRACT" means any material agreement, contract and commitment, whether written or oral, to which the Company is a party or by which it is bound.


"COMPANY DISCLOSURE SCHEDULE" means the disclosure schedule delivered by Company at or prior to the execution hereof to Parent.


"COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on or change in the business, results of operations or financial condition of the Company and Company Subsidiary, taken as a whole.


"COMPANY OPTIONS" has the meaning set forth in 3.2(d)(i) below.


"COMPANY PREFERRED SHARES" means any issued or outstanding share of preferred stock of the Company.


"COMPANY REAL PROPERTIES" means all real property ever owned, leased or occupied by the Company, any Company Subsidiary or any Predecessor.


"COMPANY SHARE" means any share of the common stock of Noah Holdings, Inc.


"COMPANY SHAREHOLDERS" means the holders of Company Shares as of the Closing Date.


"COMPANY SUBSIDIARY" has the meaning set forth in 4.1(b) below.


"COPYRIGHTS" means all of Company's copyrights, copyrightable works, semiconductor topography and mask work interests, including, without limitation, all rights of authorship, use, publication, reproduction, distribution, performance, transformation, moral rights and ownership of copyrightable works, semiconductor topography works and mask works, and all rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright, semiconductor topography and mask work conventions.


"EFFECTIVE DATE" means the date upon which this Agreement has been executed by each of the parties.


"EFFECTIVE TIME" has the meaning set forth in 2.3 below.


2


"ENFORCEABILITY EXCEPTIONS" has the meaning set forth in 4.3(d) below.


"ENVIRONMENTAL REQUIREMENTS" means any applicable laws, regulations, ordinances or other provisions having the force or effect of law, or any judicial, governmental, or administrative orders, requests, or determinations, or any common law requirements relating to the protection of human health or the environment (both natural and workplace), including without limitation any Environmental Requirements concerning (A) the use, generation, treatment, storage, transportation, handling or disposal of Hazardous Materials, (B) the control of soil, surface or groundwater pollution products, (C) air quality and emission standards, or (D) health, safety and hazard communication matters. Environmental Requirements include, without limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Toxic Substances Control Act, the Clean Air Act, SWDA, the Atomic Energy Act, the Federal Food Drug and Cosmetic Act, and equivalent state and local ordinances and statutes and ordinances in countries other than the United States of America.


"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.


"ERISA AFFILIATE" means any business or entity which is a member of the same "controlled group of corporations," under "common control" or an "affiliated service group" with an entity within the meanings of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with the entity under Section 414(o) of the Code, or is under "common control" with the entity, within the meaning of Section 4001(a)(14) of ERISA, or any regulations promulgated or proposed under any of the foregoing Sections.


"ESCROW AGENT" means Commercial Escrow Services, Inc. or any successor thereto appointed in accordance with the Escrow Agreement.


"ESCROW AGREEMENT" has the meaning set forth in 3.4(a) below.


"ESCROW AMOUNT" has the meaning set forth in 3.4(a) below.


"ESCROW FUNDS" has the meaning set forth in 3.4(a) below.


"ESCROW SHARES" has the meaning set forth in 3.4(a) below.


"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.


"EXCHANGE AGENT" has the meaning set forth in 3.3(a) below.


"EXCHANGE FUND" has the meaning set forth in 3.3(a) below.


"EXCHANGE RATIO" has the meaning set forth in 3.2(a) below.


"FINANCIAL STATEMENTS" has the meaning set forth in 4.6 below.


"GAAP" means United States generally accepted accounting principles, consistently applied.


3


"HAZARDOUS MATERIALS" means any toxic, injurious or hazardous materials, substances or wastes, toxic pollutants or contaminants, including petroleum products, crude oil or any by-products or derivatives thereof as any of the foregoing terms are defined in federal, state and local laws applicable to the Company or Parent, as the case may be, but does not include commercially available office cleaning or janitorial supplies.


"INTERIM FINANCIAL STATEMENTS" has the meaning set forth in 4.6 below.


"IRS" means the federal Internal Revenue Service.


"ISOS" has the meaning set forth in 3.2(d)(iii) below.


"ISSUED PATENTS" means any and all of Company's issued patents, reissue or reexamination patents, revivals of patents, utility models, certificates of invention, registrations of patents, or extensions thereof, regardless of country or formal name.


"LETTER OF TRANSMITTAL" has the meaning set forth in 3.3c below.


"MERGER CERTIFICATES" has the meaning set forth in 3.3(a) below.


"MERGER SUB" has the meaning set forth in the preface above.


"MERGER" has the meaning set forth in 2.1 below.


"NON-DISCLOSURE AGREEMENT" means the Non-Disclosure Agreement, dated March 12, 1999 between the Company and Parent.


"PARENT" has the meaning set forth in the preface above.


"PARENT BOARD" means the Board of Directors of Advanced Energy Industries, Inc.


"PARENT DISCLOSURE SCHEDULE" means the disclosure schedule delivered by Parent at or prior to the execution hereof to the Company.


"PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on or change in the business, results of operations or financial condition of Parent and its Subsidiaries, taken as a whole.


"PARENT OPTIONS" means all options to acquire Parent Common Stock granted by Parent.


"PARENT PREFERRED STOCK" means the 1,000,000 authorized shares of Parent preferred stock, par value $0.001 per share.


"PARENT REPORTS" means the reports, forms, registrations, schedules, statements and other documents required to be filed by Parent with the Commission.


"PARENT SHARE" means any share of the voting common stock of Advanced Energy Industries, Inc.


4


"PATENT APPLICATIONS" means any of Company's patent rights, including, without limitation, all United States and foreign utility and design patents, and all published or unpublished non-provisional and provisional patent applications, including, without limitation, any and all applications of additions, divisionals, continuations, continuations-in-part, reexaminations, substitutions, extensions, renewals, utility models, certificates of invention or reissues thereof or therefor, invention disclosures and records of invention abandoned patent applications.


"PATENTS" means Patent Applications and Issued Patents collectively.


"PERMITS" means all valid and current permits, licenses, orders, authorizations, registrations, approvals and other analogous instruments.


"PERSON" includes both natural persons and entities.


"POST CLOSING DIVIDENDS" has the meaning set forth in 3.3(f) below.


"PREDECESSOR" means any Person that owns or has ever owned, leased or occupied the Company Real Properties.


"QUALIFIED PLAN" means each Company Benefit Plan that is intended to be a "qualified plan" within the meaning of Section 401(a) of the Code, and either (i) the IRS has issued a favorable determination letter that has not been revoked, or (ii) an application for a favorable determination letter was timely submitted to the IRS for which no final action has been taken by the IRS as of the Closing Date.


"REGISTRATION STATEMENT" means a Registration Statement on Form S-3 under the Securities Act with respect to the Parent Shares transferred to the Company Shareholders in connection with the Merger.


"SECURITIES ACT" means the Securities Act of 1933, as amended.


"SHAREHOLDERS' REPRESENTATIVES" has the meaning set forth in 3.4(b) below.


"SPECIFIED POST-CLOSING DIVIDENDS" has the meaning set forth in 3.3(f) below.


"SUBSIDIARY" of a party means any corporation or other organization, whether incorporated or unincorporated, of which such party directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or any organization of which such party is a general partner.


"SUBSTITUTED OPTIONS" has the meaning set forth in 3.2(d)(i) below.


"SURVIVING CORPORATION" has the meaning set forth in 2.1 below.


"SWDA" means the Solid Waste Disposal Act, as amended.


5


"TRADEMARKS" means all of Company's trademarks, registered trademarks, applications for registration of trademark, service marks, registered service marks, applications for registration of service marks, trade names, registered trade names, and applications for registrations of trade names.


ARTICLE 2.
THE MERGER


2.1 THE BASIC TRANSACTION |HiddenPara|


. On the terms and subject to the conditions of this Agreement, at the Effective Time Merger Sub shall be merged with and into the Company in accordance with this Agreement, and the separate corporate existence of Merger Sub shall thereupon cease (the "Merger"). The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the "Surviving Corporation"), and shall become a wholly-owned subsidiary of Parent. The Merger shall have the effects specified in the California Law.


2.2. THE CLOSING |HiddenPara|


. Subject to the terms and conditions of this Agreement, the closing of the Merger (the "Closing") shall take place at the offices of Thelen, Reid & Priest LLP, San Francisco, California at 10:00 a.m., local time, on the date hereof (the "Closing Date").


2.3 EFFECTIVE TIME |HiddenPara|


. On the Closing Date, the parties hereto shall cause the Merger to be consummated by filing (i) an Agreement of Merger substantially in the form of Exhibit A and all related officer's certificates meeting the requirements of California Law (the "California Filing Materials") in the office of the Secretary of State of California, in accordance with the California Law. The Merger shall become effective at the time of filing of the California Filing Materials with the Secretary of State of California (the "Effective Time").


2.4 ARTICLES OF INCORPORATION AND BYLAWS |HiddenPara|


. The Articles of Incorporation and Bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the Articles of Incorporation and Bylaws of the Surviving Corporation, until duly amended in accordance with applicable law.


2.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION |HiddenPara|


. The directors and officers of Merger Sub immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation until their successors are duly appointed or elected in accordance with applicable law.


ARTICLE 3.
CONVERSION AND EXCHANGE OF SECURITIES


3.1 MERGER SUB STOCK |HiddenPara|


. At the Effective Time, each share of common stock of Merger Sub outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.


3.2 COMPANY STOCK; OPTIONS.


6


(a) CONVERSION OF SHARES. Each Company Share that is issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive 0.0577 Parent Shares (the "EXCHANGE RATIO").


(b) CANCELLATION OF COMPANY SHARES. At the Effective Time, as a result of the Merger and without any action on the part of the Company Shareholders, all Company Shares and any other issued and outstanding capital stock of the Company, including any Company Preferred Shares shall cease to be outstanding, shall be canceled, retired, and shall cease to exist, and each Company Shareholder shall thereafter cease to have any rights with respect to such Company Shares, except the right to receive upon the surrender of a certificate (a "CERTIFICATE") representing such Company Shares (i) the number of Parent Shares determined in accordance with this Section 3.2, and (ii) cash, without interest, payable (A) in lieu of any fractional Parent Shares, in accordance with Section 3.3(b), and (B) Specified Post-Closing Dividends, in accordance with Section 3.3(f).


(c) TREASURY SHARES AND SHARES HELD BY SUBSIDIARIES. At the Effective Time, there are no Company Shares held in the Company's treasury or held by a Company Subsidiary.


(d) OPTIONS.


(i) At the Effective Time, as a result of the Merger and without any action on the part of holder thereof, the options to purchase (i) 500,000 Company Shares granted by the Company to Peter Adams and (ii) 200,000 Company Shares granted by the Company to Duane Kogler, in each case prior to the Effective Time (collectively, "COMPANY OPTIONS") shall be assumed by Parent and shall be converted into options to purchase Parent Common Stock (collectively, "Substituted Options"). Any and all other outstanding options and warrants to purchase Company Shares and similar rights, and any and all Company stock option plans, shall be terminated immediately prior to the Effective Time and none of Parent, the Company and the Surviving Corporation shall have any further obligation with respect thereto.


(ii) Subject to subsection 3.2(d)(iii) below, (A) the number of Parent Shares underlying a Substituted Option shall be equal to the number of Company Shares underlying the subject Company Option multiplied by the Exchange Ratio and rounded to the nearest whole number, (B) the exercise price per share of a Substituted Option shall be adjusted proportionately such that the aggregate exercise price under the Substituted Options granted to each of the Persons set forth in clause (i) above shall remain substantially unchanged, and (C) each Substituted Option shall be exercisable on the same terms and subject to the same conditions as had been applicable to the related Company Option, except to the extent the number of shares and exercise price per share have been adjusted pursuant to (A) and (B), respectively, of this subsection 3.2(d)(ii).


(iii) It is the intention of the parties that Company Options that qualified as incentive stock options, within the meaning of Section 422 of the Code ("ISOS"), immediately prior to the Effective Time, be converted, when assumed by Parent, into Substituted Options that qualify as ISOs immediately following the Effective Time, to the extent permitted by Section 422 of the Code and applicable terms of the Company Option Plans. In furtherance of such intention, the formulae, terms and conditions set forth in subsection 3.2(d)(ii) above may


7


be applied to, or modified for, such Substituted Options as deemed reasonably necessary by Parent, so long as any such application or modification does not reduce the benefit of the Substituted Option to the holder thereof.


(iv) Within 45 days after the Effective Time, Parent shall use reasonable efforts to file with the Commission a Registration Statement on Form S-3 or Form S-8, as determined by Parent in its sole discretion, relating to the issuance of the Parent Shares underlying the Substituted Options or shall cause such Parent Common Stock to be included in an effective Registration Statement on Form S-8 relating to one or more of Parent's stock option plans (collectively, "Parent Option Plans"). So long as any Substituted Options remain outstanding, Parent shall use its best efforts to maintain the effectiveness of any Registration Statement or Statements relating to the Substituted Options (and to maintain the current status of the prospectus or prospectuses related thereto). At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of Parent Shares for delivery upon exercise of the Substituted Options.


3.3 EXCHANGE OF CERTIFICATES REPRESENTING COMPANY SHARES.


(a) As of the Effective Time, Parent shall deposit, or shall cause to be deposited, with an exchange agent reasonably acceptable to the Company (the "EXCHANGE AGENT"), for the benefit of the Company Shareholders, for exchange (or to be placed in escrow) in accordance with this Article 3, (i) certificates representing the Parent Shares to be issued in connection with the Merger ("MERGER CERTIFICATES"), and (ii) Parent's good faith estimate of the cash in lieu of fractional shares expected to be payable in connection with the Merger. Such cash and Merger Certificates are referred to herein as the "Exchange Fund."


(b) No fractional Parent Shares shall be issued pursuant hereto. In lieu of the issuance of any fractional share of Parent Common Stock, cash will be paid in respect of any fractional share of Parent Common Stock that would otherwise be issuable and the amount of such cash shall be equal to such fractional propo
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