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Agreement And Plan of Reorganization

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Sectors: Electronics and Miscellaneous Technology
Governing Law: New Jersey, View New Jersey State Laws
Effective Date: June 01, 1998
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EXHIBIT 2.1


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AGREEMENT AND PLAN OF REORGANIZATION


BY AND AMONG


ADVANCED ENERGY INDUSTRIES, INC.,


WARPSPEED, INC.


AND


RF POWER PRODUCTS, INC.,


DATED AS OF JUNE 1, 1998


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AGREEMENT AND PLAN OF REORGANIZATION


AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT"), dated as of June 1, 1998, is made by and among Advanced Energy Industries, Inc., a Delaware corporation ("PARENT"), Warpspeed, Inc., a New Jersey corporation and a wholly owned subsidiary of Parent ("MERGER SUB"), and RF Power Products, Inc., a New Jersey corporation (the "COMPANY").


R E C I T A L S


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
THE MERGER


1.1. THE BASIC TRANSACTION. On the terms and subject to the conditions of this Agreement, at the Effective Time (as defined in Section 1.3), 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 New Jersey Business Corporation Act (the "NJBCA").


1.2. THE CLOSING. Subject to the terms and conditions of this Agreement, the closing of the Merger (the "CLOSING") shall take place (a) at the offices of Thelen, Reid & Priest LLP, New York, New York at 10:00 a.m., local time, on the first business day immediately following the day on which the last to be fulfilled or waived of the conditions set forth in Article 6 shall be completely fulfilled or waived in accordance herewith, or (b) at such other time, date or place as Parent and the Company may agree. The date on which the Closing occurs is hereinafter referred to as the "CLOSING DATE."


1.3. EFFECTIVE TIME. On the Closing Date, a Certificate of Merger meeting the requirements of Section 14A:10-4.1 of the NJBCA shall be executed and filed in the office of the New Jersey Secretary of State, in accordance with the NJBCA. The Merger shall become effective at (a) the time of filing of the Certificate of Merger with the New Jersey Secretary of State or (b) such later time as agreed by the parties hereto and designated in the Certificate of Merger as the effective time of the Merger (the "EFFECTIVE TIME").


1.4. CERTIFICATE OF INCORPORATION AND BY-LAWS. The Certificate of Incorporation and By-laws of Merger Sub in effect immediately prior to the Effective Time shall be the Certificate of Incorporation and By-laws of the Surviving Corporation, until duly amended in accordance with applicable law.


1.5. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. 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; and Joseph Stach, president and chief executive officer of the Company, also shall become an officer of the Surviving Corporation.


ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES


2.1. MERGER SUB STOCK. At the Effective Time, each share of common stock, par value $0.01 per share, 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, par value $0.01 per share, of the Surviving Corporation.


2.2. COMPANY STOCK; OPTIONS.


(a) EXCHANGE RATIO. At the Effective Time, each share of common stock,
par value $0.01 per share, of the Company ("COMPANY COMMON STOCK") that is
issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive the number of shares of
common stock, par value $0.001 per share, of Parent (the "PARENT COMMON
STOCK") that is equal to 3,750,000 divided by the number of shares of
Company Common Stock issued and outstanding immediately prior to the
Effective Time (the "EXCHANGE RATIO"); provided, however, that (A) if the
Closing Price (as defined in this Section 2.2) is less than or equal to
$12.11, then the Exchange Ratio shall be the result obtained by dividing
$3.74 by the Closing Price, but in no event shall the Exchange Ratio
computed pursuant to this clause (A) be greater than 4,000,000 divided by
the number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (the "EFFECTIVE TIME SHARE NUMBER")
and (B) if the Closing Price is greater than or equal to $16.39, the
Exchange Ratio shall be the result obtained by dividing, $5.06 by the
Closing Price, but in no event shall the Exchange Ratio computed pursuant to
this clause (B) be less than 3,500,000 divided by the Effective Time Share
Number. "CLOSING PRICE" means the average closing price of the Parent Common
Stock, as reported in The Wall Street Journal, Eastern Edition, for each of
the 10 consecutive Trading Days immediately preceding the third Trading Day
prior to the Stockholders Meeting (as defined in Section 5.4). "TRADING DAY"
means a day on which trading is conducted on the Nasdaq National Market.


(b) CANCELLATION OF COMPANY COMMON STOCK. At the Effective Time, as a
result of the Merger and without any action on the part of the holders
thereof, all shares of Company Common Stock shall cease to be outstanding,
shall be canceled and retired and shall cease to exist, and each holder of
shares of Company Common Stock shall thereafter cease to have any rights
with respect to such shares of Company Common Stock, except the right to
receive upon the surrender of a certificate (a "CERTIFICATE") representing
such shares of Company Common Stock (i) the number of shares of Parent
Common Stock determined in accordance with this Section 2.2, and (ii) cash,
without interest, payable (A) in lieu of any fractional shares of Parent
Common Stock, in accordance with Section 2.3(b), and (B) as Specified
Post-Closing Dividends (as defined in Section 2.3), in accordance with
Section 2.3(f).


(c) TREASURY SHARES AND SHARES HELD BY SUBSIDIARIES. At the Effective
Time, as a result of the Merger and without any action on the part of
Parent, Merger Sub or the Company, any and all shares of Company Common
Stock issued and held in the Company's treasury or held by a Subsidiary of
the Company shall cease to be outstanding, shall be canceled and retired
without payment of any consideration therefor and shall cease to exist.


(d) OPTIONS.


(i) At the Effective Time, as a result of the Merger and without any
action on the part of holder thereof, each option to purchase Company
Common Stock granted by the Company


(collectively, "COMPANY OPTIONS") under one of its stock option plans
(collectively, "COMPANY OPTION PLANS") that remains outstanding and
unexercised as of the Effective Time, whether or not vested or
exercisable, shall be assumed by Parent and shall be converted into an
option to purchase Parent Common Stock (collectively, "SUBSTITUTED
OPTIONS").


(ii) Subject to subsection 2.2(d)(iii) below, (A) the number of
shares of Parent Common Stock underlying a Substituted Option shall be
equal to the number of shares of Company Common Stock 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 equal to the exercise price of the subject
Company Option divided by the Exchange Ratio and rounded to the nearest
cent, 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 2.2(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 2.2(d)(ii) above may 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) On or prior to the Effective Time, Parent shall file with the
Securities and Exchange Commission (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 Common Stock
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 shares of Parent Common Stock for delivery upon
exercise of the Substituted Options.


2.3. EXCHANGE OF CERTIFICATES REPRESENTING COMPANY COMMON STOCK.


(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 holders of Company Common Stock,
for exchange in accordance with this Article 2, (i) certificates
representing the shares of Parent Common Stock 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 shares of Parent Common Stock 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 proportion of the Closing Price. No interest will
be paid or accrued on the cash payable to holders of shares of Company
Common Stock.


(c) Promptly after the Effective Time, Parent shall cause the Exchange
Agent to mail to each holder of record of Company Common Stock (i) a letter
of transmittal, in a form and having such


provisions as Parent may reasonably specify ("LETTER OF TRANSMITTAL"), which
shall advise the holder that delivery of Merger Certificates shall be
effected, and risk of loss and title to such holder's shares of Company
Common Stock shall pass, only upon delivery of the Certificates representing
such shares to the Exchange Agent, and (ii) instructions for use in
effecting the surrender of such Certificates in exchange for Merger
Certificates and cash in lieu of fractional shares from the Exchange Fund.


(d) Upon surrender of a Certificate to the Exchange Agent for
cancellation, together with a duly executed and properly completed Letter of
Transmittal, (i) the holder of the shares of Company Common Stock
represented by such Certificate shall be entitled to receive in exchange
therefor from the Exchange Fund (A) a Merger Certificate representing that
number of whole shares of Parent Common Stock determined by multiplying the
number of shares of Company Common Stock represented by the Certificate by
the Exchange Ratio, and (B) a check representing (1) the amount of cash in
lieu of fractional shares of Parent Common Stock, if any, determined
pursuant to paragraph (b) of this Section 2.3, and (2) any Specified
Post-Closing Dividends, in each case less any applicable tax withholding,
and (ii) the Company Common Stock represented by the surrendered Certificate
shall thereupon be canceled.


(e) In the event of a transfer of ownership of Company Common Stock
which is not registered in the transfer records of the Company, a Merger
Certificate representing the proper number of shares of Parent Common Stock,
together with a check for the cash to be paid in lieu of fractional shares,
if any, may be issued to such transferee of such Company Common Stock, if
the Certificate representing such Company Common Stock is presented to the
Exchange Agent, accompanied by all documents, in form and substance
reasonably satisfactory to Parent and the Exchange Agent, required to
evidence and effect such transfer of Company Common Stock and to evidence
that any applicable stock transfer taxes have been paid. There shall be no
transfers on the transfer records of the Company, at or after the Effective
Time, of shares of Company Common Stock which were outstanding immediately
prior to the Effective Time.


(f) Notwithstanding any other provisions of this Agreement, no dividends
or other distributions declared after the Effective Time on Parent Common
Stock ("POST-CLOSING DIVIDENDS") shall be paid with respect to any shares of
Company Common Stock represented by a Certificate until such Certificate is
surrendered for exchange as provided herein. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of Parent
Common Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of Post-Closing Dividends with a record date
after the Effective Time theretofore payable with respect to such whole
shares of Parent Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon ("SPECIFIED POST-CLOSING
DIVIDENDS"), and (ii) at the appropriate payment date, the amount of
Post-Closing Dividends with a record date after the Effective Time but prior
to surrender and a payment date subsequent to surrender payable with respect
to such whole shares of Parent Common Stock, less the amount of any
withholding taxes which may be required thereon.


(g) Certificates surrendered for exchange by any person that is an
"affiliate" of the Company for purposes of Rule 145(c) under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), shall not be exchanged until
Parent has received a written agreement from such person as provided in
Section 5.11.


(h) One year after the Effective Time, the Exchange Agent shall deliver
to the Surviving Corporation any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Parent Common Stock)
that remains unclaimed by the former stockholders of the Company.
Thereafter, former stockholders of the Company that have not surrendered
their Certificates for exchange shall look to the Surviving Corporation for
delivery of Merger Certificates, cash in lieu of fractional shares and
unpaid Post-Closing Dividends which such former stockholder is entitled


to receive in respect of the Company Common Stock represented by the
theretofore unsurrendered Certificates, in each case, without any interest
thereon.


(i) None of Parent, the Company, the Surviving Corporation, the Exchange
Agent or any other person shall be liable to any former stockholder of the
Company for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.


2.4. LOST CERTIFICATES. In the event any Certificate shall have been lost, stolen or destroyed, upon the making and delivery of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the shares of Parent Common Stock and cash deliverable in respect thereof pursuant to this Agreement.


2.5. ADJUSTMENT OF EXCHANGE RATIO. In the event that, subsequent to the date of this Agreement but prior to the Effective Time, the outstanding shares of Parent Common Stock shall have been changed into a different number of shares or a different class as a result of a stock split, reverse stock split, stock dividend, subdivision, reclassification, combination, exchange, recapitalization or other similar transaction, the Exchange Ratio shall be appropriately adjusted.


ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY


Except as set forth in the disclosure schedule delivered at or prior to the execution hereof to Parent (the "COMPANY DISCLOSURE SCHEDULE") or the Company Reports (as defined in Section 3.6) filed by the Company prior to the date of this Agreement, the Company makes the following representations and warranties to Parent and Merger Sub, as of the date of this Agreement. The term "COMPANY MATERIAL ADVERSE EFFECT" has the meaning given to it in Section 8.14.


3.1. ORGANIZATION AND STANDING.


(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation,
(ii) has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted, and (iii)
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the failure to so qualify, or be
in good standing, would have a Company Material Adverse Effect.


(b) The Company does not have any Subsidiaries (as defined in Section
8.14) other than RFPP Foreign Sales Corporation, a corporation organized
under the United States Virgin Islands ("COMPANY SUBSIDIARY"). Company
Subsidiary (i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (ii) has all
requisite corporate power and authority to carry on its business as now
conducted, and (iii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the failure
to so qualify, or be in good standing, would have a Company Material Adverse
Effect. Company Subsidiary does not (x) own, operate or lease any real or
personal property, or (y) have any operations or engage in any activities
other than those related to coordination of export sales by the Company.


(c) Neither the Company nor Company Subsidiary has (i) filed or had
filed against it a petition in bankruptcy or a petition to take advantage of
any other insolvency act, (ii) admitted in writing its inability to pay its
debts generally, (iii) made an assignment for the benefit of creditors, (iv)
consented to the appointment of a receiver for itself or any substantial
part of its property, or (v) generally committed any act of insolvency
(including the failure to pay obligations as they become due) or bankruptcy.


3.2. CAPITALIZATION.


(a) The authorized capital stock of the Company consists of 19,000,000
shares of Company Common Stock. As of May 27, 1998, there were 12,149,220
shares of Company Common Stock issued and outstanding. From such date to the
date of this Agreement, no additional shares of capital stock of the Company
have been issued, except pursuant to the exercise of Company Options. As of
May 27, 1998, Company Options to acquire 712,123 shares of Company Common
Stock were outstanding. From such date to the date of this Agreement, no
additional Company Options have been granted.


(b) All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive or similar rights. Other than Company
Options, there are no existing and outstanding warrants, rights, options,
subscriptions, convertible securities or other agreements or commitments
which obligate the Company to issue, transfer or sell any shares of capital
stock of the Company or of the Company Subsidiary.


(c) Neither the Company nor Company Subsidiary has any outstanding
bonds, debentures, notes or other obligations pursuant to which the holders
thereof have the right to vote (or which are convertible into or exercisable
for securities having the right to vote) with the stockholders of the
Company on any matter.


3.3. AUTHORIZATION; ENFORCEABILITY; NO VIOLATION.


(a) The Company has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.


(b) Subject only to the approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company in accordance with
the NJBCA, all corporate action necessary on the part of the Company for the
execution, delivery and performance of this Agreement has been duly taken.


(c) This Agreement constitutes (assuming this Agreement is a valid and
legally binding obligation of Parent and Merger Sub) a valid and legally
binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity and
public policy considerations (the "ENFORCEABILITY EXCEPTIONS") and
compliance with the Industrial Site Recovery Act, N.J.S.A. Section 13:1K-6
ET SEQ. and its implementing regulations ("ISRA").


(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the
Certificate of Incorporation or the Bylaws of the Company, (ii) any statute,
rule, regulation, judicial, governmental, regulatory or administrative
decree, order or judgment applicable to the Company or Company Subsidiary,
or (iii) any agreement, lease, license, permit or other instrument to which
the Company is a party or to which any of its assets are subject, except
where any such breach, violation, default, termination or forfeiture would
not have or result in a Company Material Adverse Effect.


(e) There is no action, suit, proceeding or investigation pending or, to
the knowledge of the Company, threatened against the Company that questions
the validity of this Agreement or the right of the Company to enter into
this Agreement or to consummate the transactions contemplated hereby.


3.4. NO CONSENTS. No consent, approval, authorization, order, registration, qualification or filing of or with any court or any regulatory authority or any other governmental or administrative body is required on the Company's part for the consummation by it of the transactions contemplated by this Agreement, except (i) filings required in order to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), (ii) notices and filings required in order to comply with the Securities


Act, the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and state securities or "blue sky" laws, (iii) the filing of the Certificate of Merger with the New Jersey Secretary of State, and (iv) as may be required by ISRA.


3.5. COMPLIANCE WITH LAWS. Except where the failure to so comply would not have a Company Material Adverse Effect, the Company and Company Subsidiary (i) have all valid and current permits, licenses, orders, authorizations, registrations, approvals and other analogous instruments (collectively, "PERMITS"), and each Permit is in full force and effect, and (ii) have made all filings and registrations and the like, necessary or required by law to conduct their respective businesses as currently conducted. Neither the Company nor Company Subsidiary has received any governmental notice of any violation by such company of any laws, rules, regulation or orders applicable to their respective businesses. Except where the failure to comply would not have a Company Material Adverse Effect, (a) ne
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