Edgar Filing: AUGUST TECHNOLOGY CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant o

Filed by a Party other than the Registrant o

Check the appropriate box:
o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o	Definitive Proxy Statement
o	Definitive Additional Materials
ý	Soliciting Material Pursuant to §240.14a-12

August Technology Corporation
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
ý	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)		Title of each class of securities to which transaction applies:

	(2)		Aggregate number of securities to which transaction applies:

	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)		Proposed maximum aggregate value of transaction:

	(5)		Total fee paid:

o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:

		Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

Filed by August Technology Corporation

Pursuant to Rule 14a-12 Under the Securities Exchange Act of 1934

Subject Company: August Technology Corporation

Commission File No. 000-30637

AUGUST TECHNOLOGY CORPORATION

Transcript of July 27, 2005 Conference Call

At 10:00 a.m. CDT on July 27, 2005, August Technology Corporation held a conference call, discussing its 2005 second quarter financial results and its proposed merger with Rudolph Technologies, Inc. pursuant to an Agreement and Plan of Merger dated June 27, 2005 between August Technology Corporation, NS Merger Sub, Inc. and Rudolph Technologies, Inc. Below are excerpts from the transcript of this conference call. Three asterisks (* * *) indicate where discussion unrelated to the Merger and the Merger Agreement has been omitted.

Additional Information and Where to Find It

In connection with the proposed transaction, a registration statement of Rudolph Technologies, Inc., which will include a joint proxy statement of Rudolph and August, and other materials, will be filed with the SEC. WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT RUDOLPH, AUGUST AND THE PROPOSED TRANSACTION. Investors will be able to obtain free copies of the registration statement and joint proxy statement (when available) as well as other filed documents containing information about Rudolph and August at http://www.sec.gov, the SEC’s website. Free copies of Rudolph’s SEC filings may also be obtained at http://www.rudolphtech.com, and free copies of August’s SEC filings may be obtained from August’s website at http://www.augusttech.com.

Participants in the Solicitation

Rudolph, August and their respective executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from Rudolph’s stockholders or August’s shareholders with respect to the proposed transaction. Information regarding the officers and directors of Rudolph is included in its definitive proxy statement for its 2005 Annual Meeting filed with the SEC on April 22, 2005. Information regarding the officers and directors of August is included in its definitive proxy statement for its 2005 Annual Meeting filed with the SEC on April 29, 2005. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities holdings or otherwise, will be set forth in the registration statement and joint proxy statement and other materials to be filed with the SEC in connection with the proposed transaction.

FINAL TRANSCRIPT

Conference Call Transcript

AUGT - Q2 2005 August Technology Corporation Earnings Conference Call

Event Date/Time: Jul. 27. 2005 / 11:00AM ET

Event Duration: N/A

CORPORATE PARTICIPANTS

Jeff ODell

August Technology - CEO

Stan Piekos

August Technology - CFO

Lynn Davis

August Technology - President and COO

CONFERENCE CALL PARTICIPANTS

Avinash Kant

Adams Harkness - Analyst

Stuart Muter

RBC Capital Markets - Analyst

Drew Figdore

Piedaman and Company - Analyst

Ben Stiller

HS Capital - Analyst

Steve Ranier

Ranius Capital - Analyst

Howard Horowitz

Water Island Capital - Analyst

PRESENTATION

Operator

Welcome to this August Technology Second Quarter 2005 earnings results conference call. Today’s call is being recorded. At this time, for opening remarks and introductions I would like to turn the call over to CEO, Mr. Jeff O’Dell. Please go ahead, sir.

Jeff O’Dell: Thanks, Debbie. Good morning and welcome to August Technologies Second Quarter 2005 conference call. We thank each of you for joining our call and interest in our company. My name is Jeff O’Dell, Chairman, and CEO. With me today Stan Piekos, our CFO and Lynn Davis, President and COO. This morning, Stan will begin a review of our Q2 financial results and Lynn will comment on operational highlights. Then, Stan and I will bring you up to date on our merger transaction. Stan, please get us started.

Stan Piekos - August Technology - CFO

Thanks, and good morning. Before I get to the numbers, let me provide the following guidance; under the Safe Harbor provision of the Securities Reform Act, we would like to be clear that we will be making forward looking statements during this call and our actual results may differ materially from those projected in these statements. As you know, these statements may involve risk and uncertainties. Please refer to our press release of this morning and to our recently filed SEC documents in which we discuss risk factors and those that could effect these forward looking statements.

Our earnings release was issues this morning before the NASDAQ opening. If you haven’t received a copy, you can view it on our website at www.augusttech.com. Please note we are webcasting today’s conference call and will have a replay available on our website shortly after the conclusion of this call and continuing for two weeks following the call. If you have any questions regarding the press release, webcast, or replay, please call (952)820-0080 for assistance.

* * *

Now, let me turn the mike over to Lynn Davis, who will provide some additional comments on the operating results.

Lynn Davis - August Technology - President and COO

* * *

Stan Piekos - August Technology - CFO

* * *

Jeff, at this point, please provide some perspective on our corporate development activities also designed to further enhance share holder value.

Jeff O’Dell: Alright. Thanks, Stan. As Stan and Lynn indicate, we are proud of our performance being achieved by August Technology teams. We on our board also believe [indiscernible] especially in the front end wafer pad business, will accrue faster and our share holders will benefit even more from enhanced share holder value by merging with the right security partner.

During an extremely busy quarter, in customer and manufacturing operations, the August Technology teams also made significant progress on the merger front. I’ll ask Stan to recap that activity after I provide more perspective on our game plan.

We believe more strongly than ever in the name changing process we began well over one year ago to merge with the strategic partner with front end presence and complimentary solution to provide the path to more rapid near term growth, improved profitability, and enhance August Technology share holder value. When we first began to aggressively pursue this strategy about one year ago, we identified six companies; five public and one private that met our requirements. Rudolph Technologies and Nanometrix were included in that list.

Now, let’s look at the increasingly complex wafer fab processing applications and needs along with the ability to leverage operating costs, provided a compelling rationale to join together. Let’s review our complete list of merger partner criteria that we have shared with you in the past. We said we were looking for a partner with complimentary products and solutions and an established presence in the front-end wafer fab process applications, like litho, [C&P, and edge]. A partner like us, with growth momentum on their own and with whom, together we could deliver revenue synergy. A partner with no or minimal product and technology overlap, so that it would have to be rationalized with customers and employee bases A partner with whom we could gain leverage from common technology and development investments, like automation platforms and sales and service infrastructure and increasing costs of being a public company. A partner with a strong management team, operating in a similar culture, a culture of growth and innovation And, a partner offering consideration primarily in the form of common stock attractively valued to provide upside and ownership structure allowing August Technology shareholders to meaningfully participate in that enhanced shareholder value which we believe will accrue after successful integration. Rudolph Technology scores high on that list. The Rudolph brand is well established dating back to the first transistor development work at Bell Labs in the 40s. They invented Intervere and successfully anticipating and introducing leading in metrology and the fab and they have a direct presence in all major fabs around the world. There are 135 people in sales, application support, and service to provide the resource base to speed the adoption of our all-surface advanced macro inspection. And as evidenced by our success to date, the front-end is ready for August Technologies advanced macro inspection.

I am personally excited by the new opportunities that will resolve from the span of our combined reach across the breadth of key device manufacturing steps. From the mere wafer to probe mark tests and inspections. A reach unequaled, we believe, by any other inspection of metrology player. As a member of the new Rudolph board, management team, and strategic counsel, I’ll work to identify other [indiscernible] solutions to add to our existing suite.

We believe the new Rudolph brings together two highly complimentary product groups focused on a few high-growth niche markets in the $4 billion inspection and metrology market. In fact, we believe we will create the number 2 pure play in the industry participating right now on less than 20% of the market segments. We’ll use these strong niche positions to add more [indiscernible] products and solutions accelerating the growth of the new Rudolph.

Stan, please review where we are in the process of forming the new Rudolph.

Stan Piekos - August Technology - CFO

On June 27 we announced the termination of the Nanometrics merger transaction which investors never fully embraced as evidenced by the stock reaction. We never did really have an opportunity to bring that vision to the street.

We part friends with John Eaton and his team at Nanometrics with a mutual respect for each other’s business models and accomplishments.

On the same day, June 27, we announced the merger with Rudolph Technologies, and a team involving up to four leaders of the proposed new Rudolph immediately began the road show to explain the merits of the combination. We are encouraged by the response as evidenced only in part by the stock trading. August is up 21% since that date, Rudolph 15%.

Since a consideration involved in our transaction is primarily Rudolph stock and the exchange ratio was fixed on June 27 based on the art fact closing price of $13.77, August shareholders gain as a result of the subsequent increase in our tech price. The deal which was nominally priced by the market at $10.50 per August share on June 27 is, as of yesterday, worth $11.79 assuming minimal cash used as consideration, and $12.10 per share on an all-stock basis. And we believe the intrinsic value of the new Rudolph as an industry consolidator is just beginning to be appreciated by the investor community. We plan for much more extensive investor meetings between now and the close.

When we first met the Rudolph team on April 4 we literally hit the street running. Both teams approached the discussions in due diligence with a sense of urgency and dispatch and when it opened with sincere exchange of information to effectively plan. Neither company has to do a transaction. Both companies are driven by the shared vision of its energies and mutual benefits that’ll accrual from the critical mass of the new Rudolph.

Unlike others who have engaged an army of lawyers to affect a transaction, early on Rudolph team brought on a professional integration consultant to facilitate successful execution. And together we are aggressively moving forward.

Two weeks ago we applied for and received within two days HSR clearance. Within two weeks the draft FCC Form 4 with Q2 results will be filed. We expect to conclude with a favorable vote from both shareholder groups early in Q4. We are further encouraged that in the last month we have witnessed a growing base of common institutional shareholders i.e. holders of both August and Rudolph. We believe they will be particularly supportive of this merger opportunity.

We also recognize there are others who do not want to see this transaction completed. August Technology management and its board are prepared to take necessary actions to preclude inappropriate interference with the Rudolph merger.

Jeff ODell - August Technology - CEO

Stan, on that note, let me add a key point here. About three years ago as the company was beginning to explore the front-end market opportunity, KLA approached us about an acquisition. Our board responded that we would consider a possible acquisition at a particular evaluation. Both companies agreed to work together to achieve that price objective. After signing a confidentiality agreement KLA ultimately reduced its evaluation by more than half. We ended discussions then and moved forward successfully implementing our front-end strategy. Given this history and KLA’s recent refusal to execute a confidentiality agreement, we have no reason to believe that any discussions at this point would resolve in a different outcome.

Debbie, we’re now prepared to take questions from the participants.

QUESTION AND ANSWER

Operator

Thank you, gentlemen. [OPERATOR INSTRUCTIONS] We’ll take our first question today from Avinash Kant at Adams Harkness.

* * *

Avinash Kant - Adams Harkness - Analyst

And the final question, of course, intends of the progress with merging with Rudolph Technologies; you think everything is on track to kind of finish it by early Q4?

Stan Piekos - August Technology - CFO

Both teams are cooperating beautifully. Integration plans going on. We’re going to drive this one home early in Q4 of this year.

Avinash Kant - Adams Harkness - Analyst

Have you been approached by KLA recently?

Stan Piekos - August Technology - CFO

We have had no discussions with KLA.

Operator

[OPERATOR INSTRUCTIONS] We’ll take our next question from Stuart Muter at RBC Capital Markets.

* * *

Stuart Muter - RBC Capital Markets - Analyst

Right. And finally the last question, what do you guys mean by inappropriate interference?

Jeff ODell - August Technology - CEO

I guess what it means is-and the converse of that is you can see what happens when two parties get together and sincerely talk and put together a vision and a game plan to move forward and merge. What we want to make sure is that there’s a sincerity in any offers that are being made out there in terms of what’s being done.

Stan Piekos - August Technology - CFO

And truly an interest in doing a merger transaction getting it done. We did say that we are concerned that others in the field may be concerned by not seeing a transaction done here and we want to make sure we in any way stop those inappropriate actions and move forward.

Stuart Muter - RBC Capital Markets - Analyst

Fair enough. Nice handling the numbers. Thanks.

Operator

We’ll take our next question from Drew Figdore at Piedaman and Company.