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

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COHU, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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COHU

12367 Crosthwaite Circle
Poway, California 92064-6817

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 11, 2011

TO OUR STOCKHOLDERS:

     The Annual Meeting of Stockholders of Cohu, Inc. (“Cohu”) will be held at the Cohu corporate offices, located at 12367 Crosthwaite Circle, Poway, California 92064-6817 on Wednesday, May 11, 2011, at 9:00 a.m. Pacific Time, for the following purposes:

	1.		To elect one director, for a term of three years.
	2.		To approve an advisory vote on executive compensation.
	3.		An advisory vote on the frequency of holding an advisory vote on executive compensation.
	4.		The reapproval of the performance-based compensation measures to be used under the Cohu, Inc. 2005 Equity Incentive Plan, as required by Section 162(m) of the Internal Revenue Code.
	5.		To approve an amendment to the Cohu 1997 Employee Stock Purchase Plan.
	6.		To ratify the appointment of Ernst & Young LLP as Cohu’s independent registered public accounting firm for 2011.
	7.		To act upon such other matters as may properly come before the Meeting or any adjournment or postponement thereof.

     Only stockholders of record of Cohu as of the close of business on March 16, 2011 will be entitled to vote at the meeting.

     Since the holders of a majority of the outstanding shares of voting stock of Cohu entitled to vote at the meeting must be represented to constitute a quorum, all stockholders are urged either to attend the meeting in person or to vote by proxy.

     A complete list of the stockholders of record entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder, will be available at Cohu’s corporate offices, for the examination of any stockholder during normal business hours for a period of ten days immediately prior to the meeting.

     Please sign, date and return the enclosed proxy in the envelope enclosed for your convenience. Alternatively, stockholders may vote by telephone or electronically via the internet. Please refer to the instructions included with the proxy for additional details. If you attend the meeting you may revoke your proxy and vote in person. You may also revoke your proxy by delivering a written notice to the Secretary of Cohu, or by submitting another duly signed proxy bearing a later date.

Poway, California
April 5, 2011

Cohu, Inc.
12367 Crosthwaite Circle
Poway, California 92064-6817

PROXY STATEMENT

GENERAL INFORMATION

     This proxy statement is furnished in connection with the solicitation by the Board of Directors of Cohu, Inc., a Delaware corporation (“Cohu” or the “Company”), of your proxy for use at the Annual Meeting of Stockholders to be held on Wednesday, May 11, 2011, at 9:00 a.m. Pacific Time at the Cohu corporate offices, located at 12367 Crosthwaite Circle, Poway, California 92064-6817 (the “Meeting”). This proxy statement, the accompanying proxy card and the Cohu 2010 Annual Report are being mailed to all stockholders on or about April 5, 2011.

     On March 16, 2011, the record date fixed by our Board of Directors (hereinafter sometimes referred to as the “Board”), Cohu had outstanding 24,035,275 shares of Common Stock. Only stockholders of record as of the close of business on March 16, 2011 will be entitled to vote at the Meeting and any adjournment thereof.

Voting Procedures

     As a stockholder of Cohu, you have a right to vote on certain business matters affecting Cohu. This Proxy Statement relates only to the solicitation of proxies from the stockholders with respect to the election of one Class 1 director recommended by the board of directors, an advisory vote on executive compensation, an advisory vote on the frequency of holding an advisory vote on executive compensation, reapproval of the performance-based compensation measures to be used under the Cohu, Inc. 2005 Equity Incentive Plan, as required by Section 162(m) of the Internal Revenue Code, approval of an amendment to the Cohu 1997 Employee Stock Purchase Plan and ratification of the appointment of the Company’s independent registered public accounting firm. Each share of Cohu’s Common Stock you own entitles you to one vote for each proposal. For the election of directors, stockholders may cumulate their votes as described below.

Methods of Voting

     You may vote by mail, by telephone, over the Internet or in person at the Meeting. Your shares will be voted in accordance with the instructions you indicate. If you are a stockholder of record and return a proxy card but do not specify how you want to vote your shares, your shares will be voted FOR the named nominee for director, FOR approval of the advisory vote on executive compensation, EVERY THREE YEARS for the advisory vote on the frequency of holding an advisory vote on executive compensation, FOR the reapproval of the performance-based compensation measures to be used under the Cohu, Inc. 2005 Equity Incentive Plan, FOR the approval of an amendment to the Cohu 1997 Employee Stock Purchase Plan, FOR the ratification of the appointment of Ernst & Young LLP as Cohu’s independent registered public accounting firm for 2011, and in the discretion of the proxies (as defined below) as to other matters that may properly come before the Meeting.

     Voting by Mail. By signing and returning the proxy card in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card (known as “proxies”) to vote your shares at the Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Meeting. In this way, your shares will be voted if you are unable to attend the Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted.

     Voting by Telephone. To vote by telephone, please follow the instructions included on your proxy card. If you vote by telephone, you do not need to complete and mail your proxy card.

     Voting over the Internet. To vote over the Internet, please follow the instructions included on your proxy card. If you vote over the Internet, you do not need to complete and mail your proxy card.

     Voting in Person at the Meeting. If you plan to attend the Meeting and vote in person, we will provide you with a ballot at the Meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the Meeting. If your shares are held in the name of your broker or other nominee, you are considered the beneficial owner of shares held in street name. If you wish to vote such shares at the Meeting, you will need to bring with you to the Meeting a legal proxy from your broker or other nominee authorizing you to vote such shares.

Revoking Your Proxy

     You may revoke your proxy at any time before it is voted at the Meeting. In order to do this, you must:

	•		enter a new vote over the Internet, by telephone or by signing and returning another proxy card bearing a later date;
	•		provide written notice of the revocation to Cohu’s Secretary; or
	•		attend the Meeting and vote in person.

Quorum Requirement

     A quorum, which is a majority of the outstanding shares entitled to vote as of the record date, March 16, 2011, must be present in order to hold the Meeting and to conduct business. Shares are counted as being present at the Meeting if you appear in person at the Meeting or if you vote your shares over the Internet, by telephone or by submitting a properly executed proxy card. Proxies marked as abstaining on any matter and broker non-votes (as described below) will be counted as present for the purpose of determining a quorum.

Votes Required for the Proposals

     For Proposal No. 1, the nominee receiving the highest number of votes, in person or by proxy, will be elected as director. You may vote “for” the nominee for election as a director or you may “withhold” your vote. In the election of directors, stockholders may, as provided for in the Cohu Amended and Restated Certificate of Incorporation, cumulate their votes, giving one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the stockholder’s shares are normally entitled, or distribute the stockholder’s votes on the same principle among as many candidates as the stockholder thinks fit. A stockholder may not cumulate his or her votes for a candidate unless a stockholder has given notice at the Meeting (whether by proxy or in person) prior to the voting, of his or her intention to cumulate his or her votes. If any stockholder gives such notice, all stockholders may then cumulate their votes. Management of Cohu is hereby soliciting discretionary authority to cumulate votes represented by proxies if cumulative voting is invoked.

     The affirmative vote of a majority of Cohu common shares cast at the Meeting, in person or by proxy, is required for approval of Proposal No. 2, Proposal No. 4, Proposal No. 5 and Proposal No. 6, as described herein. As it relates to Proposal No. 3, the option of one year, two years or three years that receives the highest number of votes cast will be the frequency of the vote on the compensation of our named executive officers that has been approved by stockholders on an advisory basis. If you return a proxy card that withholds your vote or abstains from voting on a proposal, your shares will be counted as present for the purpose of determining a quorum, but will not be counted in the vote on that proposal.

Broker Non-Votes

     Broker non-votes are shares held by brokers or nominees for which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and for which the broker or nominee does not have discretionary voting power under rules applicable to broker-dealers. If your broker holds your shares in its name and you do not instruct your broker how to vote, your broker will nevertheless have discretion to vote your shares on our sole “routine” matter — the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal No. 6). Your broker will not have discretion to vote on any of the other matters, which are “non-routine” matters, absent direction from you. Accordingly, shares subject to a broker “non-vote” will not be considered entitled to vote with respect to these proposals, and will not affect the outcome. We encourage you to provide instructions to your broker regarding the voting of your shares.

Abstentions

     Abstentions will have no effect on the election of directors (Proposal No.1) and the advisory vote on the frequency of holding an advisory vote on executive compensation (Proposal No. 3). Abstentions will be treated as being present and entitled to vote on the approval of the advisory vote on executive compensation (Proposal No. 2), the reapproval of the performance based compensation measures (Proposal No. 4), the approval of an amendment to the Cohu 1997 Employee Stock Purchase Plan (Proposal No. 5) and the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal No. 6) and, therefore, will have the effect of votes against these proposals.

Voting Confidentiality

     Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. Such information will not be disclosed except as required by law.

Voting Results

     Final voting results will be announced at the Meeting and will be posted shortly after the Meeting on our website at www.cohu.com. Voting results will also be published in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (“SEC”) within four business days of the annual meeting. We will report our determination about the frequency of the advisory vote on executive compensation (Proposal No. 3) in an amendment to a Form 8-K filed within 150 days following the annual meeting. After the reports are filed, you may obtain a copy by:

	•		visiting our website at www.cohu.com;
	•		contacting our Investor Relations department at 858-848-8100; or
	•		viewing our Form 8-K on the SEC’s website at www.sec.gov.

Proxy Solicitation Costs

     Cohu will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. Cohu’s officers, directors and regular employees will not receive additional compensation for such proxy solicitation services. Cohu has not engaged an outside solicitor in connection with this proxy solicitation. We will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding the proxy materials to you.

********************************

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 11, 2011

This Proxy Statement and Cohu’s Fiscal Year 2010 Annual Report are both available at www.proxydocs.com/cohu.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

     The Cohu Amended and Restated Certificate of Incorporation divides the directors into three classes whose terms expire at successive annual meetings over a period of three years. One class of directors is elected for a term of three years at each annual meeting with the remaining directors continuing in office. At the Meeting, the Class 1 director is to be elected for a term expiring in 2014. The shares represented by proxies in the accompanying form will be voted by the proxy holders for the election of the nominee named below. In the event the election of directors is to be by cumulative voting, the proxy holders will vote the shares represented by proxies in such proportions as the proxy holders see fit. Should the nominee decline or become unable to accept nomination or election, which is not anticipated, the proxies will be voted for such substitute nominee as may be designated by a majority of the Board of Directors. There is no family relationship between the nominee, other directors or any of Cohu’s named executive officers.

     The following paragraphs provide information as of the date of this proxy statement about each member of our Board, including the nominee. The information presented includes information the director has given us about his age, all positions he holds, his principal occupation and business experience for the past five years, and the names of other publicly-held companies on which he currently serves as a director or has served as a director during the past five years. In addition to the information presented below regarding the nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he should serve as a director, we also believe that our director nominee has a reputation for integrity, honesty and adherence to high ethical standards. He has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Cohu and our Board.

Required Vote

     The nominee receiving the highest number of votes cast will be elected as Director. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

     The Board of Directors recommends a vote “FOR” the nominee named below.

Director Whose Term Expires in 2014 (if elected) — Class 1

								Director
Name		Age				Principal Occupation		Since
Robert L. Ciardella			58			Cofounder and retired President of Asymtek (a subsidiary of Nordson Corporation) from 1983 until 2006. Asymtek designs, develops, manufactures and sells semiconductor and circuit board assembly equipment. We believe Mr. Ciardella’s qualifications to sit on our Board of Directors include his more than 20 years of executive experience in the semiconductor equipment industry, including his knowledge of operations, product development and business strategy. Mr. Ciardella was appointed Lead Independent Director of the Board on March 12, 2010.			2003

INFORMATION CONCERNING OTHER DIRECTORS NOT STANDING FOR ELECTION

Directors Whose Terms Expire in 2012 — Class 2

								Director
Name		Age				Principal Occupation		Since
Harry L. Casari			74			Retired Partner, Ernst & Young LLP. Mr. Casari is also a director of Orange 21 Inc. (since 2004). We believe Mr. Casari’s qualifications to sit on our Board of Directors include his background in public accounting, auditing and his experience with financial accounting matters for complex global organizations as well as his knowledge of business strategy. Mr. Casari qualifies as an “audit committee financial expert” under SEC guidelines.			1995
Harold Harrigian			76			Retired Partner and Director of Corporate Finance, Crowell, Weedon & Co., a provider of financial services. Mr. Harrigian is also a former partner, Arthur Young & Company (predecessor of Ernst & Young LLP). We believe Mr. Harrigian’s qualifications to sit on our Board of Directors include his knowledge and experience with financial accounting matters, finance, capital structure and his years of experience providing strategic advisory services to complex organizations. Mr. Harrigian qualifies as an “audit committee financial expert” under SEC guidelines.			1998

Directors Whose Terms Expire in 2013 — Class 3

								Director
Name		Age				Principal Occupation		Since
James A. Donahue			62			Chairman, President and Chief Executive Officer of Cohu since March 12, 2010; President and Chief Executive Officer of Cohu from June, 2000 to March 2010; President and Chief Operating Officer of Cohu from October, 1999 to June, 2000; President of Delta Design, Inc., a wholly owned subsidiary of Cohu, since May, 1983. Mr. Donahue is also a director of Standard Microsystems Corporation (SMSC) (since 2003). We believe Mr. Donahue’s qualifications to sit on our Board of Directors include his more than thirty years of executive experience in the semiconductor equipment industry and broad knowledge of business development and strategy, corporate governance and operations.			1999
Steven J. Bilodeau			52			Chairman and retired President and Chief Executive Officer of SMSC, a semiconductor manufacturer, from 1999 until October, 2008. Mr. Bilodeau currently serves as the Non-Executive Chairman of SMSC and is a director of Conexant Systems, Inc. (since 2004) and Gennum Corporation (since 2008). Mr. Bilodeau served as a director of NuHorizons Electronic Corp from 2009 to January 2011. We believe Mr. Bilodeau’s qualifications to sit on our Board of Directors include his 25 years of executive experience in the high technology and semiconductor industries and his knowledge of international operations, business strategy and corporate governance.			2009

PROPOSAL NO. 2

ADVISORY VOTE ON EXECUTIVE COMPENSATION

     Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and Section 14A of the Securities Exchange Act of 1934, and as a matter of good corporate governance, we are asking our stockholders to vote, on an advisory basis, on the compensation of our named executive officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers.

Compensation Program and Philosophy

     As described under the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:

	•		pay for performance;
	•		to attract, motivate and retain talented executive officers;
	•		to motivate progress toward Company-wide financial and personal objectives while balancing rewards for short-term and long-term performance; and
	•		to align the interests of our executive officers with those of stockholders.

     We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 29 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to the Company’s recent and long-term success.

Required Vote

     A majority of the votes cast is required to approve Proposal No. 2. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation

     For the above reasons, we are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement by voting in favor of the following resolution:

     “RESOLVED, that the stockholders approve, in a non-binding vote, the compensation of the Company’s named executive officers as disclosed pursuant to the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure set forth in the Proxy Statement relating to the Company’s 2011 Annual Meeting of Stockholders.”

     Even though this say-on-pay vote is advisory and therefore will not be binding on the Company, the Compensation Committee and the Board value the opinions of our stockholders. Accordingly, to the extent there is a significant vote against the compensation of our named executive officers, we will consider our stockholders’ concerns and the Compensation Committee will evaluate what actions may be necessary or appropriate to address those concerns.

     The Board of Directors recommends that you vote “FOR” approval, on an advisory basis, of the resolution on executive compensation.

PROPOSAL NO. 3

ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE
ON EXECUTIVE COMPENSATION

     Pursuant to the Dodd-Frank Act, we also are asking our stockholders to provide their input with regard to the frequency of future stockholder advisory votes on our executive compensation programs, such as Proposal No. 2 located above in this Proxy Statement. In particular, we are asking whether the advisory vote on executive compensation should occur once every year, every two years or every three years.

     After careful consideration, the Board of Directors recommends that future advisory votes on executive compensation occur every three years (triennially). We believe that a triennial advisory vote on executive compensation reflects the appropriate time frame to enable the Compensation Committee and the Board of Directors to evaluate the results of the most recent advisory vote on executive compensation, to discuss the implications of that vote with stockholders to the extent needed, to develop and implement any adjustments to our executive compensation programs that may be appropriate in light of a past advisory vote on executive compensation, and for stockholders to see and evaluate any such adjustments to our executive compensation programs. A triennial vote is consistent with the long-term performance focus of our executive compensation programs as it allows stockholders to evaluate our executive compensation programs over a multi-year horizon in a business that is cyclical.

     The Board of Directors is aware of and took into account views that some have expressed in support of conducting an annual advisory vote on executive compensation. We are aware that some stockholders believe that annual advisory votes will enhance or reinforce accountability. However, we have in the past and will in the future continue to be proactively engaged with our stockholders on a number of topics and in a number of forums. Thus, we view the advisory vote on executive compensation as an additional, but not exclusive, means for our stockholders to communicate with us regarding their views on the Company’s executive compensation programs.

     Because our executive compensation programs have typically not changed materially from year-to-year and are designed to operate over the long-term and to enhance long-term performance, we are concerned that an annual or biannual advisory vote on executive compensation could lead to a short-term perspective inappropriately bearing on our executive compensation programs. Although we currently believe that holding an advisory vote on executive compensation every three years will reflect the right balance of considerations in the normal course, we will periodically reassess that view and can provide for an advisory vote on executive compensation on a more frequent basis if changes in our compensation programs or other circumstances suggest that such a vote would be appropriate.

     We understand that our stockholders may have different views as to what is an appropriate frequency for advisory votes on executive compensation, and we will carefully review the voting results on this proposal. Stockholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. Stockholders are not voting to approve or disapprove the Board’s recommendation. This advisory vote on the frequency of future advisory votes on executive compensation is not binding on the Board of Directors or Cohu in any way. Notwithstanding the Board’s recommendation and the outcome of the stockholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.

Required Vote

     The option of one year, two years or three years that receives the highest number of “FOR” votes will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

     The Board of Directors recommends that you vote to conduct future advisory votes on executive compensation every three years.

PROPOSAL NO. 4

REAPPROVAL OF THE PERFORMANCE-BASED COMPENSATION MEASURES USED UNDER
THE COHU, INC. 2005 EQUITY INCENTIVE PLAN, AS REQUIRED BY SECTION 162(m) OF THE
INTERNAL REVENUE CODE

     At the Annual Meeting, the stockholders will be asked to reapprove the Cohu, Inc. 2005 Equity Incentive Plan (“the 2005 Plan”). We refer to this plan as the 2005 Plan in this proxy statement. Stockholder reapproval of the performance-based compensation measures under the 2005 Plan is required every five years in order to qualify the 2005 Plan under Section 162(m) of Internal Revenue Code (the “Code”), thereby allowing the Company to deduct for federal income tax purposes compensation paid under the 2005 Plan. If stockholders do not reapprove the performance-based compensation measures, the Company will not be able to grant awards that are qualified as performance-based compensation under Section 162(m) of the Code. If that happens, we may not be entitled to a tax deduction for some or all of the awards provided to our chief executive officer and our named executive officers (other than the CFO).

     The board of directors believes that the Company must offer a competitive equity incentive program if it is to continue to successfully attract and retain the best possible candidates for positions of responsibility within the Company. The board of directors expects that the 2005 Plan will continue to be an important factor in attracting, retaining and rewarding the high-caliber employees, consultants and directors essential to our success and in motivating these individuals to strive to enhance our growth and profitability.

     No amendments or changes to the 2005 Plan are being requested by the Company at this time. Consequently, the reapproval of this proposal by the stockholders will not result in any increase in the number of shares of common stock available for issuance under the 2005 Plan or result in any amendment to the 2005 Plan.

Summary of the 2005 Plan

     The following summary of the 2005 Plan is qualified in its entirety by the specific language of the 2005 Plan, a copy of which is available to any stockholder upon request.

     General. The purpose of the 2005 Plan is to advance the interests of the Company by providing an incentive program that will enable the Company to attract and retain employees, consultants and directors upon whose judgment, interest and efforts the Company’s success is dependent and to provide them with an equity interest in the success of the Company in order to motivate superior performance. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, deferred stock, certain other stock-based awards and cash-based performance awards.

     Authorized Shares. As of March 16, 2011, 1,178,200 shares are available for grant under the 2005 Plan. In addition, the 2005 Plan share reserve includes all of the outstanding stock options and RSUs the Company had previously granted which, as of March 16, 2011, equaled 3,546,269 shares (collectively the “Prior Awards”) to the extent any such Prior Award expires, lapses or otherwise terminates for any reason without having been exercised or settled in full, or if any shares subject to forfeiture or repurchase are forfeited or repurchased by the Company. However, no more than two million five-hundred thousand (2,500,000) shares of this 2005 Plan reserve may be issued upon the exercise or settlement of any restricted stock, RSUs, performance shares or performance units. As of March 16, 2011, 854,148 RSU awards have been granted, resulting in 1,645,852 shares available for future awards under the 2005 Plan. If any award granted under the 2005 Plan expires, lapses or otherwise terminates for any reason without having been exercised or settled in full, or if shares subject to forfeiture or repurchase are forfeited or repurchased by the Company, any such shares that are reacquired or subject to such a terminated award will again become available for issuance under the 2005 Plan. Upon any stock dividend, stock split, reverse stock split, recapitalization or similar change in our capital structure, appropriate adjustments will be made to the shares subject to the 2005 Plan, to the award grant limitations and to all outstanding awards. However, shares shall not become re-available for issuance under the 2005 Plan if they were (i) withheld or surrendered to satisfy tax withholding obligations, (ii) surrendered in payment of stock option exercise prices (either by means of a cashless exercise, attestation or actual surrender of shares) or (iii) subject to the grant of a stock appreciation right which were not issued upon settlement of the stock appreciation right.

     Administration. The 2005 Plan is administered by the Compensation Committee of the Board of Directors duly appointed to administer the 2005 Plan, or, in the absence of such committee, by the Board of Directors. In the case of awards intended to qualify for the performance-based compensation exemption under Section 162(m) of the Code, administration must be by a compensation committee comprised solely of two or more “outside directors” within the meaning of Section 162(m). (For purposes of this summary, the term “Committee” will refer to either such duly appointed committee or the Board of Directors). Subject to the provisions of the 2005 Plan, the

Committee determines in its discretion the persons to whom and the times at which awards are granted, the types and sizes of such awards, and all of their terms and conditions. The Committee may, subject to certain limitations on the exercise of its discretion required by Section 162(m), amend, cancel, renew, or grant a new award in substitution for, any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any award. However, the 2005 Plan forbids, without stockholder approval, the repricing of any outstanding stock option and/or stock appreciation right. In addition, the 2005 Plan forbids any restricted stock award to be granted, or subsequently amended to provide, for (1) any acceleration of vesting for any reason other than upon a “Change in Control”, as defined, or after a participant’s death or disability and (2) vesting of one hundred percent (100%) of any such award prior to the passage of three years of service (unless the award will vest after satisfying specified performance measurements). The 2005 Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action arising from such person’s action or failure to act in administering the 2005 Plan. The Committee will interpret the 2005 Plan and awards granted thereunder, and all determinations of the Committee will be final and binding on all persons having an interest in the 2005 Plan or any award.

     Eligibility. Awards may be granted to employees, directors and consultants of the Company or any present or future parent or subsidiary corporations of the Company. Incentive stock options may be granted only to employees who, as of the time of grant, are employees of the Company or any parent or subsidiary corporation of the Company. As of March 16, 2011, the Company had approximately 1,100 employees, including five named executive officers and four directors who are eligible under the 2005 Plan.

     Stock Options. Each option granted under the 2005 Plan must be evidenced by a written agreement between the Company and the optionee specifying the number of shares subject to the option and the other terms and conditions of the option, consistent with the requirements of the 2005 Plan. The exercise price of each option may not be less than the fair market value of a share of Cohu Common Stock on the date of grant. However, any incentive stock option granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (a “Ten Percent Stockholder”) must have an exercise price equal to at least 110% of the fair market value of a share of Common Stock on the date of grant. The exercise price of each indexed stock option, and the terms and adjustments which may be made to such an option, will be determined by the Committee in its sole discretion at the time of grant. On March 16, 2011, the closing price of the Company’s Common Stock on the NASDAQ Global Select Market was $13.21 per share. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company options which in the aggregate are for more than five hundred thousand (500,000) shares, provided however, that the Company may make an additional one-time grant to any newly-hired employee of a stock option for the purchase of up to an additional two hundred and fifty thousand (250,000) shares.

     The 2005 Plan provides that the option exercise price may be paid in cash, by check, or in cash equivalent, by the assignment of the proceeds of a sale with respect to some or all of the shares being acquired upon the exercise of the option, to the extent legally permitted, by tender of shares of Common Stock owned by the optionee having a fair market value not less than the exercise price, by such other lawful consideration as approved by the Committee, or by any combination of these. Nevertheless, the Committee may restrict the forms of payment permitted in connection with any option grant. No option may be exercised unless the optionee has made adequate provision for federal, state, local and foreign taxes, if any, relating to the exercise of the option, including, if permitted or required by the Company, through the optionee’s surrender of a portion of the option shares to the Company.

     Options will become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the Committee. The maximum term of any option granted under the 2005 Plan is ten years, provided that an incentive stock option granted to a Ten Percent Stockholder must have a term not exceeding five years. The Committee will specify in each written option agreement, and solely in its discretion, the period of post-termination exercise applicable to each option.

     Generally, stock options are nontransferable by the optionee other than by will or by the laws of descent and distribution, and are exercisable during the optionee’s lifetime only by the optionee. However, a nonstatutory stock option may be assigned or transferred to the extent permitted by the Committee in its sole discretion.

     Stock Appreciation Rights. Each stock appreciation right granted under the 2005 Plan must be evidenced by a written agreement between the Company and the participant specifying the number of shares subject to the award and the other terms and conditions of the award, consistent with the requirements of the 2005 Plan.

     A stock appreciation right gives a participant the right to receive the appreciation in the fair market value of Company Common Stock between the date of grant of the award and the date of its exercise. The Company may pay the appreciation either in cash or in shares of Common Stock. The Committee may grant stock appreciation rights under the 2005 Plan in tandem with a related stock option or as a freestanding award. A tandem stock appreciation right is exercisable only at the time and to the same extent that the related option is exercisable, and its exercise causes the related option to be canceled. Freestanding stock appreciation rights vest and become exercisable at the times and on the terms established by the Committee. The maximum term of any stock appreciation right granted under the 2005 Plan is ten years. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company stock appreciation rights which in the aggregate are for more than five hundred thousand (500,000) shares, provided however, that the Company may make an additional one-time grant to any newly-hired employee of a stock appreciation right for the purchase of up to an additional two hundred and fifty thousand (250,000) shares.

     Stock appreciation rights are generally nontransferable by the participant other than by will or by the laws of descent and distribution, and are generally exercisable during the participant’s lifetime only by the participant.

     Restricted Stock Awards. The Committee may grant restricted stock awards under the 2005 Plan in the form of a restricted stock bonus, for which the participant furnishes consideration in the form of services to the Company. Restricted stock awards may be subject to vesting conditions based on such service or performance criteria as the Committee specifies, and the shares acquired may not be transferred by the participant until vested. Unless otherwise provided by the Committee, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed prior to the participant’s termination of service. Participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions as the original award. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company more than two hundred thousand (200,000) shares of restricted stock on which the restrictions are based on performance criteria, provided however, that the Company may make an additional one-time grant to any newly-hired employee of a restricted stock award of up to an additional one hundred thousand (100,000) shares.

     Restricted Stock Units. The Committee may grant restricted stock units (“RSUs”) under the 2005 Plan which represent a right to receive shares of Common Stock at a future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of RSUs or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to the Company. The Committee may grant RSU awards subject to the attainment of performance goals similar to those described below in connection with performance shares and performance units, or may make the awards subject to vesting conditions similar to those applicable to restricted stock awards. Participants have no voting rights or rights to receive cash dividends with respect to RSU awards until shares of Common Stock are issued in settlement of such awards. However, the Committee may grant RSUs that entitle their holders to receive dividend equivalents, which are rights to receive additional RSUs for a number of shares whose value is equal to any cash dividends we pay. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company more than two hundred thousand (200,000) RSUs on which the restrictions are based on performance criteria, provided however, that the Company may make an additional one-time grant to any newly-hired employee of a restricted stock award of up to an additional one hundred thousand (100,000) shares.

     Performance Awards. The Committee may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the Committee determines in writing and sets forth in a written agreement between the Company and the participant. These awards may be designated as performance shares, performance units or cash-based performance bonuses. Performance shares and performance units are unfunded bookkeeping entries generally having initial values, respectively, equal to the fair market value determined on the grant date of a share of Common Stock and a dollar amount per unit which may be determined by the Committee. Performance awards will specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more predetermined performance goals are attained within a predetermined performance period. To the extent earned, performance awards may be settled in cash, shares of Common Stock (including shares of restricted stock) or any combination thereof. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, for each fiscal year of the Company contained in the applicable performance period, no employee may be granted performance shares that could result in the employee receiving more than one hundred thousand (100,000) shares of Common Stock or performance units that could result in the employee receiving more than one million dollars ($1,000,000). A participant may receive only one performance award with respect to any performance period.

     Any participant selected by the Committee may be granted one or more performance-based awards in the form of a cash bonus payable upon the attainment of performance goals that are established by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. Any such performance bonus award paid to a participant will be based upon objectively determinable bonus formulas established in accordance with the 2005 Plan. No participant may be paid a performance cash bonus which is greater than $1,000,000 during any fiscal year of the Company.

     Prior to the beginning of the applicable performance period or such later date as permitted under Section 162(m) of the Code, the Committee will establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to one or more measures of business or financial performance of the Company and each parent and subsidiary corporation consolidated therewith for financial reporting purposes, or such division or business unit of the Company as may be selected by the Committee.

     The Committee, in its discretion, may base performance goals on one or more of the following such measures: revenue, gross margin, operating margin, operating income, pre-tax profit, earnings before interest, taxes and depreciation, net income, cash flow, expenses, the market price of the stock, earnings per share, return on stockholder equity, return on capital, return on net assets, economic value added, number of customers, market share, return on investment, profit after tax, customer satisfaction, business divestitures and acquisitions, supplier awards from significant customers, new product development and working capital. The target levels with respect to these performance measures may be expressed on an absolute basis or relative to a standard specified by the Committee. The degree of attainment of performance measures will, according to criteria established by the Committee, be computed before the effect of changes in accounting standards, restructuring charges and similar extraordinary items occurring after the establishment of the performance goals applicable to a performance award.

     Following completion of the applicable performance period, the Committee will certify in writing the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The Committee retains the discretion to eliminate or reduce, but not increase, the amount that would otherwise be payable to the participant on the basis of the performance goals attained. However, no such reduction may increase the amount paid to any other participant. In its discretion, the Committee may provide for the payment to a participant awarded performance shares of dividend equivalents with respect to cash dividends paid on the Company’s Common Stock. Performance award payments may be made in lump sum or in installments. If any payment is to be made on a deferred basis, the Committee may provide for the payment of dividend equivalents or interest during the deferral period.

     Unless otherwise provided by the Committee, if a participant’s service terminates due to the participant’s death, disability or retirement prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the entire performance period but will be prorated for the number of months of the participant’s service during the performance period. If a participant’s service terminates prior to completion of the applicable performance period for any other reason, the 2005 Plan provides that, unless otherwise determined by the Committee, the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end of the applicable performance period.

     Deferred Stock Awards. The 2005 Plan provides that certain participant’s who are executives or members of a select group of highly compensated employees may elect to receive, in lieu of payment in cash or stock of all or any portion of such participant’s cash and/or stock compensation, an award of deferred stock units. A participant electing to receive deferred stock units will be granted automatically, on the effective date of such deferral election, an award (a “Deferred Stock Unit Award”) for a number of stock units equal to the amount of the deferred compensation divided by an amount equal to the fair market value of a share of our Common Stock as quoted by the national or regional securities exchange or market system on which the Common Stock is listed on the date of grant. A stock unit is an unfunded bookkeeping entry representing a right to receive one share of our Common Stock in accordance with the terms and conditions of the Deferred Stock Unit Award. Participants are not required to pay any additional cash consideration in connection with the settlement of a Deferred Stock Unit Award. A participant’s compensation not paid in the form of a Deferred Stock Unit Award will be paid in cash in accordance with the Company’s normal payment procedures.

     Each Deferred Stock Unit Award will be evidenced by a written agreement between the Company and the participant specifying the number of stock units subject to the award and the other terms and conditions of the Deferred Stock Unit Award, consistent with the requirements of the 2005 Plan. Deferred Stock Unit Awards are fully vested upon grant and will be settled by distribution to the participant of a number of whole shares of Common Stock equal to the number of stock units subject to the award on a date set forth in the participant’s written agreement in accordance with the terms of the 2005 Plan at the time of his or her election to receive the Deferred Stock Unit Award. A holder of a stock unit has no voting rights or other rights as a stockholder until shares of Common Stock are issued to the participant in settlement of the stock unit. However, participants holding stock units will be entitled to receive dividend equivalents with respect to any payment of cash dividends on an equivalent number of shares of Common Stock. Such dividend equivalents will be credited in the form of additional whole and fractional stock units determined by the fair market value of a share of Common Stock on the dividend payment date. Prior to settlement, no Deferred Stock Unit Award may be assigned or transferred other than by will or the laws of descent and distribution.

     Other Stock-Based Awards. The Committee may also grant one or more awards not specifically identified by the terms of the 2005 Plan that would provide a participant with either: (i) a share of stock; (ii) the right to purchase a share of stock; (iii) has a value derived from a share of stock; or (iv) an exercise or conversion privilege related to a share of stock. Other stock-based awards may be subject to vesting conditions based on such service or performance criteria as the Committee specifies, and any such award may not be transferred by the participant until vested.

     Change in Control. The 2005 Plan defines a “Change in Control” of the Company as any of the following events upon which the stockholders of the Company immediately before the event do not retain immediately after the event, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the event, direct or indirect beneficial ownership of a majority of the total combined voting power of the voting securities of the Company, its successor or the corporation to which the assets of the Company were transferred: (i) a sale or exchange by the stockholders in a single or series of related transactions of more than 50% of the Company’s voting stock; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. If a Change in Control occurs, the surviving, continuing, successor or purchasing corporation or parent corporation thereof may either assume all outstanding awards or substitute new awards having an equivalent value.

     In the event of a Change in Control and the outstanding stock options and stock appreciation rights are not assumed or replaced, then all unexercisable, unvested or unpaid portions of such outstanding awards will become immediately exercisable, vested and payable in full immediately prior to the date of the Change in Control.

     Any award not assumed, replaced or exercised prior to the Change in Control will terminate. The 2005 Plan authorizes the Committee, in its discretion, to provide for different treatment of any award, as may be specified in such award’s written agreement, which may provide for acceleration of the vesting or settlement of any award, or provide for longer periods of exercisability, upon a Change in Control.

     Termination or Amendment. The 2005 Plan will continue in effect until the first to occur of (i) its termination by the Board or (ii) the date on which all shares available for issuance under the 2005 Plan have been issued and all restrictions on such shares under the terms of the 2005 Plan and the agreements evidencing awards granted under the 2005 Plan have lapsed. However, all incentive stock options granted, if at all, must be granted within ten (10) years from the date the 2005 Plan was adopted by the Board. The Board may terminate or amend the 2005 Plan at any time, provided that no amendment may be made without stockholder approval if the Board deems such approval necessary for compliance with any applicable tax or securities law or other regulatory requirements, including the requirements of any stock exchange or market system on which the Common Stock of the Company is then listed. No termination or amendment may affect any outstanding award unless expressly provided by the Board, and, in any event, may not adversely affect an outstanding award without the consent of the participant unless necessary to comply with any applicable law, regulation or rule.

Summary of U.S. Federal Income Tax Consequences

     The following is only a summary of the United States federal income tax consequences to participants in the 2005 Plan and does not purport to be complete. Interested parties and participants should refer to the applicable provisions of the Code. The summary does not address other taxes such as state and local income taxes, federal and state estate, inheritance and gift taxes and foreign taxes. Each participant should consult his or her own tax advisor concerning the tax consequences of the 2005 Plan.

     Incentive Stock Options. An optionee recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Optionees who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option will normally recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If an optionee satisfies such holding periods upon a sale of the shares, the Company will not be entitled to any deduction for federal income tax purposes. If an optionee disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the determination date (see discussion under “Nonstatutory Stock Options” below) and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the optionee upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.

     The difference between the option exercise price and the fair market value of the shares on the determination date of an incentive stock option (see discussion under “Nonstatutory Stock Options” below) is treated as an adjustment in computing the optionee’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to optionees subject to the alternative minimum tax.

     Nonstatutory Stock Options and Indexed Stock Options. Options not designated or qualifying as incentive stock options, or as an indexed stock option, will be nonstatutory stock options having no special tax status. An optionee generally recognizes no taxable income as the result of the grant of such an option. Upon exercise of a nonstatutory stock option, the optionee normally recognizes ordinary income in the amount of the difference between the option exercise price and the fair market value of the shares on the determination date (as defined below). If the optionee is an employee, such ordinary income generally is subject to withholding of income and employment taxes.

     The “determination date” is the date on which the option is exercised unless the shares are subject to a substantial risk of forfeiture (as in the case where an optionee is permitted to exercise an unvested option and receive unvested shares which, until they vest, are subject to the Company’s right to repurchase them at the original exercise price upon the optionee’s termination of service) and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture. If the determination date is after the exercise date, the optionee may elect, pursuant to Section 83(b) of the Code, to have the exercise date be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date the option is exercised. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock option or the sale of the stock acquired pursuant to such grant. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the optionee as a result of the exercise of a nonstatutory stock option, except to the extent such deduction is limited by applicable provisions of the Code.

     Stock Appreciation Rights. No taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received and the fair market value of any shares of our Common Stock received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

     Restricted Stock Awards. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the “determination date” (as defined above under “Nonstatutory Stock Options”). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the determination date is after the date on which the participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to have the date of acquisition be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

     Performance and Restricted Stock Units Awards. A participant generally will recognize no income upon the grant of a performance share, performance units, and cash-based performance bonuses or RSUs award. Upon the settlement and/or payment of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any nonrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above (see discussion under “Restricted Stock”). Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the “determination date” (as defined above under “Nonstatutory Stock Options”), will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

     Deferred Stock Unit Awards. A participant generally will recognize no income upon the grant of a Deferred Stock Unit Award. Upon the settlement of such an award, the participant normally will recognize ordinary income in the year of settlement in an amount equal to the fair market value of any unrestricted shares of our Common Stock received. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

     Other Stock-Based Awards. A participant generally will recognize income with respect to any other stock-based award at the time and in the manner required by the applicable provisions of the Code and such taxation will depend upon the specifics of any such award. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

Historical Plan Benefits

     Awards Granted to Certain Individuals and Groups. The number of options or other awards (if any) that an individual may receive under the 2005 Plan is at the discretion of the Compensation Committee and therefore cannot be determined in advance. Our executive officers are eligible to receive awards under the 2005 Plan and, accordingly, our executive officers have an interest in this proposal. The following table sets forth the total number of shares of the Company’s common stock subject to options or other awards (if any) granted under the 2005 Plan to the listed persons and groups during the fiscal year ended December 25, 2010 and the weighted average per share exercise price of any such options. Target annual incentives under the cash-based performance bonus plan for our named executive officers are reported in the “2010 Grants of Plan-Based Awards Table” included on page 40. Actual amounts received under our annual bonus program will depend on who participates in the program, actual performance measured against the attainment of pre-established performance goals and the Compensation Committee’s discretion to adjust such amounts.

Options and Restricted Stock Units Granted to Certain Individuals and Groups
During the Fiscal Year Ended December 25, 2010

						Weighted				Number of
		Number				Average Per				Shares of
		of				Share Exercise				Restricted
		Options				Price of				Stock Units
Name and Position		Granted(1)				Options ($)(1)				Granted
James A. Donahue Chairman, President and Chief Executive Officer of Cohu, Inc			94,750				13.77				32,417
Jeffrey D. Jones Chief Financial Officer			23,750				13.77				8,750
Roger J. Hopkins Vice President, Sales and Service			13,750				13.77				5,417
James G. McFarlane Senior Vice President			21,250				13.77				7,917
James P. Walsh, Vice President, Manufacturing			—				—				—
All Current Executive Officers, as a Group (5 Persons)			153,500				13.77				54,501
All Current Non-Employee Directors who are not Executive Officers, as a Group (4 Persons)			20,000				15.89				20,000
All Other Employees, Including all Current Officers who are not Executive Officers, as a Group			206,250				13.77				248,429

Required Vote

     A majority of the votes cast is required to approve Proposal No. 4. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

     The Board of Directors recommends that stockholders vote “FOR” reapproval of the performance-based compensation measures used under the 2005 Plan.

PROPOSAL NO. 5

APPROVAL OF AN AMENDMENT TO THE COHU 1997 EMPLOYEE STOCK PURCHASE PLAN

     The Cohu Board of Directors has approved and recommended for adoption an amendment to the Cohu 1997 Employee Stock Purchase Plan (the “Purchase Plan”). The amendment, if approved by Cohu’s stockholders, will provide that the number of shares that may be issued under the Purchase Plan be increased by 500,000 shares from 1,400,000 to 1,900,000. If the amendment is not approved by the stockholders the share reserve will remain at 1,400,000.

     As of March 16, 2011, a total of 1,142,406 shares of Cohu Common Stock have been issued under the Purchase Plan, and only 257,594 shares are available for future issuances. The Purchase Plan is otherwise generally unchanged since Cohu stockholders approved certain amendments to the Purchase Plan at the Cohu 2006 Annual Meeting of Stockholders. We believe strongly that approval of the amendment to the Purchase Plan is essential to our continued success. Our employees are our most valuable assets. The Purchase Plan is vital to our ability to attract and retain outstanding and highly skilled individuals in the extremely competitive labor markets in which we must compete. The purchase of stock is also crucial to our ability to motivate employees to achieve Cohu’s long-term goals and provides a source of capital.

Summary of the Purchase Plan

     The following summary of the Purchase Plan is qualified in its entirety by the specific language of the Purchase Plan, a copy of which is available to any stockholder upon request.

     Purpose. The Board of Directors believes that the recruitment and retention of qualified personnel are essential to the Company’s continued growth and success and that an incentive plan such as the Purchase Plan is necessary for the Company to remain competitive in its compensation practices. The majority of high technology companies have purchase plans similar to the Purchase Plan described herein. The Purchase Plan provides employees the opportunity to purchase Common Stock of Cohu at a discount from market through payroll deductions.

     Administration. The Purchase Plan is administered by the Compensation Committee of the Board of Cohu. Such committee has full authority to adopt such rules and procedures as it may deem necessary for proper plan administration and to interpret the provisions of the Purchase Plan. All costs and expenses incurred in plan administration are paid by Cohu without charge to participants.

     Eligibility and Participation. Any regular employee, including officers, who is employed by Cohu (or any of its majority-owned subsidiaries) for more than 20 hours per week and more than five months in a calendar year is eligible to participate in the Purchase Plan provided that the employee is employed on the first day of an offering period and subject to certain limitations imposed by the Code. As of March 16, 2011, approximately 1,100 employees were eligible to participate in the Purchase Plan. Eligible employees become participants in the Purchase Plan by delivering to Cohu a subscription agreement authorizing payroll deductions prior to the applicable offering date, or at such other time as may be determined by the Compensation Committee with respect to a given offering. By executing a subscription agreement to participate in the Purchase Plan, each employee is in effect granted an option to purchase shares of Cohu’s Common Stock. No employee shall be permitted to subscribe for shares under the Purchase Plan if, immediately after the grant of the option, the employee would own 5% or more of the voting stock of all classes of stock of Cohu nor shall any employee be granted an option that would permit such employee to purchase stock under the Purchase Plan at a rate that exceeds $25,000 worth of stock (determined at the fair market value of the shares at the time the option is granted) for each calendar year in which such option is outstanding at any time.

     Offering Periods. The Purchase Plan is implemented in a series of successive offering periods each with a duration of six months. Offering periods commence each November 1 and May 1. Shares are purchased on the last business day of each offering period. The Board of Directors may alter the duration of the offering periods without stockholder approval.

     Purchase Price. The price per share at which shares are purchased under the Purchase Plan is equal to the lower of (i) 85% of the fair market value of the Common Stock on the date of commencement of the offering period and (ii) 85% of the fair market value of the Common Stock on the last day of the offering period. The fair market value of the Common Stock on any relevant date will be deemed to equal the closing price on such date on the NASDAQ Global Select Market.

     Payment of Purchase Price; Payroll Deductions. The purchase price of the shares is accumulated by payroll deductions during the offering period. The deductions may not exceed 10% of a participant’s eligible compensation, which is defined in the Purchase Plan to include regular straight-time salary, exclusive of any payments for overtime, bonuses, commissions or incentive compensation. Each participant has the right to purchase up to the number of whole shares arrived at by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the fair market value of a share of stock on the offering date. The Board of Directors approved an amendment to the Purchase Plan on March 25, 2011 to limit each participant’s right to purchase shares to the lesser of (i) the number of shares arrived at by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the fair market value of a share of stock on the offering date or (ii) 3,000 shares. Payroll deductions commence on the first payday following the commencement date of the offering and continue until the end of the offering period unless sooner terminated as provided for in the Purchase Plan. All payroll deductions are credited to the participant’s account under the Purchase Plan and are deposited with the general funds of Cohu and until shares are purchased under the Purchase Plan such funds may be used by Cohu for any corporate purpose.

     Withdrawal. A participant’s interest in a given offering may be terminated in whole, but not in part, by signing and delivering to Cohu a notice of withdrawal from the Purchase Plan. Such withdrawal may be elected at any time prior to the end of the applicable six-month offering period and will result in a refund of all payroll deductions for that offering period. Any withdrawal by the participant of accumulated payroll deductions for a given offering automatically terminates the participant’s interest in that offering. A participant who ceases to be an eligible employee receives a refund of their payroll deductions for the offering period in which such loss of eligibility status occurs. No interest is paid on such refunds.

     Shares Reserved for Issuance; Capital Changes. Currently, a maximum of 1,400,000 shares of Cohu’s Common Stock may be issued under the Purchase Plan. If the amendment is approved by the stockholders, the number of shares authorized for issuance under the Purchase Plan will increase by 500,000 to 1,900,000. In the event any change is made in the capitalization of the Company, such as stock splits or stock dividends, which results in an increase or decrease in the number of shares of Common Stock outstanding, appropriate adjustments will be made by Cohu in the shares subject to purchase and in the purchase price per share. In the event Cohu is acquired by merger or asset sale during an offering period, all outstanding purchase options shall be assumed or an equivalent option shall be substituted by the successor corporation. If the successor corporation does not agree to assume the option or to substitute an equivalent option, the Board shall provide for the optionee to have the right to exercise the option immediately prior to the acquisition.

     Nonassignability. No rights or accumulated payroll deductions of an employee under the Purchase Plan may be pledged, assigned or transferred for any reason and any such attempt may be treated by Cohu as an election to withdraw from the Purchase Plan.

     Amendment and Termination. The Purchase Plan will continue in effect until the first to occur of (i) its termination by the Board of Directors, (ii) the date on which all shares available for issuance under the Purchase Plan have been issued or (iii) the date on which all outstanding purchase options are exercised in connection with an acquisition of Cohu. The Board of Directors may at any time amend or terminate the Purchase Plan, except that such termination shall not affect options previously granted nor may any amendment make any change in an option granted prior thereto which adversely affects the rights of any participant. No amendment may be made to the Purchase Plan without the prior approval of the stockholders of Cohu if such amendment would increase the number of shares reserved under the Purchase Plan, permit payroll deductions in excess of 10% of the participant’s compensation, materially modify the eligibility requirements or materially increase the benefits which may accrue under the Purchase Plan.

Summary of U.S. Federal Income Tax Consequences

     The following is only a summary of the United States federal income tax consequences to participants in the Purchase Plan and does not purport to be complete. Interested parties and participants should refer to the applicable provisions of the Code. The summary does not address other taxes such as state and local income taxes, federal and state estate, inheritance and gift taxes and foreign taxes. Each participant should consult his or her own tax advisor concerning the tax consequences of the Purchase Plan.

     The Purchase Plan is intended to qualify under the provisions of Sections 421 and 423 of the Code. Under these provisions, no income will be taxable to a participant at the time of grant of the option or when shares are purchased. Upon disposition of the shares, the participant will generally be subject to tax and the amount of the tax will depend upon the holding period. If the shares have been held by the participant for more than two years after the first day of the offering period in which the shares were acquired and more than one year after the purchase date of the shares then the lesser of (i) the excess of the fair market value of the shares at the time of such disposition over the purchase price of

the shares, or (ii) 15% of the fair market value of the shares on the first day of the offering period, will be treated as ordinary income, and any further gain upon such disposition will be treated as long-term capital gain. If the shares are disposed of before the expiration of the holding periods described above, the excess of the fair market value of the shares on the last day of the offering period over the purchase price will be treated as ordinary income, and any further gain or loss on such disposition will be long-term or short-term capital gain or loss, depending on the holding period. Cohu is not entitled to a deduction for amounts taxable to a participant, except to the extent of ordinary income reported by participants upon disposition of shares prior to the expiration of the holding periods described above.

New Plan Benefits

     Because benefits under the Purchase Plan will depend on employees’ elections to participate and to purchase shares under the Purchase Plan at various future dates, it is not possible to determine the benefits that will be received by executive officers and other employees. Non-employee directors are not eligible to participate in the Purchase Plan.

Required Vote

     A majority of the votes cast is required to approve Proposal No. 5. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

     The Board of Directors recommends that stockholders vote “FOR” approval of the amendment to the Purchase Plan.

PROPOSAL NO. 6

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     The Audit Committee of the Board has appointed Ernst & Young LLP as Cohu’s independent registered public accounting firm for the fiscal year ending December 31, 2011. Ernst & Young LLP served as Cohu’s independent registered public accounting firm for the fiscal year ended December 25, 2010 and also provided certain tax and other audit-related services. See “Principal Accounting Fees and Services” on page 28. Representatives of Ernst & Young LLP are expected to attend the Meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.

     Our Board recommends that the stockholders approve the ratification of the appointment of Ernst & Young LLP as Cohu’s independent registered public accounting firm for the fiscal year ending December 31, 2011. If the appointment is not ratified, the Board will consider whether it should select another independent registered public accounting firm.

Required Vote

     A majority of the votes cast is required to approve Proposal No. 6. If you hold your shares through a broker and you do not instruct the broker on how to vote on this “routine” proposal, your broker will nevertheless have authority to vote your shares on this “routine” proposal in your broker’s discretion.

Recommendation of the Board

     The Board of Directors recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP as Cohu’s independent registered public accounting firm for the fiscal year ending December 31, 2011.

BOARD OF DIRECTORS AND COMMITTEES

Director Independence

     Cohu has adopted standards for director independence pursuant to NASDAQ listing standards and SEC rules. An “independent director” means a person other than an officer or employee of Cohu or its subsidiaries, or any other individual having a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. To be considered independent, the Board must affirmatively determine that neither the director nor an immediate family member of the director has had any direct or indirect material relationship with Cohu within the last three years.

     The Board has considered relationships, transactions and/or arrangements with each of the directors, and has concluded that none of the non-employee directors has any relationships with Cohu that would impair his independence. The Board has determined that each member of the Board, other than Mr. Donahue, is an independent director under applicable NASDAQ listing standards and SEC rules. Mr. Donahue is an employee of Cohu and, as such, he did not meet the independence standards. In addition, the Board has also determined that:

	•		all directors who serve on the Audit, Compensation and Nominating and Governance committees are independent under applicable NASDAQ listing standards, Internal Revenue Code requirements and SEC rules, and
	•		all members of the Audit Committee meet the additional independence requirement that they do not directly or indirectly receive compensation from Cohu other than their compensation as directors.

Board Structure and Committee Composition

     As of the date of this proxy statement, our Board has five directors and the following three committees: (1) Audit, (2) Compensation and (3) Nominating and Governance. The membership during 2010 and the function of each of the committees are described below. Each of the committees operates under a written charter adopted by the Board. All of the committee charters are available on Cohu’s website at www.cohu.com/investors/corporategovernance. During 2010, the Board held nine meetings. Each director attended at least 75% of all Board and applicable committee meetings. Directors are encouraged to attend annual meetings of Cohu stockholders. All five directors attended the last annual meeting of stockholders held on May 11, 2010.

     The Cohu, Inc. Corporate Governance Guidelines provide that if the Chairman of the Board and Chief Executive Officer are the same person, the Cohu Nominating and Governance Committee shall nominate an independent director to serve as the Lead Independent Director, the selection of whom shall be subject to approval by a vote of the majority of the independent directors.

     The table below breaks down 2010 committee membership for each committee and each director.

Nominating and

Name of Director

Audit

Compensation

Governance

Independent Directors:

Steven J. Bilodeau

X

X

X

Harry L. Casari

X

Chair

X

Robert L. Ciardella (1)

X

X

Chair

Harold Harrigian

Chair

X

X

Other Director:

James A. Donahue (2)

Number of Meetings in 2010

7

11

4

Audit Committee

     Cohu has a separately designated standing Audit Committee established in accordance with Section 3(a)(58) of the Securities Exchange Act of 1934, as amended. The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of Cohu’s financial statements, Cohu’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, risk assessment and risk management. Among other things, the Audit Committee prepares the Audit Committee report for inclusion in the annual proxy statement; annually reviews the Audit Committee charter and the committee’s performance; appoints, evaluates and approves the fees of Cohu’s independent registered public accounting firm; reviews and approves the scope of the annual audit, the audit fee and the financial statements; reviews Cohu’s disclosure controls and procedures, internal controls, including such controls over financial reporting, information security policies and corporate policies with respect to financial information and earnings guidance; oversees investigations into complaints concerning financial matters; and reviews other risks that may have a significant impact on Cohu’s financial statements. The Audit Committee works closely with management as well as Cohu’s independent registered public accounting firm. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from Cohu for, outside legal, accounting or other advisors as the Audit Committee deems necessary in order to carry out its duties.

     The report of the Audit Committee is included herein on page 27 and the charter of the Audit Committee is available at www.cohu.com/investors/corporategovernance.

Compensation Committee

     The Compensation Committee discharges the Board’s responsibilities relating to compensation of Cohu’s executives and directors and, among other things, reviews and discusses the “Compensation Discussion and Analysis” with management, and produces an annual compensation committee report for inclusion in Cohu’s proxy statement; provides general oversight of Cohu’s compensation structure, including Cohu’s equity compensation plans and benefits programs; and retains and approves the terms of the retention of any compensation consultants and other compensation experts. Other specific duties and responsibilities of the Compensation Committee include reviewing and approving objectives relevant to executive officer compensation, evaluating performance and determining the compensation of executive officers in accordance with those objectives; approving employment agreements for executive officers; approving and amending Cohu’s equity and non-equity incentive compensation and related performance goals and measures and stock-related programs (subject to stockholder approval, if required); approving any changes to non-equity based benefit plans involving a material financial commitment by Cohu; recommending director compensation to the Board; monitoring director and executive stock ownership; and annually evaluating its performance and its charter.

     The report of the Compensation Committee is included herein on page 38. The charter of the Compensation Committee is available at www.cohu.com/investors/corporategovernance.

Nominating and Governance Committee

     The Nominating and Governance Committee identifies individuals qualified to become Board members and recommends to the Board candidates to be nominated for election as directors at Cohu’s annual meeting consistent with criteria the Committee deems appropriate, as approved by the Board; develops Cohu’s Corporate Governance Guidelines for approval by the Board, and reviews and recommends updates to such Guidelines, as appropriate; oversees the organization of the Board to discharge the Board’s duties and responsibilities properly and efficiently; identifies best practices; and recommends corporate governance principles, including giving proper attention and making effective responses to stockholder concerns regarding corporate governance. Other specific duties and responsibilities of the Nominating and Governance Committee include annual assessment of the size and composition of the Board; developing membership qualifications for Board committees; defining specific criteria for director independence; monitoring compliance with Board and Board committee membership criteria; annually reviewing and recommending directors for continued service; coordinating and assisting management and the Board in recruiting new members to the Board; annually, and together with the Chairman of the Compensation Committee and the Lead Independent Director, evaluating the performance of the Chairman of the Board and CEO and presenting the results of the review to the Board and to the Chairman and CEO; reviewing and recommending proposed changes to Cohu’s charter or Bylaws and Board committee charters; periodically assessing and recommending action with respect to stockholder rights plans or other stockholder protections; recommending Board committee assignments; reviewing and approving any employee director or executive officer standing for election for outside for-profit boards of directors; reviewing governance-related stockholder proposals and recommending Board responses; overseeing the evaluation of the Board and management and conducting a preliminary review of director independence and the financial literacy and expertise of Audit Committee members. The Chairman of the Nominating and Governance Committee receives communications directed to non-employee directors.

     The charter of the Nominating and Governance Committee is available at www.cohu.com/investors/corporategovernance.

Board Leadership Structure, Risk Oversight

Board Leadership Structure

     Our Board is currently comprised of four independent directors and one employee director. Mr. Donahue was appointed Chairman of the Board on March 12, 2010. Mr. Donahue has been a member of our Board since 1999 and Chief Executive Officer since 2000. In connection with Mr. Donahue’s appointment as Chairman, the Board has designated Mr. Ciardella as Lead Independent Director. We believe that the number of independent, experienced directors that make up our Board, along with the independent oversight by our Lead Independent Director, benefits Cohu and our stockholders.

     We believe having a single leader for both the Company and the Board provides clear leadership for Cohu and is optimal for us because it demonstrates to our employees, suppliers, customers, and other stakeholders that Cohu is under strong leadership, with a single person setting the tone and having primary responsibility for managing our operations. We believe Cohu, is well-served by this leadership structure.

     The Cohu, Inc. Corporate Governance Guidelines provide that if the Chairman of the Board and Chief Executive Officer are the same person, the Cohu Nominating and Governance Committee shall nominate an independent director to serve as the Lead Independent Director, the selection of whom shall be subject to approval by a vote of the majority of the independent directors. Although annually elected, the Lead Independent Director is generally expected to serve for more than one year.

     The specific responsibilities of the Lead Independent Director include presiding at executive sessions of directors and at board meetings where the Chairman is not present, calling meetings of Independent Directors, serving as a liaison between the independent directors and the Chairman/CEO and performing such other duties and responsibilities as the Board may determine.

Risk Oversight

     Our Board oversees our risk management process. The Board focuses on general risk management strategy, the most significant risks facing Cohu, and ensures that appropriate risk mitigation strategies are implemented by management. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters. Cohu’s management is responsible for day-to-day risk management. This responsibility includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels.

Stockholder Nominees

     The policy of the Nominating and Governance Committee is to consider properly submitted stockholder nominations for candidates for membership on the Board as described below under “Identifying and Evaluating Nominees for Directors.” In evaluating such nominations, the Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth under “Director Qualifications.” Any stockholder nominations proposed for consideration by the Nominating and Governance Committee should include the nominee’s name and qualifications for Board membership and should be addressed to:

Corporate Secretary
Cohu, Inc.
12367 Crosthwaite Circle
Poway, CA 92064-6817

     In addition, the Bylaws of Cohu permit stockholders to nominate directors for consideration at an annual stockholder meeting. For a description of the process for nominating directors in accordance with Cohu’s Bylaws, see “Stockholder Proposals — 2012 Annual Meeting” on page 46.

Director Qualifications

     Cohu’s Corporate Governance Guidelines are available at www.cohu.com/investors/corporategovernance and contain Board membership criteria that apply to nominees recommended by the Nominating and Governance Committee for a position on Cohu’s Board. Under these criteria, members of the Board should have the highest professional and personal ethics and values, consistent with longstanding Cohu values and standards. They should have broad experience at the policy-making level in business, government, education, technology and/or public interest. They should also be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom, based on their experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to responsibly perform all director duties. Each director must represent the interests of all stockholders.

Identifying and Evaluating Nominees for Directors

     Our Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Nominating and Governance Committee assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Nominating and Governance Committee through current Board members, professional search firms, stockholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Governance Committee, and may be considered at any point during the year. As described above, the Nominating and Governance Committee also considers properly submitted stockholder nominations for candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee at a regularly scheduled meeting. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board. While we do not have a formal diversity policy, the Board believes it is important for the Board to have diversity of knowledge base, professional experience and skills, and the Board and Nominating and Governance Committee takes these qualities into account when considering director nominees.

Executive Sessions

     Executive sessions of independent directors, without management present, are held at least three times a year. The sessions may be scheduled or held on an impromptu basis, and are chaired by the Lead Independent Director or in the absence of the Lead Independent Director the Chairman of the Nominating and Governance Committee or another independent director. Any independent director can request that an additional executive session be initiated or scheduled.

Communications with the Board

     Individuals may communicate with the Board, including the non-employee directors, by submitting an e-mail to Cohu’s Board at corp@cohu.com or by sending a letter to the Cohu Board of Directors, c/o Corporate Secretary, Cohu, Inc., 12367 Crosthwaite Circle, Poway, California 92064-6817.

Compensation of Directors

Cash Compensation

     Directors who are employees of Cohu do not receive any additional compensation for their services as directors. During fiscal 2010, non-employee directors received an annual retainer, and Board committee Chairs and members received annual fees, all paid quarterly, as set forth below.

Annual Retainer:
Chairman of the Board (non-employee)		$	60,000
Other Directors		$	40,000
Lead Independent Director		$	10,000
Annual Fees for Committee Chairs:
Audit Committee		$	16,000
Compensation Committee		$	10,000
Nominating and Governance Committee		$	8,000
Annual Fees for Other Committee Members:
Audit Committee		$	8,000
Compensation Committee		$	5,000
Nominating and Governance Committee		$	4,000

     In addition to the retainers and fees noted above, non-employee directors are reimbursed for out-of-town travel and other reasonable out-of-pocket expenses related to attendance at Board and committee meetings.

     Under the terms and conditions of the 2005 Plan members of the Board may make an annual irrevocable election to defer receipt of all or a portion of their cash-based non-employee director fees (including, as applicable, any annual retainer fee, committee fee and any other compensation payable with respect to their service as a member of the Board). In the event that a director makes such an election, the Company will grant deferred stock awards in lieu of cash, with an initial value equal to the deferred cash, which will be settled at a future date through the issuance of Cohu common stock.

Equity Compensation

     Non-employee directors participate in the 2005 Plan that provides for grants of non-qualified stock options or other forms of equity compensation to non-employee directors, as authorized by the Board. Cohu’s stock ownership guidelines provide that independent directors should accumulate over time a minimum of 10,000 shares of Cohu stock.

     On March 12, 2010, the Compensation Committee, after examination of market data, including an analysis prepared by the compensation consulting firm Compensia, recommended and the Board approved the following equity compensation for non-employee directors:

Initial appointment to the Board:
   10,000 Stock Options
   3,300 Restricted Stock Units (RSUs)

Annual grants:
   5,000 Stock Options
   5,000 Restricted Stock Units (RSUs)

     Each RSU represents a contingent right to receive one share of Cohu Common Stock upon vesting. The exercise price for all options granted to non-employee directors is 100% of the fair market value of the shares on the grant date. Assuming continued service on the Board, the stock options and RSUs granted to non-employee directors upon their initial appointment to the Board will vest and become exercisable or shares are issued, as the case may be, in three equal annual installments beginning one year after the date of grant. The annual option and RSU awards vest and become exercisable or shares are issued, as applicable, upon the one-year anniversary of the award. Exercisability of some or all options or RSUs may be accelerated upon a change in control, as defined in the 2005 Plan. The options expire no later than ten years after the date of grant.

     On May 11, 2010, stock options to purchase 5,000 shares of Cohu Common Stock and 5,000 RSUs were awarded to each of Messrs. Bilodeau, Casari, Ciardella and Harrigian. The stock options vest and become exercisable one-year after the grant date, have an exercise price of $15.89 per share, the fair market value of Cohu Common Stock on the date of grant, and expire ten years from the grant date. Cohu will issue to each recipient, assuming continued service as a director, shares of Cohu Common Stock over the RSU vesting period.

Medical Benefits

     Cohu directors who are retired officers of Cohu and certain other retired Cohu officers and their spouses receive medical benefits consisting of reimbursement of health insurance premiums and other medical costs not covered by insurance. These benefits are not offered to other retired Cohu employees.

2010 DIRECTOR COMPENSATION

     The following table provides information on compensation for Cohu’s non-employee directors for fiscal 2010.

																						Change in
		Fees Earned or																				Pension
		Paid in Cash																Non-Equity				Value and
						Deferred												Incentive				Non-qualified
						in Form of				Stock				Option				Plan				Deferred				All Other
		Paid in				Stock				Awards				Awards				Compensation				Compensation				Compensation
Name		Cash ($)				Units ($)(1)				($)(2)				($)(3)				($)				Earnings ($)				($)(4)				Total ($)
Steven J. Bilodeau			—				57,000				78,250				30,295				—				—				—				165,545
Harry L. Casari			62,000				—				78,250				30,295				—				—				—				170,545
Robert L. Ciardella			26,750				34,250				78,250				30,295				—				—				—				169,545
Harold Harrigian			65,000				—				78,250				30,295				—				—				—				173,545
Charles A. Schwan (5)			15,000				—				—				—				—				—				10,000				25,000

CORPORATE GOVERNANCE

     Cohu has adopted Corporate Governance Guidelines (the “Guidelines”) that outline, among other matters, the role and functions of the Board, the responsibilities of various Board committees, selection of new directors and director independence. The Guidelines are available, along with other important corporate governance materials, on our website at www.cohu.com/investors/corporategovernance. As the operation of the Board is a dynamic process, the Board regularly reviews new or changing legal and regulatory requirements, evolving best practices and other developments, and the Board may modify the Guidelines, as appropriate, from time to time.

CODE OF BUSINESS CONDUCT AND ETHICS

     Cohu has adopted a Code of Business Conduct and Ethics (the “Code”). The Code applies to all of Cohu’s directors and employees including its principal executive officer, principal financial officer and principal accounting officer. The Code, among other things, is designed to promote:

	1.		Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
	2.		Full, fair, accurate, timely and understandable disclosure in reports and documents that Cohu files with, or submits to, the SEC and in other public communications made by Cohu;
	3.		Compliance with applicable governmental laws, rules and regulations;
	4.		The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
	5.		Accountability for adherence to the Code.

     The Code is available at www.cohu.com/investors/corporategovernance and is included as Exhibit 14 to Cohu’s Annual Report on Form 10-K for the year ended December 25, 2010.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding beneficial ownership of Cohu’s Common Stock as of February 18, 2011 by (i) each stockholder who has reported or is known by Cohu to have beneficial ownership of more than 5% of our common stock; (ii) each director of Cohu; (iii) each named executive officer included in the “2010 Summary Compensation Table”; and (iv) all directors and executive officers as a group.

		Beneficially owned				Common stock								Percent
Name and address of beneficial owner		common stock				equivalents(1)				Total				of class(2)
Franklin Resources, Inc. (3)			3,000,855				—				3,000,855				12.49	%
One Franklin Parkway, San Mateo, CA 94403
BlackRock, Inc. (4)			1,920,829				—				1,920,829				7.99	%
40 East 52nd Street, New York, NY 10022
Dimensional Fund Advisors LP (5)			1,876,557				—				1,876,557				7.81	%
6300 Bee Cave Road, Austin, TX 78746
T. Rowe Price Associates, Inc. (6)			1,375,400				—				1,375,400				5.72	%
100 E. Pratt Street, Baltimore, MD 21202
Nick Cedrone (7)			1,286,138				—				1,286,138				5.35	%
10 Hawthorne Road, Wellesley, MA 02481
DePrince, Race & Zollo, Inc. (8)			1,286,037				—				1,286,037				5.35	%
250 Park Ave South, Winter Park, FL 32789
Steven J. Bilodeau			5,212	(9)			3,334				8,546				*
Harry L. Casari			9,600				45,000				54,600				*
Robert L. Ciardella			10,468	(10)			50,000				60,468				*
James A. Donahue			111,309				518,313				629,622				2.57	%
Harold Harrigian			20,608				45,000				65,608				*
Roger J. Hopkins			1,637				11,876				13,513				*
Jeffrey D. Jones			4,983				44,063				49,046				*
James G. McFarlane			23,858				114,875				138,733				*
James P. Walsh			4,293				39,875				44,168				*
All directors and executive officers as a group (9 persons)			191,968				872,336				1,064,304				4.27	%

AUDIT COMMITTEE REPORT

     The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) except to the extent that Cohu specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.

Composition

     The Audit Committee of the Board of Directors is composed of four independent directors, as defined in the NASDAQ listing standards, and operates under a written charter adopted by the Board of Directors. The current members of the Audit Committee are Harold Harrigian (Chairman), Steven J. Bilodeau, Harry L. Casari and Robert L. Ciardella.

Responsibilities

     The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of Cohu’s financial statements, Cohu’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and risk assessment and risk management. The Audit Committee manages Cohu’s relationship with its independent registered public accounting firm (who report directly to the Audit Committee). The Audit Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties and receive appropriate funding, as determined by the Audit Committee, from Cohu for such advice and assistance.

     Cohu’s management has primary responsibility for preparing Cohu’s financial statements and Cohu’s financial reporting process. Cohu’s independent registered public accounting firm, Ernst & Young LLP, is responsible for expressing an opinion on (i) the conformity of Cohu’s audited financial statements with accounting principles generally accepted in the United States, and (ii) the effectiveness of Cohu’s internal control over financial reporting.

Review with Management and Independent Registered Public Accounting Firm

     In this context, the Audit Committee has reviewed and discussed the audited consolidated financial statements contained in Cohu’s Annual Report on Form 10-K for the year ended December 25, 2010 and Cohu’s effectiveness of internal control over financial reporting, together and separately, with management and the independent registered public accounting firm. The Audit Committee also discussed with Ernst & Young LLP matters required to be discussed pursuant to standards of the Public Company Accounting Oversight Board.

     Ernst & Young LLP also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence. The Audit Committee discussed with Ernst & Young LLP any relationships that may impact their objectivity and independence, and satisfied itself as to Ernst & Young’s independence.

Summary

     Based upon the Audit Committee’s discussions with management and Ernst & Young LLP and the Audit Committee’s review of the representations of management, and the reports of Ernst & Young LLP to the Audit Committee, the Audit Committee recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements be included in Cohu’s Annual Report on Form 10-K for the year ended December 25, 2010, for filing with the Securities and Exchange Commission.

     The Audit Committee appointed Ernst & Young LLP as Cohu’s independent registered public accounting firm for fiscal 2011 and recommends to stockholders that they ratify the appointment of Ernst & Young LLP as Cohu’s independent registered public accounting firm for fiscal 2011.

     This report is submitted by the Audit Committee.

Harold Harrigian (Chairman)		Steven J. Bilodeau		Harry L. Casari		Robert L. Ciardella

PRINCIPAL ACCOUNTING FEES AND SERVICES

     The following table shows the fees billed to Cohu for the audit and other services provided by Ernst & Young LLP for the years ended December 25, 2010 and December 26, 2009.

(in thousands)		2010				2009
Audit Fees (1)		$	849			$	839
Audit-Related Fees (2)			—				—
Tax Fees:
Tax Compliance (3)			14				24
Tax Planning and Advice			6				8
			20				32
All Other Fees			—				—
Total		$	869			$	871

     The Audit Committee has established pre-approval policies and procedures concerning the engagement of Cohu’s independent registered public accounting firm to perform any services. These policies require that all services rendered by Cohu’s independent registered public accounting firm be pre-approved by the Audit Committee within specified, budgeted fee amounts. In addition to the approval of all audit fees in 2010 and 2009, 100% of the non-audit fees were pre-approved by the Audit Committee.

     The Audit Committee has delegated to the Chair of the Audit Committee the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by Cohu’s independent registered public accounting firm with associated fees up to a maximum of $10,000 for any one such service, provided that the Chair shall report any decisions to pre-approve such audit-related or non-audit services and fees to the full Audit Committee at its next regular meeting.

EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Discussion and Analysis

Executive Summary and Compensation Philosophy

     Cohu’s operating results were much improved in 2010 with record sales, (increasing 88% to $322.7 million, compared to $171.3 million in 2009) and orders. Pretax income in 2010 was $30.2 million compared to a pretax loss of $13.8 million in 2009. Cohu’s goals for 2010 included achieving significantly improved sales and pretax income and certain management objectives. We generally met or exceeded our sales and pretax income goals and some, but not all, of the management objectives and, as a result, the incentive bonuses earned by our named executive officers were significantly higher than those in 2009.

     Despite the dramatic improvement in our financial performance we continued to operate the business conservatively. The annual base salaries of four of our five named executive officers in 2010 were unchanged from 2008 levels. In January 2011 base salaries for three of the named executive officers, but excluding our chief executive officer, were increased. We also managed our equity compensation program conservatively, with a “burn” rate (burn rate is the number of equity awards granted as a percentage of our total outstanding shares) over the last three years that is below the mean for our peer group.

     This Compensation Discussion and Analysis (“CD&A”) describes the principles of our executive compensation program, how we applied those principles in compensating our most senior officers for fiscal year 2010, and how we use our compensation program to drive performance. This CD&A extensively discusses how we set the challenging performance goals that apply to annual incentive bonuses. We believe that our actions in fiscal 2010 and in prior years show that we have closely linked pay to performance.

     Cohu’s compensation program is intended to meet three principal objectives: (1) attract, reward and retain officers and other key employees; (2) motivate these individuals to achieve short-term and long-term corporate goals that enhance stockholder value; and (3) support Cohu’s core values and culture by promoting internal equity and external competitiveness. To meet these objectives, Cohu has adopted the following overriding policies:

	•		Pay compensation that is competitive with the practices of other leading high technology companies; and
	•		Pay for performance by:

	•		setting challenging performance goals for our officers, and providing a short-term incentive through an incentive compensation plan that is based upon achievement of these goals; and
	•		providing long-term, significant incentives in the form of restricted stock units (“RSUs”) and/or stock options in order to retain those individuals with the leadership abilities necessary for increasing long-term stockholder value while, aligning the interests of our officers with those of our stockholders.

     The above policies guide the Compensation Committee (the “Committee”) in assessing the proper allocation between long-term compensation, current cash compensation and short-term incentive compensation. Other considerations include Cohu’s business objectives, its fiduciary and corporate responsibilities (including internal equity considerations and affordability), competitive practices and trends and regulatory requirements.

     In determining the particular elements of compensation that will be used to implement Cohu’s overall compensation policies, the Committee takes into consideration a number of factors related to Cohu’s performance, such as Cohu’s earnings per share, profitability, revenue growth and business-unit-specific operational and financial performance, strategic initiatives as well as competitive practices among our peer group.

     Cohu’s executive compensation program is overseen and administered by the Committee, which is comprised entirely of independent directors, as determined in accordance with applicable NASDAQ, SEC and Internal Revenue Code (the “Code”) rules.

     Throughout this CD&A, the individuals who served as Chief Executive Officer and Chief Financial Officer during fiscal 2010, as well as the other individuals who are included in the “2010 Summary Compensation Table” below are referred to as the “named executive officers”.

Role of Compensation Consultant in Advising the Committee

     The Committee has the authority to engage its own independent advisors to assist in carrying out its responsibilities and has done so. Compensia, an independent compensation consulting firm, has advised the Committee on various aspects of executive and director compensation, including base salaries and annual and long-term incentives. The role of Compensia for fiscal 2010 was limited to discussions with the Committee regarding base salaries for certain positions. Total fees and expenses paid to Compensia in 2010 were $3,477.

     Compensia reports to the Committee rather than to management, although they met with management for purposes of gathering information on proposals that management made to the Committee. The Committee is free to replace Compensia or hire additional consultants at any time. Compensia does not provide any other services to Cohu and receives compensation only with respect to the services provided to the Committee.

Role of Management in Setting Compensation

     The Committee, on occasion, meets with Cohu’s President and Chief Executive Officer, Mr. Donahue, and/or other of Cohu’s executives to obtain feedback and recommendations with respect to Company compensation programs, practices and packages for executives, other employees and directors. Management makes recommendations to the Committee on the base salary, cash incentive targets and equity compensation for the executive team and other employees. The Committee considers, but is not bound by and does not always accept, management’s recommendations with respect to executive compensation. The Committee has changed several of management’s compensation proposals in recent years and periodically seeks input from its independent compensation consultant prior to making any final determinations.

     Mr. Donahue attends some of the Committee’s meetings, but the Committee also holds regular executive sessions not attended by any members of management or non-independent directors. The Committee discusses Mr. Donahue’s compensation package with him, but makes decisions with respect to Mr. Donahue’s compensation without him present. The Committee has the ultimate authority to make decisions with respect to the compensation of our named executive officers, but may, if it chooses, delegate any of its responsibilities to subcommittees. The Committee has authorized Mr. Donahue to make salary adjustments and short-term cash incentive (bonus) decisions for all employees other than the named executive officers. The Committee has not delegated any of its authority with respect to the compensation of named executive officers.

Elements of Compensation

     There are six major elements that comprise Cohu’s compensation program: (i) base salary; (ii) annual incentive opportunities, including bonuses; (iii) long-term incentives, such as equity awards; (iv) deferred compensation benefits; (v) retirement benefits provided under a 401(k) plan; and (vi) executive perquisites and other benefit programs generally available to all employees. Cohu has selected these elements because each is considered useful and/or necessary to meet one or more of the principal objectives of our compensation policy. For instance, base salary and bonus target percentages are set with the goal of attracting employees and adequately compensating and rewarding them on a day-to-day basis for the time spent and the services they perform, while our equity programs are geared toward providing an incentive and reward for the achievement of long-term business objectives and retaining key talent. Cohu believes that these elements of compensation, when combined, are effective, and will continue to be effective, in achieving the objectives of our compensation program.

     The Committee reviews the compensation program on an annual basis, including each of the above elements, other than deferred compensation and retirement benefits, which are reviewed from time to time to ensure that benefit levels remain competitive but are not included in the annual determination of an executive’s compensation package. In setting compensation levels for a particular executive, the Committee takes into consideration the compensation package as a whole, and each element individually, and the executive’s past and expected future contributions to our business. With the exception of Mr. Donahue and Mr. Jones, Cohu’s Vice President, Finance and Chief Financial Officer, Cohu does not have an employment or severance agreement with its executive officers. Messrs. Donahue’s and Jones’ agreements are discussed below under the section entitled “Potential Payments Upon Termination Or Change In Control.”

Base Salary and Annual Incentive Opportunities

     Cohu makes base salaries and incentive bonuses a significant portion of the executive compensation package in order to remain competitive in attracting and retaining executive talent. Consistent with companies in our industry, during the first quarter of fiscal 2009, base salaries were reduced as part of Cohu’s actions to reduce costs and conserve cash in light of the growing global recession and deteriorating business conditions. These reduced salary levels were maintained throughout fiscal 2009 and restored to 2008 levels in January 2010. Annual incentive bonus objectives are structured in order to motivate the achievement of our business goals. The Committee determines each officer’s target total annual cash compensation (salary and bonuses) after reviewing comparable compensation information from a group of similarly sized technology companies. This “peer group” is selected based on recommendations from our independent compensation consultant with input from management and the Committee and includes a broad range of companies in the high technology industry with whom Cohu may compete for executive talent. In prior years, the Committee considered high technology competitors for executive talent and companies of similar size and scope as Cohu, as measured by market capitalization, revenue and net income to be an appropriate peer group. The peer group used in the last comparable compensation analysis that was prepared in November 2009 by Compensia consisted of the following companies:

Advanced Energy Industries
ATMI
Axcelis Technologies
Brooks Automation
Cabot Microelectronics
Cymer
Electro Scientific Industries
FormFactor
Kulicke & Soffa
LTX — Credence
Mattson Technology
MKS Instruments
Photronics
Rudolph Technologies
Semitool
Ultra Clean Holdings
Ultratech
Veeco Instruments
Verigy

     For fiscal 2011, the Committee currently intends to re-establish the peer group comparison process using, subject to modification, a similar group of companies as listed above.

     Data on the compensation practices of the above-mentioned peer group is generally gathered through searches of publicly available information, including publicly available databases. In prior years, Cohu relied upon compensation surveys and information provided in various public filings to benchmark target cash compensation levels against the above peer group. Peer group data is gathered with respect to base salary, bonus targets and all equity awards (including stock options, restricted stock and RSUs and long-term, cash-based awards). It does not include deferred compensation benefits or generally available benefits, such as 401(k) plans or health care coverage.

     Cohu’s goal is to target base pay and total cash compensation near the median level (that is, 50^th to 60^th percentile) among its peer group. However, in determining base salary, the Committee also considers other factors such as job performance, skill set, prior experience, the executive’s time in his position and/or with Cohu, internal consistency regarding pay levels for similar positions or skill levels within the Company, external pressures to attract and retain talent, and market conditions generally. Base pay and target cash compensation are analyzed by management to determine variances to our compensation targets using the combination of publicly available information and survey data as described above. Mr. Donahue uses the market data in making his recommendations to the Committee for the named executive officers.

     The base salary reductions described above that were implemented in January 2009 were intended as temporary measures and by the fourth quarter of fiscal 2009, orders for Cohu’s semiconductor equipment products had increased 81% over the second quarter. Order improvement for Cohu’s products coupled with industry growth forecasts for 2010 led the Committee, after consultation with Mr. Donahue, to determine on December 29, 2009 that the temporary salary reductions for the semiconductor equipment operations and the named executive officers should be lifted for fiscal 2010 and the base salaries returned to their fiscal 2008 levels. In March 2010 the Committee, based on the recommendation of Mr. Donahue and a review of market salary data, approved an increase in Mr. Hopkins, Vice President Sales and Service, annual base salary from $180,000 to $200,000 and in January 2011 increased the annual base salaries of Messrs. Jones, Hopkins and McFarlane as noted below.

     Effective January 31, 2011, the annual base salaries of the named executive officers are as follows:

		2010				2011
Named Executive Officer		Salary				Salary
James A. Donahue		$	505,000			$	505,000
Jeffrey D. Jones		$	225,000			$	240,000
Roger J. Hopkins		$	200,000			$	208,000
James G. McFarlane		$	218,000			$	230,000
James P. Walsh		$	215,000			$	215,000

     Payment of bonus amounts, and therefore total cash compensation, depends on the achievement of specified performance goals. Typically, achievement of the targeted goals would result in total cash compensation at approximately the targeted 50^th to 60^th percentile of Cohu’s peer group, which the Committee believes is an appropriate range to enable Cohu to attract and retain key personnel and to motivate our executives to meet Cohu’s business goals. As a result, the bonuses are targeted at a level that if achieved, and when combined with base salary, would typically result in total cash compensation to the executive in the 50^th to 60^th percentile of Cohu’s peer companies. For fiscal 2010, Mr. Donahue made recommendations to the Committee with respect to target bonus amounts, expressed as a percentage of base salary, for each of the named executive officers. The recommended bonus amounts were approved by the Committee as proposed.

     Executive Incentive Bonus Plan

     Cohu maintains an annual incentive bonus program for senior executives to encourage and award achievement of Cohu’s business goals and to assist Cohu in attracting and retaining executives by offering an opportunity to earn a competitive level of compensation. Based on these and the objectives described above, the Committee developed and approved specific performance targets for use during fiscal 2010 under our stockholder-approved 2005 Plan, in which certain of our named executive officers listed in the 2010 Summary Compensation Table participated during fiscal 2010. The 2005 Plan covers both cash and equity related compensation paid to officers and directors.

     Incentive bonuses are paid under the 2005 Plan only if the performance goals established by the Committee for the fiscal year are achieved. The Committee establishes a bonus formula that is applied to the achieved performance. The bonus formula is based on the anticipated difficulty and relative importance of achieving the performance goals. Accordingly, the bonuses paid, if any, for any given fiscal year will vary depending on actual performance. To help achieve Cohu’s goal of retaining key talent, an executive must remain an employee for the entire fiscal 2010 year in order to be eligible for any bonus under the 2005 Plan that relates to fiscal 2010. To the extent necessary to comply with Section 162(m) of the Code, the Committee does not have discretion to increase bonuses under the 2005 Plan, but retains the discretion to decrease bonuses paid even if the performance goals are achieved.

     Historically, bonuses have been payable in cash unless the executive has elected to defer all or part of the bonus into the Cohu, Inc. Deferred Compensation Plan.

     The Committee can choose a range of performance measures as specified in the 2005 Plan. Bonuses paid under the 2005 Plan are designed to reward progress toward and achievement of the performance goals. For fiscal 2010, the Committee determined that it would be appropriate to choose different performance measures for different executives. For fiscal 2010, the Committee chose three primary measures each weighted at one-third (1/3): (1) sales; (2) non-GAAP pretax income; and (3) certain other management objectives, which included, among other things, customer orders, business development, operating and financial performance and new products. For Mr. Donahue and Mr. Jones, the sales and non-GAAP pretax income target was based on Cohu’s consolidated results, and for the other named executive officers the sales and non-GAAP pretax income target was for Cohu’s primary business, Delta Design, with the exception of Mr. Hopkins whose sales and non-GAAP pretax income target was Cohu’s semiconductor equipment group, which is comprised of both Delta Design and Rasco GmbH.

     In addition, to further motivate executives to help Cohu achieve its goals in light of anticipated business conditions, the Committee determined that for the 2/3 portion of the bonus related to sales and non-GAAP pretax income, no amount would be paid under the 2005 Plan for fiscal 2010 unless such sales and non-GAAP pretax income were at least 85% and 70% of fiscal 2010 plan targeted sales and non-GAAP pretax income, respectively. To ensure that the bonuses serve the objective of increasing stockholder value and because the Committee wanted to pay maximum bonuses only upon achievement of aggressive targets, the Committee determined that the maximum bonus for any officer would be payable only if actual performance significantly exceeded our targeted operating results. The Committee intentionally set a high bar, which required very strong performance to earn a maximum bonus under the 2005 Plan. Accordingly, to further reward executives for achievement of Cohu’s overall goals, if the actual 2010 results exceeded the targeted sales and pretax income amounts, the portion of the bonus related to these factors would increase up to a maximum factor of 50%. The following table reflects the fiscal 2010 target bonus amount and the range of the potential bonus, as a percentage of base salary, for which each named executive officer was eligible under the executive incentive bonus plan for fiscal 2010:

						Range of
		Target				Potential Fiscal
Named Executive Officer		2010 Bonus				2010 Bonus
James A. Donahue			100	%		Zero to 133%
Jeffrey D. Jones			60	%		Zero to 80%
Roger J. Hopkins			50	%		Zero to 67%
James G. McFarlane			50	%		Zero to 67%
James P. Walsh			50	%		Zero to 67%

     Annual base salaries were used to compute the fiscal 2010 incentive bonus. The 2005 Plan provides that no performance bonus may exceed $1 million in any fiscal year. As noted above, we target total compensation to the 50^th to 60^th percentile of our peer group companies. As a result, the target bonuses are generally determined such that the combination of the bonus and base salary meet this targeted percentile.

     The following table describes the applicable performance measures (including relative weightings) under the executive incentive bonus plan for fiscal 2010.

Fiscal 2010 Incentive Bonus Plan Performance Measures

		Fiscal 2010 Performance Measures
Named Executive Officer		(and Relative Weightings)
James A. Donahue		(1) Achieve Cohu sales and non-GAAP pretax income objective (weighted at 2/3);
		(2) Achieve objectives relating to (a) Cohu, Inc. strategic plan, and (b) support achievement of objectives by management team (weighted at 1/3).
Jeffrey D. Jones		(1) Achieve Cohu sales and non-GAAP pretax income objective (weighted at 2/3);
		(2) Achieve objectives relating to (a) Cohu, Inc. strategic plan, and (b) other financial and operational objectives for Cohu (weighted at 1/3).
Roger J. Hopkins		(1) Achieve Delta Design and Rasco sales and non-GAAP pretax income objective (weighted at 2/3);
		(2) Achieve individual objectives relating to (a) orders, (b) market share, and (c) other operational objectives for Delta Design and Rasco (weighted at 1/3).
James G. McFarlane		(1) Achieve Delta Design sales and non-GAAP pretax income objective (weighted at 2/3);
		(2) Achieve individual objectives relating to (a) product gross margins (b) cost reductions, (c) manufacturing capacity utilization, and (d) other operational objectives for Delta Design (weighted at 1/3).

		Fiscal 2010 Performance Measures
Named Executive Officer		(and Relative Weightings)
James P. Walsh		(1) Achieve Delta Design sales and non-GAAP pretax income objective (weighted at 2/3);
		(2) Achieve individual objectives relating to (a) manufacturing transition to Asia, (b) product gross margin, (c) product on-time delivery, and (d) inventory reductions (weighted at 1/3)

     The performance measures and their respective weightings for fiscal 2010 were chosen to reflect the named executive officer’s roles and responsibilities at Cohu. The Committee determined that goals for Cohu’s sales and pretax income were appropriate for both Mr. Donahue and Mr. Jones because these measures and the other performance measures applicable to them reflect the company-wide scope of the positions held by them. The performance measures that applied to Messrs. McFarlane and Walsh included strategic and financial objectives for the Delta Design business unit, and the performance measures that applied to Mr. Hopkins included strategic and financial objectives for Cohu’s semiconductor equipment group which consists of Delta Design and Rasco. The Committee determined that business unit-specific measures were more appropriate for these officers as they provided closer correlation between the executive’s performance and his reward as opposed to performance measures based on company-wide performance.

     Likelihood of Achieving Targets. Cohu did not undertake a detailed statistical analysis of how difficult it would be for Cohu, Delta Design, Rasco and the named executive officers to achieve the relevant target levels of performance for each performance measure. However, both the Committee and management considered the likelihood of the achievement of target levels of performance when recommending and approving the performance measures and target bonuses. At the time the performance measures were set, the Committee believed that the goals would be challenging and difficult, but achievable with significant effort and skill. For fiscal 2010, it was expected that the target levels of performance would be particularly difficult to achieve because it would require delivery of growth in challenging market conditions, adroitly executing Cohu’s strategy, the development and acceptance by customers of new products, and successful entry into certain new markets in a highly competitive and volatile environment.

     Following the end of fiscal 2010, the Committee compared Cohu’s actual performance to the targeted performance for the year as specified by the Committee in early fiscal 2010, and applied the fiscal 2010 bonus formula under the 2005 Plan to this actual performance. In fiscal 2010, Cohu and Rasco met specified performance targets for sales and non-GAAP pretax income while Delta Design was slightly below its targets. Certain of the management objectives specified by the Committee were met during fiscal 2010. Additionally, based on individual contributions during fiscal 2010 not reflected in the management objectives, the Committee approved a discretionary bonus in addition to amounts earned under the bonus formula described above of $30,000 for Mr. McFarlane. Bonuses paid to our named executive officers under the 2005 Plan for fiscal 2010 were:

		Target				Bonus				Percentage of				Percentage Below
Named Executive Officer		Bonus				Earned				Fiscal 2010 Salary				Target Bonus
Mr. Donahue		$	505,000			$	498,680				99	%			1	%
Mr. Jones		$	135,000			$	133,310				59	%			1	%
Mr. Hopkins		$	90,000			$	91,155				46	%			—
Mr. McFarlane		$	109,000			$	75,389				35	%			31	%
Mr. Walsh		$	107,500			$	—				0	%			100	%

     Changes to Bonus Structure for Fiscal 2011. In March 2011, the Committee set the bonus formula and performance goals that will be used to determine bonuses, if any, under the 2005 Plan for fiscal 2011, which differ from the fiscal 2010 formula. Whether any bonuses will be paid depends on actual performance during fiscal 2011 versus the predetermined goals. The target bonus for fiscal 2011, if all goals are met, was determined by the Committee for each individual. Mr. Donahue’s target bonus is 100% of base salary; Mr. Jones’ target bonus is 60% of base salary; all other named executive officer target bonuses are 50% of base salary.

Long-Term Incentive Compensation

     Cohu provides long-term incentive compensation through awards of stock options and RSUs that generally vest over multiple years. Cohu’s equity compensation program is intended to align the interests of our officers with those of our stockholders by creating an incentive for our officers to maximize stockholder value over both the short and long run. The equity compensation program is also designed to encourage our officers to remain employed with Cohu despite a very competitive labor market. Cohu targets the value of its equity awards to be in the 50^th percentile of the peer group mentioned above, based on the information gathered from publicly available sources.

     Equity-based incentives are granted to our officers under Cohu’s stockholder-approved 2005 Plan. All stock option grants have a per share exercise price equal to the fair market value of Cohu’s Common Stock on the grant date. The Committee has not granted, nor does it intend in the future to grant, equity compensation awards to executives in anticipation of the release of material nonpublic information that is likely to result in changes to the price of Cohu Common Stock, such as a significant positive or negative earnings announcement. Similarly, the Committee has not timed, nor does it intend in the future to time, the release of material nonpublic information based on equity award grant dates. Also, because equity compensation awards typically vest over a four-year period, the value to recipients of any immediate increase in the price of Cohu’s Common Stock following a grant will be minimized.

     Our Committee regularly monitors the environment in which Cohu operates and makes changes to our equity compensation program to help us meet our goals, including achieving long-term stockholder value. In order to continue to attract and retain highly skilled employees, the Committee, based in part on recommendations from Compensia, approved changes to Cohu’s equity compensation program for fiscal 2006 and subsequent years that were designed to incentivize Cohu’s employees for their hard work and commitment to the long-term success and growth of Cohu. Beginning in fiscal 2006, both stock options and RSUs were granted. Cohu granted stock options because they can be an effective tool for meeting Cohu’s compensation goal of increasing long-term stockholder value by tying the value of the stock options to Cohu’s performance in the future. Employees are able to profit from stock options only if the price of Cohu’s Common Stock increases in value over the stock option’s exercise price. Cohu believes that options can provide effective incentives to option holders to achieve increases in the value of Cohu’s Common Stock. In 2006, Cohu began granting RSUs because they provide a more predictable value to employees than stock options, and therefore are efficient tools in retaining and motivating employees, while also serving as an incentive to increase the value of Cohu’s Common Stock. RSUs may also be efficient with respect to the use of our equity plan’s share reserve because fewer RSU shares are needed to provide a retention and incentive value similar to stock options. In granting options and RSUs, the Committee generally uses a ratio of one RSU (resulting in the potential issuance of one share of Cohu Common Stock) to stock options to purchase three shares of Cohu Common Stock. For purposes of determining the total number of options and RSUs to be granted, the Committee considers the level of accounting expense charged against Cohu earnings compared to other companies in Cohu’s peer group. The 2005 Plan provides the Committee with the discretion to determine whether grants in a particular year will be options, RSUs or a combination thereof.

     The number of options and RSUs our Committee grants to each named executive officer, and the vesting schedule for each grant, is determined based on a variety of factors, including market data collected regarding the equity grant ranges for the peer companies listed above and Cohu’s goal to award grants in line with the 50^th percentile of this group, as well as the officer’s overall responsibilities.

     On October 26, 2010, to maintain Cohu’s outstanding equity awards for the named executive officers at the 50^th percentile for their peer group, based on the recommendation of Mr. Donahue, the Committee approved the granting of stock options and RSUs to our named executive officers as follows:

						Number of
		Number				Shares of
		of				Restricted
		Options				Stock Units
Named Executive Officer		Granted				Granted
Mr. Donahue			94,750				32,417
Mr. Jones			23,750				8,750
Mr. Hopkins			13,750				5,417
Mr. McFarlane			21,250				7,917
Mr. Walsh			—				—

The options to purchase shares of Cohu common stock have an exercise price of $13.77, the fair market value of Cohu common stock on the date of grant. Consistent with other employee equity awards, these stock options and RSUs vest at the rate of 25% per year.

     The Committee periodically assesses the appropriateness of stock ownership guidelines for executive officers, including whether and to what extent executives should be restricted from selling stock acquired through equity compensation. Currently, Cohu’s stock ownership guidelines provide that, over a reasonable period of time, (i) the chief executive officer should accumulate a minimum of 40,000 shares of Cohu stock and (ii) all other executive officers 10,000 shares of Cohu stock. The Committee determines the reasonable amount of time and monitors compliance with these stock ownership guidelines.

Deferred Compensation Plan

     Cohu maintains a non-qualified deferred compensation plan, the Cohu, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”). Under the Deferred Compensation Plan, Cohu’s executive officers or other employees designated by the Committee may elect to voluntarily defer up to 25% of their base salary and/or up to 100% of their incentive bonus, thereby allowing the participating employee to defer taxation on such amounts.

     Cohu may match participant contributions to the Deferred Compensation Plan on up to 4% of the participant’s annual salary in excess of the specified annual compensation limit allowed under the Code for contributions under our 401(k) plan. The annual limit, which is indexed, was $245,000 for both 2010 and 2009. The Cohu matching contributions and any deemed investment earnings attributable to these contributions will be 100% vested when the participant has two years of service with Cohu. Prior to that time, such amounts are unvested. Participant contributions and deemed investment earnings are 100% vested at all times. Due to the continuing global recession and resulting deterioration of business conditions in the semiconductor equipment industry, Cohu did not match any participant contributions to the Deferred Compensation Plan made for fiscal 2010. For additional information on the Deferred Compensation Plan see “2010 Nonqualified Deferred Compensation” included below.

Retirement Benefits Under the 401(k) Plan, Executive Perquisites and Generally Available Benefits

     The Cohu Employees’ Retirement Plan, a tax qualified 401(k) plan (the “401(k) Plan”), was implemented on January 1, 1978. The majority of Cohu’s employees, including the named executive officers, who are at least 21 years of age, are eligible to enroll in the 401(k) Plan. The participant may contribute a percentage of his or her annual compensation subject to maximum annual contribution limitations. Cohu may match participant contributions on up to 4% of annual employee compensation not to exceed specified annual limits. The amounts contributed by Cohu are vested 10% after one year of participation, another 20% after two years, another 20% after three years and an additional 50% after 4 years. In January 2009, Cohu suspended the employer matching contribution under the 401(k) Plan for all employees due to the continuing global recession and resulting deterioration of business conditions in the semiconductor equipment industry. The employer matching contribution continued to be suspended and, as a result, no matching contributions were made in 2010. Generally, the maximum annual amount that any participant could contribute to the 401(k) Plan in 2010 was $16,500 and the maximum employer matching contribution based on the 2010 Code compensation limitation of $245,000 was $9,800.

     In fiscal 2010, the named executive officers were eligible to receive health care insurance coverage and additional benefits that are generally available to other Cohu employees. These benefit programs include the employee stock purchase plan, medical, dental and vision insurance, long-term and short-term disability insurance, life and accidental death and dismemberment insurance, health and dependent care flexible spending accounts, business travel insurance, relocation/expatriate programs and services, educational assistance, employee assistance and certain other benefits.

     Commencing in 1989, Cohu began paying certain health care related costs of Cohu’s executive officers and certain retired Board members, including insurance premiums and non-insurance covered costs, such as prescription copays and other health care costs. In fiscal 2010, Cohu paid for Mr. Donahue (i) the entire cost of his health care premiums and (ii) his out-of-pocket medical costs, such as prescription copays and other non-insurance covered health care costs. These medical benefits continue after retirement if certain length of service and age requirements are satisfied at the time of retirement. In fiscal 2010, Cohu also provided Messrs. Donahue, Jones, Hopkins and McFarlane with automobile expense allowances.

     The 401(k) Plan and other generally available benefit programs allow Cohu to remain competitive for employee talent and Cohu believes that the availability of the benefit programs generally enhances employee productivity and loyalty to Cohu. The main objectives of Cohu’s benefits programs are to give our employees access to quality healthcare, financial protection from unforeseen events, assistance in achieving retirement financial goals, enhanced health and productivity and to provide support for global workforce mobility, in full compliance with applicable legal requirements. These generally available benefits typically do not specifically factor into decisions regarding an individual executive’s total compensation or equity award package.

     On an informal, annual basis, Cohu benchmarks its overall benefits programs against its peers. We also evaluate the competitiveness of our 401(k) Plan as related to similar plans of our peer group members by analyzing the dollar value to an employee and the dollar cost to Cohu for the benefits under the applicable plan using a standard population of employees. We analyze changes to our benefits programs in light of the overall objectives of the program, including the effectiveness of the retention and incentive features of such programs and our targeted percentile range.

     In 2010, Cohu provided certain benefits to Mr. McFarlane related to an extended overseas assignment. This assignment was made at the request of Cohu. These benefits, that are generally customary benefits provided to other employees on such assignments, included (i) housing, transportation, moving and other living expense allowances; and (ii) assistance in preparation of tax returns and tax equalization such that Mr. McFarlane will not pay any more (or less) income tax had he not accepted the assignment.

Compensation of Chief Executive Officer

     During fiscal 2010, Mr. Donahue received a salary of $505,003. In setting Mr. Donahue’s salary and target bonus award, the Committee relies on market-competitive pay data and the strong belief that the Chief Executive Officer significantly and directly influences Cohu’s overall performance. The Committee also considers the overall compensation policies discussed above. As explained under “Executive Incentive Bonus Plan” above, applying the bonus formula put into place at the beginning of fiscal 2010 to Cohu’s actual performance for the year resulted in a bonus to Mr. Donahue of $498,680.

     Mr. Donahue’s compensation is higher than the compensation of other named executive officers due to the nature and broad scope of a chief executive officer’s leadership responsibilities, the unique accountability a chief executive officer carries with respect to the company’s performance, and the particularly competitive market for attracting and retaining highly talented chief executive officers.

Accounting and Tax Considerations

     In designing its compensation programs, Cohu takes into consideration the accounting and tax effect that each element will or may have on Cohu and the executive officers and other employees as a group. Cohu aims to keep the expense related to its compensation programs as a whole within certain levels. When determining how to apportion between differing elements of compensation, the goal is to meet Cohu’s objectives while maintaining cost neutrality. For instance, if Cohu increases benefits under one program resulting in higher compensation expense, Cohu may seek to decrease costs under another program in order to avoid compensation expense that is above the desired level. As a further example, in determining whether to grant RSUs instead of stock options, Cohu considers the accounting impact and has tried to keep the overall equity compensation cost generally the same as when Cohu granted only stock options. Cohu recognizes a charge to earnings for accounting purposes when either stock options or RSUs are granted. Since RSUs provide immediate value to employees once vested, while the value of stock options is dependent on future increases in the value of Cohu Common Stock, Cohu may be able to realize the same retention value from a smaller number of RSUs, as compared to stock options. Cohu also considers that the 401(k) Plan and the Deferred Compensation Plan provide tax-advantaged retirement planning vehicles for our executives and takes into account that Cohu generally may not take a deduction with respect to amounts deferred under the Deferred Compensation Plan until such amounts are paid out.

     In addition, Cohu has not provided any executive officer or director with a gross-up or other reimbursement for tax amounts the executive might pay pursuant to Section 280G or Section 409A of the Code. Section 280G and related Code sections provide that executive officers, directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of Cohu that exceeds certain limits, and that Cohu or its successor could lose a deduction on the amounts subject to the additional tax.

     In determining which elements of compensation are to be paid, and how they are weighted, Cohu also takes into account whether a particular form of compensation will be considered “performance-based” compensation for purposes of Section 162(m) of the Code. Under Section 162(m), Cohu generally receives a federal income tax deduction for compensation paid to any of its named executive officers only if the compensation is less than $1 million during any fiscal year or is “performance-based” under Section 162(m). The 2005 Plan permits our Committee to pay compensation that is “performance-based” and thus fully tax-deductible by Cohu. Our Committee currently intends to continue seeking a tax deduction for all of Cohu’s executive compensation, to the extent we determine it is in the best interests of Cohu. The stock options we grant to executives are intended to qualify as performance-based compensation under Section 162(m). However, RSUs that vest based on continued employment including the RSUs granted by Cohu do not qualify as performance-based compensation under Section 162(m).

Compensation Committee Report

     The Committee has reviewed and discussed with management the Compensation Discussion and Analysis for fiscal 2010. Based on such review and discussions, the Committee recommended to the Board, and the Board has approved, that the Compensation Discussion and Analysis be included in Cohu’s Proxy Statement for its 2011 Annual Meeting of Stockholders.

     This report is submitted by the Committee.

Harry L. Casari (Chairman)		Steven J. Bilodeau		Robert L. Ciardella		Harold Harrigian

2010 SUMMARY COMPENSATION TABLE

     The following table shows compensation information for fiscal 2010 for the named executive officers.

																										Change in
																										Pension
																										Value and
																						Non-Equity				Nonqualified
																						Incentive				Deferred
														Stock				Option				Plan				Compensation				All Other
						Salary				Bonus				Awards				Awards				Compensation				Earnings				Compensation				Total
Name and Principal Position		Year				($)				($)(1)				($)(2)				($)(3)				($)(4)				($)(5)				($)(6) (7)				($)
James A. Donahue			2010				505,003				—				416,234				514,493				498,680				—				41,222				1,975,632
President and			2009				405,941				—				—				451,200				252,500				—				52,192				1,161,833
Chief Executive Officer			2008				512,811				—				—				—				247,845				—				55,323				815,979
Jeffrey D. Jones			2010				225,014				—				112,350				128,963				133,310				—				6,272				605,909
Vice President, Finance and			2009				202,942				—				—				117,500				72,500				—				6,275				399,217
Chief Financial Officer			2008				231,074				—				—				—				55,213				—				14,235				300,522
Roger J. Hopkins (8)			2010				197,201				—				69,554				74,663				91,155				—				7,083				439,656
Vice President,			2009				162,377				—				—				75,500				51,000				—				6,974				295,851
Sales and Service			2008				115,329				28,000				91,114				83,600				—				—				4,731				322,774
Delta Design/Rasco
James G. McFarlane			2010				218,504				30,000				101,654				115,388				75,389				—				118,455				659,390
Senior Vice President			2009				197,083				—				—				105,750				68,600				—				109,384				480,817
Delta Design			2008				223,406				—				—				—				66,423				—				121,256				411,085
James P. Walsh			2010				215,010				3,101				—				—				—				—				172				218,283
Vice President, Manufacturing			2009				193,916				—				—				105,750				43,000				—				173				342,839
Delta Design			2008				213,102				—				—				—				53,147				—				9,163				275,412

	(a)		Cohu’s matching contributions in fiscal 2008 under the Cohu 401(k) Plan (which is more fully described elsewhere herein under the heading “Retirement Benefits Under the 401(k) Plan, Executive Perquisites and Generally Available Benefits”). There were no matching contributions in fiscal 2010 or 2009.
	(b)		The value attributable to life insurance benefits provided by Cohu (such amount is taxable to the recipient).
	(c)		Monthly automobile expense allowance paid by Cohu (such amount is taxable to the recipient).
	(d)		Payment of medical insurance premiums and non-covered medical expenses for Mr. Donahue.

2010 GRANTS OF PLAN-BASED AWARDS

     The following table shows all plan-based awards granted to the named executive officers during fiscal 2010, which ended on December 25, 2010. The option and stock awards identified in the table below are also reported in the “Outstanding Equity Awards at December 25, 2010” table included below.

																														All Other				All Other
						Estimated Future												Estimated Future												Stock				Option				Exercise				Grant
						Payouts Under Non-												Payouts Under												Awards:				Awards:				or Base				Date Fair
						Equity Incentive												Equity Incentive												Number of				Number of				Price				Value of
						Plan Awards (1)												Plan Awards (2)												Shares of				Securities				of				Stock and
						Thres-								Maxi-				Thres-								Maxi-				Stock or				Underlying				Option				Option
		Grant				hold				Target				mum				hold				Target				mum				Units				Options				Awards				Awards
Name		Date				($)				($)				($)				($)				($)				($)				(#)(3)				(#)(4)				($/sh)(5)				($)(6)
James A. Donahue			10/26/2010				—				—				—				—				—				—				32,417				94,750				13.77				930,727
			N/A				0				505,000				672,000				—				—				—				—				—				—				—
Jeffrey D. Jones			10/26/2010				—				—				—				—				—				—				8,750				23,750				13.77				241,313
			N/A				0				135,000				180,000				—				—				—				—				—				—				—
Roger J. Hopkins			10/26/2010				—				—				—				—				—				—				5,417				13,750				13.77				144,217
			N/A				0				90,000				121,000				—				—				—				—				—				—				—
James G. McFarlane			10/26/2010				—				—				—				—				—				—				7,917				21,250				13.77				217,042
			N/A				0				109,250				146,000				—				—				—				—				—				—				—
James P. Walsh			—				—				—				—				—				—				—				—				—				—				—
			N/A				0				107,500				144,000				—				—				—				—				—				—				—

OUTSTANDING EQUITY AWARDS AT DECEMBER 25, 2010

     The following table shows all outstanding equity awards held by each named executive officer at the end of fiscal 2010, which ended on December 25, 2010. The options with an expiration date of October 26, 2020 are also reported in the “2010 Grants of Plan-Based Awards” table included elsewhere herein.

																						STOCK AWARDS
																																		Equity
																														Equity				Incentive
																														Incentive				Plan
																														Plan				Awards:
		OPTION AWARDS																												Awards:				Market
										Equity																				Number				or Payout
										Incentive																				of				Value of
										Plan																Market				Unearned				Unearned
										Awards:																Value of				Shares,				Shares,
						Number of				Number of												Number				Shares or				Units or				Units or
		Number of				Securities				Securities												of Shares				Units of				Other				Other
		Securities				Underlying				Underlying												or Units				Stock				Rights				Rights
		Underlying				Unexercised				Unexercised												of Stock				That				That				That
		Unexercised				Options				Unearned				Option				Option				That Have				Have Not				Have Not				Have Not
		Options (#)(1)				(#)(1)				Options				Exercise				Expiration				Not				Vested				Vested				Vested
Name		Exercisable				Unexercisable				(#)(2)				Price ($)				Date				Vested (#)				($)(3)				(#)(2)				($)(2)
James A.			70,000				—				—				18.20				1/23/2012				—				—				—				—
Donahue			70,000				—				—				14.27				1/28/2013				—				—				—				—
			70,000				—				—				17.50				4/19/2014				—				—				—				—
			110,000				—				—				16.89				1/6/2015				—				—				—				—
			62,750				—				—				16.40				8/17/2016				—				—				—				—
			39,563				13,187				—				15.50				12/4/2017				4,604				73,572				—				—
			48,000				144,000				—				7.32				3/20/2019				—				—				—				—
			—				94,750				—				13.77				10/26/2020				32,417				518,024				—				—
Jeffrey D.			8,750				—				—				16.40				8/17/2016				—				—				—				—
Jones			10,313				3,437				—				15.50				12/4/2017				1,354				21,637				—				—
			12,500				37,500				—				7.32				3/20/2019				—				—				—				—
			—				23,750				—				13.77				10/26/2020				8,750				139,825				—				—
Roger J.			6,876				6,874				—				17.75				5/5/2018				2,708				43,274				—				—
Hopkins			—				15,000				—				7.32				3/20/2019				—				—				—				—
			—				7,500				—				8.15				4/21/2019				—				—				—				—
			—				13,750				—				13.77				10/26/2020				5,417				86,564				—				—
James G.			20,000				—				—				14.68				10/2/2011				—				—				—				—
McFarlane			20,000				—				—				11.66				10/14/2012				—				—				—				—
			15,000				—				—				18.35				12/11/2013				—				—				—				—
			15,000				—				—				15.04				10/27/2014				—				—				—				—
			13,750				—				—				16.40				8/17/2016				—				—				—				—
			8,625				2,875				—				15.50				12/4/2017				1,166				18,633				—				—
			11,250				33,750				—				7.32				3/20/2019				—				—				—				—
			—				21,250				—				13.77				10/26/2020				7,917				126,514				—				—
James P.			7,500				—				—				17.30				6/15/2014				—				—				—				—
Walsh			3,750				—				—				15.04				10/27/2014				—				—				—				—
			8,750				—				—				16.40				8/17/2016				—				—				—				—
			8,625				2,875				—				15.50				12/4/2017				1,166				18,633				—				—
			—				33,750				—				7.32				3/20/2019				—				—				—				—

2010 OPTION EXERCISES AND STOCK VESTED

     The following table shows all stock options exercised and the value realized upon exercise and all stock awards vested and the value realized upon vesting by the named executive officers during fiscal 2010 which ended on December 25, 2010.

		Option Awards									Stock Awards
										Number
		Number				Value				of Shares
		of Shares				Realized				Acquired				Value
		Acquired on				on Exercise				on Vesting				Realized on
Name		Exercise (#)				($)(1)				($)(2)				Vesting ($)(3)
James A. Donahue			60,000				111,600				10,041				135,312
Jeffrey D. Jones			—				—				2,291				31,817
Roger J. Hopkins			7,500				56,800				1,354				21,799
James G. McFarlane			30,000				36,297				2,521				34,007
James P. Walsh			11,250				78,413				2,104				28,983