SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12

COHU, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

----------------------------------------------------------------------

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

----------------------------------------------------------------------

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

----------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

----------------------------------------------------------------------

(5) Total fee paid:

----------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

----------------------------------------------------------------------

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

----------------------------------------------------------------------

(3) Filing Party:

----------------------------------------------------------------------

(4) Date Filed:

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2

[COHU, INC. LOGO]
5755 Kearny Villa Road
San Diego, California 92123-1111

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 2001

TO OUR STOCKHOLDERS:

The Annual Meeting of Stockholders of Cohu, Inc. ("Cohu") will be held at
the Four Points Sheraton Hotel, 8110 Aero Drive, San Diego, California 92123 on
Tuesday, May 15, 2001, at 2:00 p.m. Pacific Time, for the following purposes:

1. To elect two directors, each for a term of three years.

2. To approve an amendment to the Cohu 1997 Employee Stock Purchase Plan,
increasing the shares of stock subject to the Plan by 400,000.

3. To approve amendments to the Cohu 1996 Outside Directors Stock Option
Plan, increasing the shares of stock subject to the Plan by 100,000 and
providing for automatic annual option grants.

4. To act upon such other matters as may properly come before the meeting
or any adjournment thereof.

Only stockholders of record of Cohu at the close of business on March 19,
2001 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.

Please sign, date and return the enclosed proxy in the envelope enclosed for
your convenience. Alternatively, certain 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.

By Order of the Board of Directors,

/s/ John H. Allen
---------------------------------------
John H. Allen
Secretary
San Diego, California
April 5, 2001

- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT

IN ORDER TO INSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
- --------------------------------------------------------------------------------

COHU, INC.
5755 Kearny Villa Road
San Diego, California 92123-1111

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"), of your Proxy
for use at the Annual Meeting of Stockholders to be held on Tuesday, May 15,
2001, at 2:00 p.m. Pacific Time at the Four Points Sheraton Hotel, 8110 Aero
Drive, San Diego, California 92123 (the "Meeting"). This Proxy Statement and the
accompanying Proxy are being mailed to all stockholders on or about April 5,
2001. Any stockholder may revoke a proxy at any time prior to its exercise by
filing a later dated proxy or written notice of revocation with Cohu's Secretary
or by voting in person at the Meeting.

On March 19, 2001, the record date fixed by the Board of Directors (the
"Record Date"), Cohu had outstanding 20,349,109 shares of Common Stock.
Stockholders have one vote for each share on all items to be considered at the
Meeting. In the election of directors stockholders may, under certain
circumstances, 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.

To conduct any business at the Meeting, a quorum must be present. A quorum
generally consists of a majority of the shares entitled to vote being present or
represented by proxy at the Meeting. If a quorum is present, a plurality vote
(i.e. an excess of votes over those cast for an opposing candidate) of the
shares present, in person or by proxy, at the Meeting and entitled to vote is
required for the election of directors. The affirmative vote of a majority of
shares present in person or represented by proxy is required for approval of the
amendments to the Cohu 1997 Employee Stock Purchase and 1996 Outside Directors
Stock Option Plans. Abstentions will not be considered to be a vote "for" or
"against" a proposal, but will be included in determining whether a quorum is
present. If a broker indicates on the enclosed proxy or its substitute that it
does not have discretionary authority as to certain shares to vote on a
particular matter ("broker non-votes"), those shares will be included in
determining whether a quorum is present but will not be considered as present
with respect to that matter. Any proxy that is returned not marked as to a
particular item will be voted FOR the election of directors, FOR the approval of
the amendment to the Cohu 1997 Employee Stock Purchase Plan and FOR the approval
of the amendments to the Cohu 1996 Outside Directors Stock Option Plan.

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 offices, 5755 Kearny Villa Road, San Diego,
California 92123-1111, for the examination of any stockholder during normal
business hours for a period of ten days immediately prior to the Meeting.

This solicitation is made by the Board of Directors of Cohu. Proxies will be
solicited by mail and may be solicited in person or by telephone and facsimile
transmission. Directors and officers may engage in such solicitation but will
not be entitled to any additional compensation for such efforts. Cohu will bear
the entire cost of any such solicitation. Votes will be tabulated by Cohu's
Transfer Agent, Mellon Investor Services LLC.

1
4

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 two directors are to be elected for a term expiring in
2004. It is intended that the shares represented by proxies in the accompanying
form will be voted by the proxy holders for the election of the two nominees
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 any 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. THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE
TWO NOMINEES NAMED BELOW.

NOMINEES FOR TERMS EXPIRING IN 2004 - CLASS 1

DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---------- --- ------------------------------------------------------------- --------

James W. Barnes.......... 71 Retired President and Chief Executive Officer of Cohu from 1983
1983 to March 1996

James A. Donahue......... 52 President and Chief Executive Officer of Cohu since June 2000; 1999
President and Chief Operating Officer of Cohu from October
1999 to June 2000; President of Cohu Semiconductor Equipment
Group from May 1998 to October 1999; President of Delta Design,
Inc., a wholly owned subsidiary of Cohu, since May 1983

INFORMATION CONCERNING OTHER DIRECTORS

DIRECTORS WHOSE TERMS EXPIRE IN 2002 - CLASS 2

DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---------- --- ------------------------------------------------------------- --------

Gene E. Leary............ 80 Retired executive at Honeywell, Inc. and Control Data Corporation 1976

Charles A. Schwan........ 61 Chairman of the Board; Retired Chief Executive Officer of Cohu 1990
since June 2000; Chairman and Chief Executive Officer of Cohu
from July 1999 to June 2000; President and Chief Executive Officer
of Cohu from March 1996 to July 1999; Executive Vice President
and Chief Operating Officer of Cohu from September 1995 to
March 1996; Vice President, Finance of Cohu from 1983 until
September 1995

DIRECTORS WHOSE TERMS EXPIRE IN 2003 - CLASS 3

DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---------- --- ------------------------------------------------------------- --------

Harry L. Casari.......... 64 Retired Partner, Ernst & Young LLP; Mr. Casari is also a 1995
director of Meade Instruments

Frank W. Davis........... 86 Retired President of Convair Aerospace, 1976
Division of General Dynamics

Harold Harrigian......... 66 Retired Partner and Director of Corporate Finance, 1998
Crowell, Weedon & Co.; Mr. Harrigian is also a director
of First Mortgage Corporation

2
5

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 15, 2001 by (i) each person
known by Cohu, based on information provided by such person, to own more than 5%
of Cohu's Common Stock; (ii) each director of Cohu; (iii) each named executive
officer included in the "Summary Compensation Table"; and (iv) all directors and
executive officers as a group.

AMOUNT & NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS (2)
---------------------------- ------------------------- ------------

Franklin Advisory Services, LLC............. 1,424,900(3) 7.00%
One Parker Plaza, Sixteenth Floor
Fort Lee, NJ 07024
Nicholas J. Cedrone......................... 1,336,138(4) 6.57%
One Monarch Drive
Littleton, MA 01460
John H. Allen............................... 95,000 *
James W. Barnes............................. 386,814 1.90%
Harry L. Casari............................. 11,600 *
Frank W. Davis.............................. 50,400 *
James A. Donahue............................ 186,100 *
Harold Harrigian............................ 6,600 *
Gene E. Leary............................... 35,000 *
Charles A. Schwan........................... 347,792 1.70%
All directors and executive officers
as a group (8 persons).................... 1,119,306 5.41%

- -----------------
* Less than 1%

(1) Includes 76,472, 10,000, 5,000, 91,288, 5,000, 10,000, 135,500 and 333,260
shares issuable upon exercise of stock options held by Mr. Allen, Mr.
Casari, Mr. Davis, Mr. Donahue, Mr. Harrigian, Mr. Leary and Mr. Schwan and
all directors and executive officers as a group, respectively, that were
exercisable on, or exercisable within 60 days of, February 15, 2001.

(2) Computed on the basis of 20,344,984 shares of common stock outstanding as of
February 15, 2001, plus, with respect to those persons holding options to
purchase common stock exercisable within 60 days of February 15, 2001, the
number of shares of common stock issuable upon exercise thereof.

(3) According to Schedule 13G filed with the Securities and Exchange Commission
on January 29, 2001.

(4) According to Schedule 13G filed with the Securities and Exchange Commission
on February 12, 2001.

3
6

BOARD OF DIRECTORS AND COMMITTEES

ORGANIZATION OF THE BOARD OF DIRECTORS

The Board of Directors held a total of eight meetings during 2000.

The Board of Directors has established two standing committees: the Audit
Committee and the Compensation Committee. The Audit Committee, composed of
Messrs. Leary (Chairman), Casari, Davis and Harrigian, is the principal link
between the Board and Cohu's independent auditors and monitors audit, internal
accounting control and financial reporting processes and procedures. The Audit
Committee held three meetings during 2000. The Compensation Committee, also
consisting of Messrs. Davis (Chairman), Casari, Harrigian and Leary, recommends
to the Board of Directors the compensation structure for the officers of Cohu
and each subsidiary. In addition, the Compensation Committee has the
responsibility for administration of Cohu's stock option, stock purchase and
incentive compensation plans. The Compensation Committee held three meetings in
2000.

DIRECTORS' COMPENSATION

Outside Directors receive (i) an annual retainer of $8,500; (ii) $500 per
meeting attended in person to a maximum of $2,500 annually; and (iii) $1,000
annually for membership on one or more active committees. The Cohu 1996 Outside
Directors Stock Option Plan currently provides that each Outside Director will
receive an automatic grant of an option to purchase 10,000 shares (20,000 shares
adjusted for 1999 stock split) of Cohu's Common Stock upon their appointment to
the Board. See Proposal No. 3, "Amendments to the Cohu, Inc. 1996 Outside
Directors Stock Option Plan". Cohu pays the cost of health care insurance
premiums for certain directors and their spouses. Pursuant to an employment
agreement with Cohu, Mr. Schwan is paid an annual salary of $30,000.

COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table discloses compensation paid to Cohu's Chief Executive
Officer and the other executive officers whose aggregate cash compensation
exceeded $100,000 (the "Named Executive Officers") during the last three years.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) COMPENSATION($)(2)
--------------------------- ---- --------- ----------- ------------ ------------------

Charles A. Schwan .................. 2000 185,765 150,810 -- 13,463
Chairman of the Board, Former 1999 322,186 291,060 50,000 24,530
President & Chief Executive 1998 298,308 225,680 50,000 21,427
Officer(3)

James A. Donahue ................... 2000 330,777 319,900 60,000 26,027
President & Chief Executive 1999 271,019 274,800 60,000 21,833
Officer(3) 1998 227,341 202,950 30,000 18,118

John H. Allen .................... . 2000 212,313 180,972 25,000 15,731
Vice President, Finance & Chief 1999 191,008 158,760 50,000 13,991
Financial Officer, Secretary 1998 169,847 114,005 20,000 11,520

- -----------
(1) The amounts shown in this column reflect payments under Cohu's Incentive
Bonus Plan for key executives.

(2) The amounts shown in this column reflect Cohu's contributions to the
Employees' Retirement 401(k) Plan and the Key Executive Long Term Incentive
Plan.

(3) Mr. Schwan retired as Chief Executive Officer on June 30, 2000 and Mr.
Donahue was promoted to Chief Executive Officer on that date.

4
7

INCENTIVE BONUS PLAN. Cohu had an incentive bonus plan for key executives in
effect through 2000. Under this plan, corporate officers may receive incentive
compensation based on overall corporate earnings performance and the principal
executive of each division and subsidiary may receive incentive compensation
based upon the earnings performance of the operations they manage. In each case,
the incentive compensation is determined with reference to a pre-tax earnings
"target" fixed by the Compensation Committee, or in the case of divisions and
subsidiaries, by Cohu's management.

RETIREMENT PLAN. The Cohu Employees' Retirement 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 and complete six months of
service are eligible to enroll in this Plan. The participant may contribute a
percentage of his or her annual compensation subject to maximum annual
contribution limitations. Cohu matches participant contributions 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 10%
after two years and an additional 20% each year thereafter to the full 100%.
Generally, none of the contributions nor accumulated earnings are taxable to the
participant until withdrawn. The maximum nontaxable annual amount that a
participant could contribute in 2000 was $10,500.

KEY EXECUTIVE LONG TERM INCENTIVE PLAN. Cohu adopted the Key Executive Long
Term Incentive Plan in 1994. Under this plan, corporate officers and the
principal executives of each division and subsidiary may elect to defer a
portion of their current compensation. Cohu will then match participant
contributions up to 4% of the executive's compensation in excess of specified
annual limits. These combined funds may be used by Cohu to purchase a
specifically designed life insurance policy on the executive's life. Cohu is not
entitled to a corporate tax deduction until the year in which the executive
recognizes taxable income in connection with the plan. However, this plan is
designed to compensate Cohu for the present value of the deferred tax deduction.
Upon the executive's termination of employment Cohu reserves in any policy for
that executive an amount which is actuarially sufficient to provide a death
benefit equal to the present value of Cohu's deferred tax deduction. The
remaining cash value of the policy is available for borrowing by Cohu for
payment to the executive in accordance with a schedule determined in the sole
discretion of Cohu. Upon the executive's death, any policy proceeds will be paid
to Cohu. Then the executive's beneficiaries will receive from Cohu the amount of
the net proceeds (after repayment of all borrowings by Cohu), reduced by the
present value of any tax deduction deferred by Cohu and increased by the value
of Cohu's tax deduction available as a result of the payment of the net
proceeds.

TERMINATION AGREEMENTS. Cohu has entered into Termination Agreements with
Mr. Donahue and Mr. Allen pursuant to which those executives would be entitled
to a payment in the event of a termination of employment for specified reasons
following a change of control of Cohu. For this purpose, a change of control of
Cohu means a merger or consolidation of Cohu (except with a wholly owned
subsidiary), a sale by Cohu of all or substantially all of its assets, the
acquisition of beneficial ownership of a majority of the outstanding voting
stock of Cohu by any person, entity or affiliated group or a change in the
identities of a majority of the directors of Cohu within a period of thirty
consecutive months resulting in whole or in part from the election of persons
who were not management nominees. Termination of employment for purposes of
these agreements means a discharge of the executive by Cohu, other than for
specified causes including death, disability, wrongful acts, habitual
intoxication, habitual neglect of duties or normal retirement. Termination also
includes resignation following the occurrence of an adverse change in the
executive's position, duties, compensation or work conditions. The amounts
payable under the agreements will change from year to year based on the
executive's compensation. In the event of a termination in 2001 following a
change of control, the amounts payable to Mr. Donahue and Mr. Allen would be
approximately $1,514,000 and $950,000, respectively.

EMPLOYMENT AGREEMENT. Charles A. Schwan resigned as President & Chief
Executive Officer of Cohu effective June 30, 2000. Cohu and Mr. Schwan entered
into an employment agreement for a three-year period commencing June 30, 2000.
Pursuant to this agreement, Mr. Schwan agreed to provide Cohu with employment
services under the direction and control of Cohu on a part-time basis. For such
services Mr. Schwan will be paid an annual salary of $30,000. Mr. Schwan has
continued to serve as Chairman of Cohu's Board of Directors, subject to
reelection by the stockholders at the conclusion of his term in office.

5
8

OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information on grants of options to purchase
Cohu's Common Stock made to the Named Executive Officers during the year ended
December 31, 2000.

INDIVIDUAL GRANTS
-------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES PERCENT OF AT ASSUMED ANNUAL RATES OF
UNDERLYING TOTAL OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED EXERCISE OR FOR OPTION TERM(2)
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION --------------------------
NAME (#)(1) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ------- ---------

James A. Donahue... 60,000 8.60% 13.88 10/20/10 523,800 1,327,200
John H. Allen...... 25,000 3.58% 13.88 10/20/10 218,250 553,000

- -------------------
(1) Consists of stock options, which (i) were granted at an exercise price of
100% of the market price of the underlying shares on the date of grant, (ii)
become exercisable over four years at the rate of one-fourth each year and
(iii) expire ten years from the date of grant. The options were granted
under Cohu's 1998 Stock Option Plan.

(2) The "potential realizable value" shown represents the potential gains based
on annual compound stock price appreciation of 5% and 10% from the date of
grant through the full 10-year option term, net of exercise price, but
before taxes associated with the exercise. The amounts represent assumed
rates of appreciation only based on the Securities and Exchange Commission
rules and do not represent Cohu's estimate of the possible future
appreciation in Cohu's Common Stock or gains, if any, that may ultimately be
realized by the above option holders.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table provides information on option exercises in 2000 by the
Named Executive Officers and the value of such officers' unexercised options at
December 31, 2000.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ON EXERCISE REALIZED ----------------------------- ----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- --------- ----------- ------------- ----------- -------------

Charles A. Schwan ..... 21,000 838,000 120,500 70,000 478,615 73,425
James A. Donahue ...... 14,304 684,876 68,788 125,000 244,928 89,950
John H. Allen ......... 23,528 1,087,721 58,972 77,500 146,783 73,825

- ---------------
(1) Calculated solely on the basis of the fair market value of Cohu's Common
Stock on the exercise date or at December 31, 2000, minus the aggregate
exercise price and before taxes associated with such exercise. Accordingly,
such amounts may bear no relationship to gains, if any, that may be realized
upon the ultimate disposition of the shares. The closing price of Cohu's
Common Stock on December 31, 2000 as reported on the Nasdaq Stock Market was
$13.94.

6
9

AUDIT COMMITTEE REPORT

Notwithstanding any statement to the contrary in any of Cohu's previous or
future filings with the Securities and Exchange Commission, this Report shall
not be incorporated by reference into any such filings.

COMPOSITION. The Audit Committee of the Board of Directors is composed of
four independent directors, as defined by Nasdaq rules, and operates under a
written charter adopted by the Board of Directors, a copy of which is attached
as Appendix A. The members of the Audit Committee are Gene E. Leary (Chairman),
Harry L. Casari, Frank W. Davis and Harold Harrigian.

RESPONSIBILITIES. The responsibilities of the Audit Committee include
recommending to the Board of Directors a firm to be engaged as Cohu's
independent auditors. Management is responsible for Cohu's internal controls and
financial reporting processes. The independent auditors are responsible for
performing an independent audit of Cohu's consolidated financial statements in
accordance with generally accepted auditing standards and for issuing a report
thereon. The Audit Committee's responsibility is to oversee the audit process
and the activities of Cohu's internal staff.

REVIEW WITH MANAGEMENT AND INDEPENDENT AUDITORS. In this context, the Audit
Committee has met and held discussions with management and the independent
auditors. Management represented to the Audit Committee that Cohu's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles, and the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent auditors.
The Audit Committee discussed with the independent auditors matters required to
be discussed under Statement on Auditing Standards No. 61, Communication with
Audit Committees.

Cohu's independent auditors also provided to the Audit Committee the written
disclosures and the letter required by Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees, and the Audit Committee
discussed with the independent auditors, Ernst & Young LLP, the firm's
independence.

SUMMARY. Based upon the Audit Committee's discussions with management and
the independent auditors and the Audit Committee's review of the representations
of management, and the report of the independent auditors to the Audit
Committee, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in Cohu's Annual Report on Form
10-K for the year ended December 31, 2000, as filed with the Securities and
Exchange Commission.

SUBMITTED BY THE AUDIT COMMITTEE OF COHU'S BOARD OF DIRECTORS:

Gene E. Leary (Chairman) Frank W. Davis Harry L. Casari Harold Harrigian

AUDIT AND RELATED FEES

AUDIT FEES. The aggregate fees billed by Ernst & Young LLP for professional
services for the audit of Cohu's annual consolidated financial statements for
2000 and the review of the consolidated financial statements included in Cohu's
Forms 10-Q for 2000 were $269,061.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
fees billed by Ernst & Young LLP to Cohu for financial information systems
design and implementation for 2000.

ALL OTHER FEES. The aggregate fees billed to Cohu for all other services
rendered by Ernst & Young LLP for 2000, including fees for statutorily required
audits in certain locations outside the U.S. where Cohu has operations,
accounting and tax consultations and audits of Cohu's employee benefit plans
were $86,727.

The Audit Committee has determined that the nonaudit services rendered by
Ernst & Young LLP, are compatible with maintaining Ernst & Young LLP's
independence.

7
10

COMPENSATION COMMITTEE REPORT

Notwithstanding any statement to the contrary in any of Cohu's previous or
future filings with the Securities and Exchange Commission, this Report and the
Stock Performance Graph on page 9 shall not be incorporated by reference into
any such filings.

The Compensation Committee (the "Committee") of the Board of Directors,
comprised of the non-employee directors, determines and administers Cohu's
executive compensation policies and programs.

COMPENSATION PHILOSOPHY. One of the Committee's primary objectives in
establishing compensation policies is to maintain competitive programs to
attract, retain and motivate high caliber executives and maximize the long-term
success of Cohu by appropriately rewarding such individuals for their
achievements. Another objective is to provide an incentive to executives to
focus their efforts on long-term goals for Cohu by closely aligning their
financial interests with those of the stockholders. To attain these goals, the
Committee has designed Cohu's executive compensation program to include base
salary, annual cash bonus incentives and long-term incentives in the form of
stock options. The Committee believes that Cohu's executive compensation
programs, as summarized below, have met these objectives.

BASE SALARY. The Committee generally determines base salary levels for executive
level positions prior to the annual stockholders' meeting in May. The process
involved in the determination of executive base salaries for fiscal 2000 is
summarized below.

In April 2000, Cohu's Chief Executive Officer developed executive
compensation data from a nationally recognized survey for a group of similarly
sized high technology companies. Cohu's Chief Financial Officer's position as
well as the principal executives of each division and subsidiary were matched to
comparable survey positions and competitive market compensation levels were
determined for base salary. This data was provided to the Committee, along with
performance evaluations and salary recommendations

In May 2000, the Chief Executive Officer reviewed the competitive market
data with the Committee for each executive level position and the responsibility
level of each position, together with the individual's performance for the last
fiscal year and objectives for fiscal 2000. Cohu's performance was compared to
objectives for the last fiscal year and performance targets for fiscal 2000 were
also reviewed. The Committee reviewed the recommendations, performance
evaluations and survey data outlined above. After discussion, the Committee
approved a base salary level to be effective May 1, 2000, for each executive
level position other than the Chief Executive Officer.

The Committee reviewed the base salary of the Chief Executive Officer and
compared it to those in peer positions in companies of similar size and
performance. As a result of this review, the Committee determined that it was
appropriate to increase the Chief Executive Officer's base salary to a level
consistent with the base salaries of other chief executive officers of similarly
sized high technology companies. The group of companies used for salary
comparison purposes is not the same group of companies used to compare stock
performance included elsewhere herein.

ANNUAL INCENTIVES. Bonuses are designed to be a significant component of cash
compensation. Incentives for executive level positions are determined according
to Cohu's Incentive Bonus Plan (the "Incentive Plan"), based upon company
performance. In general, the Incentive Plan performance target objectives must
be achieved before any bonuses may be paid to participants.

In January 2001, the Committee reviewed and approved incentive awards for
2000 for all eligible participants in Cohu's Incentive Plan. The bonuses were
based upon Cohu's 2000 financial results compared to the targeted results and
followed the process and formula outlined in the Incentive Plan. In each case,
the incentive compensation is determined with reference to a pre-tax earnings
"target" fixed by the Committee, or in the case of divisions and subsidiaries,
by the corporate management.

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STOCK OPTIONS. The Committee grants stock options to focus the executive on the
long-term performance of Cohu and on maximizing stockholder value. The grant of
stock options is tied to individual executive performance. The Committee grants
such stock options after a review of various factors, including the executive's
current equity ownership in Cohu, potential future contributions to Cohu and job
responsibilities. The Committee members weigh these subjective factors
individually and arrive at final determinations for option grants through
consensus. Stock options are granted with an exercise price equal to the current
fair market value of Cohu's stock and utilize vesting periods to encourage
retention of executive officers. The Committee believes stock options serve to
align the interests of executive officers with those of other stockholders.

SUBMITTED BY THE COMPENSATION COMMITTEE OF COHU'S BOARD OF DIRECTORS:

Frank W. Davis (Chairman) Harry L. Casari Harold Harrigian Gene E. Leary

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2000, Messrs. Davis, Casari, Harrigian and Leary served as members of
the Compensation Committee. None of the Compensation Committee members or Named
Executive Officers have any relationships which must be disclosed under this
caption.

COMPARATIVE STOCK PERFORMANCE GRAPH

The graph below compares the cumulative total stockholder return on the
Common Stock of Cohu for the last five fiscal years with the cumulative total
return on the Nasdaq Market Index and a Peer Group Index over the same period
(assuming the investment of $100 in Cohu's Common Stock, Peer Group Index and
Nasdaq Market Index on December 31, 1995 and reinvestment of all dividends). The
Peer Group Index set forth on the Performance Graph is the index for Media
General Financial Services, Inc. Industry Group 834, "Semiconductor
Equipment/Material". Industry Group 834 is comprised of approximately 50
publicly-held semiconductor equipment companies. Historical stock price
performance is not necessarily indicative of future stock price performance.

(GRAPH)

---------------------------------------------------------
1996 1997 1998 1999 2000
---------------------------------------------------------

Cohu 92 122 89 253 115
---------------------------------------------------------
Peer Group 93 118 133 365 224
---------------------------------------------------------
Nasdaq 124 152 214 378 238
---------------------------------------------------------

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PROPOSAL NO. 2

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, would increase the shares of
stock available for issuance under the Purchase Plan by 400,000 to 1,000,000.
The increase was deemed necessary as a total of 247,727 shares of Cohu Common
Stock have been issued under the Purchase Plan through March 19, 2001, leaving
352,273 shares available for future issuances. The Purchase Plan is otherwise
unchanged since Cohu stockholders approved the Purchase Plan at the Cohu 1997
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. The following is a summary of the principal features of the
Purchase Plan and does not purport to be a complete description of all
provisions of the Purchase Plan. Any discrepancy between the language of the
Purchase Plan and the summary provided herein shall be resolved in favor of the
Purchase Plan language.

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 Section 423(b) of the Internal
Revenue Code of 1986 (the "Code"). As of March 19, 2001, approximately 1,000
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.

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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 Stock 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. 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

If approved by Cohu's stockholders, a maximum of 1,000,000 shares of Cohu's
Common Stock may be issued under the Purchase Plan. 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.

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AMENDMENT AND TERMINATION

The Purchase Plan will terminate upon the earliest to occur of (i) February
28, 2007, (ii) the date on which all available shares are 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.

CERTAIN 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.

BOARD RECOMMENDS APPROVAL

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
AMENDMENT TO THE COHU 1997 EMPLOYEE STOCK PURCHASE PLAN. THE AFFIRMATIVE VOTE OF
A MAJORITY OF SHARES PRESENT, IN PERSON OR BY PROXY, AT THE MEETING (PROVIDED A
QUORUM IS PRESENT) IS REQUIRED TO APPROVE THE AMENDMENT TO THE COHU 1997
EMPLOYEE STOCK PURCHASE PLAN.

PROPOSAL NO. 3

AMENDMENTS TO THE COHU, INC. 1996 OUTSIDE DIRECTORS STOCK OPTION PLAN

The Board of Directors is requesting stockholder approval of amendments to
Cohu's 1996 Outside Directors Stock Option Plan (the "1996 Plan").

The Cohu Board of Directors has approved and recommended for adoption
certain amendments to the 1996 Plan. The amendments, if approved by Cohu's
stockholders, would (i) increase the shares of stock authorized for issuance
under the 1996 Plan by 100,000 shares to 300,000, (ii) provide for an automatic
annual grant of 5,000 options, (iii) fix the 1996 Plan initial stock option
grant upon the directors' appointment to the Board at 10,000 shares with no
adjustment for future changes in the capital structure of Cohu and (iv) further
limit the recipients to those directors who had not previously been management
employees of Cohu. The 1996

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Plan is otherwise unchanged since Cohu stockholders approved the 1996 Plan at
the Cohu 1997 Annual Meeting of Stockholders. The 1996 Plan provides for the
grant of stock options to directors who are not employees of Cohu ("Outside
Directors").

As of March 19, 2001 options to purchase 80,000 shares of stock have been
issued under the 1996 Plan leaving 120,000 stock options available for future
issuance. The 1996 Plan currently provides for an automatic grant of an option
to purchase 10,000 shares (20,000 shares adjusted for 1999 stock split) of Cohu
Common Stock upon an Outside Director's appointment to the Board of Directors.
The Board of Directors believe that amending the 1996 Plan to provide for annual
option grants to purchase 5,000 shares of Cohu Common Stock and fixing the
initial option grant at 10,000 shares would ultimately increase the proprietary
interest in Cohu of the Outside Directors and align their interests more closely
with those of Cohu stockholders. In addition, providing for annual grants is
consistent with the outside director stock option plans of numerous high
technology companies and will improve Cohu's ability to attract the services of
experienced and highly qualified Outside Directors. The following is a summary
of the principal features of the 1996 Plan and does not purport to be a complete
description of all provisions of the 1996 Plan. Any discrepancy between the
language of the 1996 Plan and the summary provided herein shall be resolved in
favor of the 1996 Plan language.

ADMINISTRATION

The 1996 Plan is administered by the Cohu Board of Directors or by a duly
appointed committee of the Board having such powers specified by the Board. The
Board has final power to construe and interpret the 1996 Plan. However, the
Board has no authority, discretion, or power to select the Outside Directors who
receive options under the 1996 Plan, to set the exercise price of the options
granted under the 1996 Plan, to determine the number of shares of common stock
to be granted under the option or to alter any other terms of the 1996 Plan,
except in the sense of administering the 1996 Plan subject to the provisions
thereof.

ELIGIBILITY AND TYPE OF OPTION

Stock Options under the 1996 Plan may be granted only to Outside Directors
of the Company. All options granted to Outside Directors under the 1996 Plan are
nonstatutory stock options not intended to qualify under section 422(b) of the
Code. If Proposal No. 3 is approved, the definition of Outside Director will be
revised to exclude persons who were formerly management employees of Cohu.

TERM, AMENDMENT AND TERMINATION

The Board may suspend or terminate the 1996 Plan at any time. Unless sooner
terminated by the Board, the term of the 1996 Plan shall be for ten years from
the 1996 Plan's November 13, 1996 commencement date. Termination of the 1996
Plan shall not affect any rights previously granted thereunder. The Committee
may terminate, modify or amend the 1996 Plan from time to time, provided that
the approval of the stockholders of Cohu would be required with respect to any
amendment which would (i) increase the number of shares of Common Stock reserved
for issuance upon exercise of options pursuant to the 1996 Plan; (ii) modify the
requirements relating to eligibility for participation in the 1996 Plan; or
(iii) change any provision of the 1996 Plan in a manner that would increase the
benefits accruing to participants thereunder.

SHARES RESERVED FOR ISSUANCE; CAPITAL CHANGES

A maximum of 200,000 shares (300,000 shares if Proposal No. 3 is approved)
of the $1.00 par value Common Stock of Cohu may be issued under the 1996 Plan,
subject to adjustment in the event of stock dividends, splits, subdivisions or
combinations. Appropriate adjustments shall be made in the number of shares
subject to the 1996 Plan, the number of shares to be granted under the 1996 Plan
and to any outstanding options and in the exercise price of such options in the
event of a stock dividend, stock split, recapitalization or like change in the
capital structure of the Company.

TERMS OF OPTIONS

Set forth below is a description of the terms of options granted or to be
granted pursuant to the 1996 Plan.

a. AUTOMATIC GRANT OF OPTIONS. Each person who was an Outside Director as of
the date the 1996 Plan

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was adopted by the Board of Directors or who is newly elected or appointed as an
Outside Director after such date shall be granted an option to purchase 10,000
shares (20,000 shares adjusted for 1999 stock split) of Common Stock of Cohu
(the "Initial Grant"). If Proposal No. 3 is approved, on the first anniversary
of an Outside Director's Initial Grant and on each successive anniversary, each
Outside Director will be granted an option to purchase 5,000 shares of Common
Stock of Cohu, provided the individual continues to serve as an Outside Director
and the Initial Grant will be fixed at 10,000 shares. Outside Directors who
received their Initial Grant more than one year prior to May 15, 2001 and have
satisfied the one-year anniversary requirement, will be granted options to
purchase 5,000 shares of Cohu common Stock effective May 15, 2001 if Proposal
No. 3 is approved. Accordingly, Messrs. Casari, Davis, Harrigian and Leary will
be granted options to purchase 5,000 shares of Cohu Common Stock (for a total of
20,000 shares) if Proposal No. 3 is approved. The market value of 20,000 shares
of Cohu Common Stock on March 19, 2001, based on the $16.56 closing price as
reported on the Nasdaq Stock Market, was approximately $331,000. The other
current members of Cohu's Board of Directors are, or were previously, management
employees of Cohu and would not be eligible for grants under the 1996 Plan if
Proposal No. 3 is approved.

b. OPTION EXERCISE PRICE. The purchase price per share deliverable upon the
exercise of a stock option under the 1996 Plan shall be the fair market value of
a share on the date of grant.

c. EXERCISE PERIOD AND EXERCISABILITY OF OPTIONS. An option granted pursuant
to the 1996 Plan shall be exercisable for a term of ten years. Each option shall
become exercisable in four equal installments commencing on the first
anniversary date of grant. One-quarter of the total number of shares covered by
the option shall be exercisable on the first anniversary and an additional
one-quarter shall be exercisable on each anniversary thereafter until on the
fourth anniversary all the shares subject to the option shall be fully vested.

d. PAYMENT OF OPTION EXERCISE PRICE. Payment of the exercise price for the
number of shares of common stock purchased pursuant to any stock option shall be
made in cash or cash equivalent, by delivery to Cohu of shares of Cohu Common
Stock that have been owned by the option holder for more than six months and
which have an aggregate value equal to such exercise price, or by any
combination thereof.

e. TRANSFER OF CONTROL. In the event of a proposed "Transfer of Control", as
defined, any portion of an outstanding option that has not yet become
exercisable shall automatically become exercisable for a period of 30 days prior
to the proposed effective date of the Transfer of Control.

f. NONASSIGNABILITY. No option may be assigned or transferred by an optionee
other than by will or by the laws of descent and distribution. During the
lifetime of an optionee, an option may be exercised only by the optionee.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is only a summary of the United States federal income tax
consequences to option holders under the 1996 Plan and does not purport to be
complete. Interested parties and option holders 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.

The grant of a nonstatutory stock option will generally not result in
taxable income to the optionee at the time of grant, and ordinary income will be
realized by an optionee at the time of exercise of a nonstatutory option in the
amount by which the fair market value of the Common Stock purchased on the date
of exercise exceeds the exercise price. Cohu will be entitled to a deduction
from income for federal income tax purposes in an amount equal to the ordinary
income recognized by the optionee in such case. Any subsequent disposition of
the shares acquired pursuant to a nonstatutory option will result in gain or
loss to the optionee in an amount equal to the difference between the sale price
and the fair market value at the date of exercise. Such gain or loss will be
treated as long-term or short-term capital gain or loss, depending upon the
holding period.

BOARD RECOMMENDS APPROVAL

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
AMENDMENTS TO THE 1996 PLAN. THE AFFIRMATIVE VOTE OF A MAJORITY OF SHARES
PRESENT, IN PERSON OR BY PROXY, AT THE MEETING (PROVIDED A QUORUM IS PRESENT) IS
REQUIRED TO APPROVE THE AMENDMENTS TO THE 1996 PLAN.

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INDEPENDENT AUDITORS

Ernst & Young LLP has served as Cohu's independent auditors continuously
since 1957 and Cohu's Audit Committee has recommended and the Board of Directors
has selected this firm to serve as independent auditors for 2001.
Representatives of Ernst & Young LLP will be present at the Meeting and be
available to respond to appropriate questions and may make a statement if they
desire to do so.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that Cohu's
executive officers and directors and persons who own more than 10% of a
registered class of Cohu's equity securities, file an initial report of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission ("SEC"). Such officers, directors and 10% stockholders
are also required by SEC rules to furnish Cohu with copies of all Section 16(a)
forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for such persons, Cohu believes that during the year ended December 31,
2000 its executive officers, directors and 10% stockholders complied with all
Section 16(a) filing requirements applicable to them.

OTHER MATTERS

The Board of Directors is unaware of any other business to be presented for
consideration at the Meeting. If, however, such other business should properly
come before the Meeting, the proxies will be voted in accordance with the best
judgment of the proxy holders. The shares represented by proxies received in
time for the Meeting will be voted and if any choice has been specified the vote
will be in accordance with such specification.

STOCKHOLDER PROPOSALS - 2002 ANNUAL MEETING

Stockholders are entitled to present proposals for action at a forthcoming
stockholders' meeting if they comply with the requirements of the proxy rules
and Cohu's Bylaws. Any proposals intended to be presented at the 2002 Annual
Meeting of Stockholders of Cohu must be received at Cohu's offices on or before
December 6, 2001 in order to be considered for inclusion in Cohu's proxy
statement and form of proxy relating to such meeting.

If a stockholder intends to submit a proposal at the 2002 Annual Meeting of
Stockholders of Cohu, which proposal is not intended to be included in Cohu's
proxy statement and form of proxy relating to such meeting, the stockholder
should provide Cohu with appropriate notice no later than December 6, 2001. If
Cohu fails to receive notice of the proposal by such date, any such proposal
will be considered untimely and Cohu will not be required to provide any
information about the nature of the proposal in its proxy statement and the
proposal will not be submitted to the stockholders for approval at the 2002
Annual Meeting of Stockholders of Cohu.

By Order of the Board of Directors

/s/ John H. Allen
--------------------------------------
John H. Allen
Secretary

San Diego, California
April 5, 2001

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APPENDIX A - AUDIT COMMITTEE CHARTER

CHARTER OF THE AUDIT COMMITTEE OF
THE BOARD OF DIRECTORS OF COHU, INC.

ORGANIZATION

This charter governs the operations of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
Cohu, Inc. (the "Company") board of directors. The committee shall be appointed
by the board of directors and shall comprise at least three directors, each of
whom are independent of management and the Company. Members of the committee
shall be considered independent if they have no relationship that may interfere
with the exercise of their independence from management and the Company. All
committee members shall be financially literate, (or shall become financially
literate within a reasonable period of time after appointment to the committee,)
and at least one member shall have accounting or related financial management
expertise.

STATEMENT OF POLICY

The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the board of
directors. In so doing, it is the responsibility of the committee to maintain
free and open communication between the committee, independent auditors, and
management of the Company. In discharging its oversight role, the committee is
empowered to investigate any matter brought to its attention with full access to
all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.

RESPONSIBILITIES AND PROCESSES

The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board of directors and report the
results of their activities to the board. Management is responsible for
preparing the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements. The committee in carrying
out its responsibilities believes its policies and procedures should remain
flexible, in order to best react to changing conditions and circumstances. The
committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.

The following shall be the principal recurring processes of the audit committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the committee may supplement them as
appropriate.

- - The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives of the
Company's shareholders. The committee shall have the ultimate authority and
responsibility to evaluate and, where appropriate, replace the independent
auditors. The committee shall discuss with the auditors their independence
from management and the Company and the matters included in the written
disclosures required by the Independence Standards Board. Annually, the
committee shall review and recommend to the board the selection of the
Company's independent auditors.

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- - The committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits including
the adequacy of staffing and compensation. Also, the committee shall discuss
with management, and the independent auditors the adequacy and effectiveness
of the accounting and financial controls, including the Company's system to
monitor and manage business risk, and legal and ethical compliance programs.
Further, the committee shall meet separately with the independent auditors,
with and without management present, to discuss the results of their
examinations.

- - The committee shall review the interim financial statements with management
and the independent auditors prior to the filing of the Company's Quarterly
Report on Form 10-Q. Also, the committee shall discuss the results of the
quarterly review and any other matters required to be communicated to the
committee by the independent auditors under generally accepted auditing
standards. The chair of the committee may represent the entire committee for
the purpose of this review.

- - The committee shall review with management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form
10-K (or the annual report to shareholders if distributed prior to the
filing of Form 10-K), including their judgment about the quality, not just
acceptability, of accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statements.
Also, the committee shall discuss the results of the annual audit and any
other matters required to be communicated to the committee by the
independent auditors under generally accepted auditing standards.

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PROXY

COHU, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COHU,INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15,2001

The undersigned hereby (i) acknowledge(s) receipt of the Notice and Proxy
Statement dated April 5, 2001 relating to the Annual Meeting of Stockholders of
Cohu, Inc. ("Cohu") to be held May 15, 2001 and (ii) appoint(s) CHARLES
A.SCHWAN, JAMES A.DONAHUE and JOHN H.ALLEN as proxies, with full power of
substitution, and authorizes them, or any of them, to vote all the shares of
Common Stock of Cohu standing in the name of the undersigned at said meeting or
any adjournment thereof upon the matters specified below and upon such other
matters as may be properly brought before the meeting, or any adjournment
thereof, conferring discretionary authority upon such proxies as to such other
matters.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 and 3.

(PLEASE SIGN AND DATE ON THE REVERSE SIDE)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

Please mark
your votes as
indicated in [X]
this example.

FOR WITHHOLD
all nominees listed below AUTHORITY
(except as marked to to vote for all
the contrary below) nominees listed
[ ] [ ]

1. ELECTION OF DIRECTORS 2. TO APPROVE AN AMENDMENT TO THE COHU 1997
JAMES W. BARNES EMPLOYEE STOCK PURCHASE PLAN INCREASING THE
JAMES A. DONAHUE SHARES OF STOCK SUBJECT TO THE PLAN BY 400,000

FOR [ ] AGAINST [ ] ABSTAIN [ ]

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL 3. TO APPROVE AMENDMENTS TO THE COHU 1996 OUTSIDE
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.) DIRECTORS STOCK OPTION PLAN INCREASING THE
SHARES OF STOCK SUBJECT TO THE PLAN BY 100,000 AND
________________________________________________ PROVIDING FOR AUTOMATIC ANNUAL OPTION GRANTS

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING

STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE IN
PERSON EVEN THOUGH THEY HAVE PREVIOUSLY MAILED
THIS PROXY

PLEASE DATE, SIGN AND MAIL THIS PROXY CARD IN
THE ENVELOPE. NO POSTAGE IS REQUIRED FOR
MAILING IN THE U.S.A.

Signature(s)________________________________________________ Dated:_______, 2001
IMPORTANT: Please date this Proxy and sign exactly as your name(s) appears
hereon. When signing as a fiduciary, please give your full title. If shares are
held by joint tenants, both should sign.

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FOLD AND DETACH HERE