Milpitas, CA and Minneapolis, MN 1/21/04—Nanometrics and August Technology have entered into a merger agreement to form August Nanometrics, which will have pro forma 2004 revenues of $140 million. “We join two strong product lines with little overlap, and bring to market a better fab-wide solution with advanced macro inspection, critical dimension (CD) and film thickness metrology aimed at the most challenging wafer processing areas such as lithography,” said Nanometrics CEO John Heaton. Nanometrics will reincorporate in Delaware and each share of its common stock will be exchanged for one share of Nanometrics Delaware. Each share of August Technology common stock will be exchanged for 0.6401 of a share of Nanometrics Delaware. Mr. Heaton will serve as CEO of the new company and the board of directors will consist of three directors from Nanometrics board and three from August as well as an additional member.