Zygo’s Board Unanimously Rejects Unsolicited Proposal From II-VI

Zygo Corporation ("ZYGO") (NASDAQ: ZIGO) announced today that the company’s Board of Directors has unanimously rejected the January 5, 2010 proposal from II-VI Incorporated (“II-VI”) for the acquisition of all the outstanding common shares of ZYGO for $10.00 per share. In rejecting the proposal, the Board said that ZYGO is not for sale and that it is in the best interests of its shareholders to allow ZYGO’s newly-named CEO, industry veteran Dr. Chris L. Koliopoulos, to pursue a standalone strategy to increase shareholder value. Dr. Koliopoulos, a recognized leader in the optics industry with an exceptional track record of delivering growth and increasing value at advanced optical instruments companies, was named President and CEO on January 19, 2010 and Chairman on February 12.

Said Dr. Koliopoulos, “The Board strongly believes ZYGO’s shareholders will be best served by keeping the company independent and pursuing its long-term strategy. ZYGO is a great company with industry-leading products and technologies, strong positions in its core optical and metrology markets, and significant growth opportunities. The Board and management team are moving forward quickly to leverage these strengths.”

In rejecting the II-VI proposal, the Board noted that the company has only just begun to realize the benefits of recent initiatives to refocus on its core optical and metrology markets and to reduce costs. Furthermore, ZYGO believes that it will benefit from continued economic recovery in the industries it serves. In the second quarter of fiscal 2010, which ended on December 31, 2009, ZYGO’s revenues increased 22% compared with revenues in the first quarter of fiscal 2010. In addition, total customer bookings increased 26% from the first quarter of fiscal 2010. This was the second sequential increase in bookings, reflecting momentum in the market recovery. ZYGO also reported significant improvement in gross profit margin as compared with the first quarter in fiscal 2010 and the comparable quarter of fiscal 2009.

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