##### Table of Contents





UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.
    20549
     FORM 10-K
      (MARK ONE)x  ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For the Fiscal
    Year Ended December 31, 2009ORo  TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For
    the transition period
    from          to   Commission File
    No. 000-27965
      RUDOLPH TECHNOLOGIES,
    INC.
 (Exact name of registrant as
    specified in its charter)
      Delaware

22-3531208(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)  One Rudolph Road, P.O. Box 1000, Flanders, NJ
    07836
 (Address of principal executive
    offices) (Zip Code)
  Registrants telephone number, including area code:
    (973) 691-1300
      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT:
   Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, $0.001 par value per share

The NASDAQ Stock Market LLC (NASDAQ Global Select Market)   SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT:
 None
       o x
  o x
  x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer x
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o x
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K:




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##### 





TABLE OF
    CONTENTS
   
 Item No.



PagePART I1.


Business

11A.


Risk Factors

101B.


Unresolved Staff Comments

202.


Properties

213.


Legal Proceedings

214.


(Removed and Reserved)

21PART II5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

226.


Selected Financial Data

247.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations

257A.


Quantitative and Qualitative Disclosures About
    Market Risk

368.


Financial Statements and Supplementary Data

369.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

369A.


Controls and Procedures

369B.


Other Information

37PART III10.


Directors, Executive Officers and Corporate
    Governance

3811.


Executive Compensation

3812.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters

3813.


Certain Relationships and Related Transactions,
    and Director Independence

3814.


Principal Accounting Fees and Services

38PART IV15.


Exhibits and Financial Statement Schedule

39SignaturesCertificationsEX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2




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FORWARD
    LOOKING STATEMENTS
  Certain statements in this Annual Report on
    Form 10-K
    are forward-looking statements, including those concerning our
    expectations of future revenues, gross profits, research and
    development and engineering expenses, selling, general and
    administrative expenses, product introductions, technology
    development, manufacturing practices, cash requirements and
    anticipated trends and developments in and management plans for,
    our business and the markets in which we operate. The statements
    contained in this Annual Report on
    Form 10-K
    that are not purely historical are forward-looking statements
    within the meaning of Section 27A of the Securities Act of
    1933 and Section 21E of the Securities Exchange Act of 1934
    and within the meaning of the Private Securities Litigation
    Reform Act of 1995. Forward-looking statements may be identified
    by the words such as, but not limited to,
    anticipate, believe, expect,
    intend, plan, should,
    may, could, will and words
    or phrases of similar meaning, as they relate to our management
    or us.
  The forward-looking statements contained herein reflect our
    current expectations with respect to future events and are
    subject to certain risks, uncertainties and assumptions. The
    forward-looking statements reflect our position as of the date
    of this report and we undertake no obligation to update any
    forward-looking statements, whether as a result of new
    information, future events or otherwise, except as required by
    law. Actual results may differ materially from those projected
    in such forward-looking statements for a number of reasons
    including, but not limited to, the following: variations in the
    level of orders which can be affected by general economic
    conditions and growth rates in the semiconductor manufacturing
    industry and in the markets served by our customers, the
    international economic and political climates, difficulties or
    delays in product functionality or performance, the delivery
    performance of sole source vendors, the timing of future product
    releases, failure to respond adequately to either changes in
    technology or customer preferences, changes in pricing by us or
    our competitors, ability to manage growth, risk of nonpayment of
    accounts receivable, changes in budgeted costs and the
    Risk Factors set forth in Item 1A. Our
    stockholders should carefully review the cautionary statements
    contained in this Annual Report on
    Form 10-K.
    You should also review any additional disclosures and cautionary
    statements we make from time to time in our quarterly reports on
    Form 10-Q,
    current reports on
    Form 8-K
    and other filings we make with the Securities and Exchange
    Commission.
 PART I  Item 1.
    Business.  General
      Inspection Systems. tm ® tool-to-tool ®
 1




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Metrology Systems.
  tm
  Data Analysis & Review Systems. run-to-run
  Technology
    Automated Defect Detection and
    Classification.
 2




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All-surface Inspection.
    Classification.
  Yield Analysis.
  Probe Card Test and Analysis. ® 3-D
  Optical Acoustics.
  tm
  Ellipsometry.
 3




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Reflectometry.
  Process Control.
  Products
    4




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##### Table of Contents



Type of FabWafer


FinalProduct


Introduced




Functionality


Processing


ManufacturingInspection & Test Systems-

Advanced detection of defects >0.5 micronAXitm

Module


2003


-

Inspection of patterned and unpatterned wafers-

In line, high-speed, 100% inspection-

Full color review and waferless recipe creation


X-

2D defect detection of the wafers edgeE30tm

Module


2003


-

Metrology of edge feature-

Incorporated into the Explorer Cluster


X


X-

2D defect detection of the wafers backsideB30tm

Module


2003


-

Darkfield, brightfield and color imaging-

Incorporated into the Explorer Cluster


X


XExplorer®

    Inspection







A family of multi surface inspection tools, using one or more
    inspection modulesCluster


2009


-

Automated handling platform-

Intelligent wafer scheduling


X-

Fully automated defect detection >0.5 micronNSX®

    Series


1997


-

2D wafer, die & bump inspection-

In line, high-speed, 100% inspection





XWafer
Scannertm





-

2D/3D bump dimensional inspectionSeries


1999


-

2D bump/surface defect inspection-

In line, high-speed, 100% inspection





X-

Probe card test & analysisPrecisionWoRx®


2008


-

Configurable channels-

High load forces





X-

Probe card production metrologyProbeWoRx®


2003


-

3D Optical Comparative Metrology-

High-speed test times-

Automated, one-touch measurements





X-

Probing process analysisWaferWoRx®


2006


-

3D probe tip analysis-

Proprietary, advanced software





X-

Probe card analyzerPrecisionPoint®


2002


-

Tests devices simultaneously-

Upgradable





X   5




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##### Table of Contents



Type of FabWafer


FinalProduct


Introduced


Functionality


Processing


ManufacturingMetrology Systems-

Non-contact system for thin opaque films-

Patented Picosecond Ultrasonic Laser Sonar Technology
(PULSEtm)MetaPULSE®

    Series


1997


-

Designed for advanced copper and non-copper applications-

Improved throughput and repeatability


X-

Superior accuracy for transparent film measurements-

Incorporates ellipsometry technology for transparent film
    applicationS3000tm

Series


2006


-

Optimized price/performance for fabwide applications-

Available with pattern recognition software-

Enhanced data review mode


X   6




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Type of FabWafer


FinalProduct


Introduced





Functionality


Processing


ManufacturingProcess Control
    Software-

Real-time monitoring softwareARTIST®



2003



-

Enables development of human-readable models-

Frees users from manual monitoring-

Minimize scrap and rework


XAutoShell®



1998



-

Equipment automation software that interfaces to both tools and
    external resources


X-

Designed to control process equipmentControlWORKS®



1994



-

Minimizes the expense and time-to-market associated with
    developing control applications


XDiscover®



2007



-

Fabwide software for archival and retrieval of process related
    data-

Facilitates root cause analysis, yield enhancement and yield
    learning


X-

In line, all surface defect analysis and data managementDiscover®



2005



-

Trend analysis and visualization toolsEnterprise







-

Wafer maps visualize all-surface defects-

Identifies root cause of defects and process excursions


X


X-

Helps photovoltaic (PV) cell manufacturers reduce manufacturing
    costs and increase average cell efficienciesDiscover
Solartm



2008



-

Designed for high volume c-Si cell and thin film production-

Controls and optimizes the performance of the line


X


X-

Connects applications to toolsGamma2tm



2004



-

Add applications to factory control architecture without
    changing host software


X-

Intercepts message traffic between the equipment and the hostGateWaytm



2003



-

Preserves value of existing automation investments-

Increases reliability and function with zero development time-

Diagnostic tool for solving communication problems


X-

Off line defect review and classificationHarmonyASRtm



2005



-

Defects displayed in real time-

Rapid classification of unknown defects; review of
    previously-classified defects


X


X-

Fabwide spatial process control system-

Traces patterns back to yield-killing process issuesProcess
Sentineltm



2006



-

Combined defect and sort solution-

Quickly isolates systemic faults-

Advanced segmentation and wafer stacking capability


XProcessWORKS®



1998



-

Advanced process control software deployed in CMOS, high-mix
    ASIC, memory and disk head fabs-

Proven in all major process areas


X-

Reduces impact on tool time-

Stores recipes in a central repositoryRecipeWORKStm



1998



-

Enables engineers to manage recipes remotely-

Allows users to setup security-

Accepts settings from any run-to-run control application


X-

Configures and schedules preventive maintenanceTrackWORKS®



1998



-

View factory entities using operator-defined parameters


X-

Automatic defect classificationTrueADCtm



2005



-

High accuracy, consistency and scalability-

Patented feature-based defect matching technology-

Utilizes dynamic defect library method


X


X-

Serving the entire fabTrueADCtm







-

Defect classification with a high level of accuracyEnterprise



2007



-

Ensures database lookup, classification and timely response to
    the tool-

Minimum impact to throughput


X


X-

Builds predictive modelsYield
Optimizertm



2006



-

Optimizes yield and reduces excursions-

Identifies the most critical metrology measurements for
    controlling yield


X


X  7




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Customers
  Form 10-K
    Research
    and Development
    Meta
    Sales,
    Customer Service and Application Support
      Manufacturing
   8




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Intellectual
    Property
    Meta
      Competition
   9




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##### Table of Contents



Backlog
    Employees
    Available
    Information
  http://www.rudolphtech.com. Form 10-K, Form 10-Q Form 8-K http://www.sec.gov.
  http://www.rudolphtech.com.
  Item 1A.
    Risk
    Factors.  Risks
    Related to Rudolph
  Our
    operating results have varied and will likely continue to vary
    significantly from quarter to quarter in the future, causing
    volatility in our stock price
    
    changes in customer demand for our systems, which is influenced
    by economic conditions in the semiconductor device industry,
    demand for products that use semiconductors, market acceptance
    of our systems and products of our customers and changes in our
    product offerings;
    seasonal variations in customer demand, including the tendency
    of European sales to slow significantly in the third quarter of
    each year;
    the timing, cancellation or delay of customer orders, shipments
    and acceptance; 10




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
    product development costs, including increased research,
    development, engineering and marketing expenses associated with
    our introduction of new products and product
    enhancements; and
    the levels of our fixed expenses, including research and
    development costs associated with product development, relative
    to our revenue levels.    Our
    largest customers account for a significant portion of our
    revenues, and our revenues and cash flows would significantly
    decline if one or more of these customers were to purchase
    significantly fewer of our systems or they delayed or cancelled
    a large order
    Our
    customers may be unable to pay us for our products and
    services
    Our
    revenue may vary significantly each quarter due to relatively
    small fluctuations in our unit sales
    Variations
    in the amount of time it takes for us to sell our systems may
    cause fluctuations in our operating results, which could cause
    our stock price to decline
  and/or
 11




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
    the efforts of our sales force;
    the complexity of the customers fabrication processes;
    the internal technical capabilities and sophistication of the
    customer;
    the customers budgetary constraints; and
    the quality and sophistication of the customers current
    metrology
    and/or
    inspection equipment.    Most of
    our revenues have been derived from customers outside of the
    United States subjecting us to operational, financial and
    political risks, such as unexpected changes in regulatory
    requirements, tariffs, political and economic instability,
    outbreaks of hostilities, and difficulties in managing foreign
    sales representatives and foreign branch operations
    Compliance with foreign laws.
  Unexpected changes in regulatory requirements including
    tariffs and other market barriers.
  Political and economic instability.
 12




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Difficulties in staffing and managing foreign branch
    operations.
  Currency fluctuations as compared to the
    U.S. Dollar.
  If we
    deliver systems with defects, our credibility will be harmed and
    the sales and market acceptance of our systems will
    decrease
    If we are
    not successful in developing new and enhanced products for the
    semiconductor device manufacturing industry we will lose market
    share to our competitors
  first-to-market
 13




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If new
    products developed by us do not gain general market acceptance,
    we will be unable to generate revenues and recover our research
    and development costs
    start-up
  Even if
    we are able to develop new products that gain market acceptance,
    sales of these new products could impair our ability to sell
    existing products
    If our
    relationships with our large customers deteriorate, our product
    development activities could be adversely affected
    Our
    ability to reduce costs is limited by our ongoing need to invest
    in research and development and to provide customer support
    activities
    We may
    fail to adequately protect our intellectual property and,
    therefore, lose our competitive advantage
   14




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Protection
    of our intellectual property rights, or the efforts of third
    parties to enforce their own intellectual property rights
    against us, may result in costly and time-consuming litigation,
    substantial damages, lost product sales and/or the loss of
    important intellectual property rights
      Our
    efforts to protect our intellectual property may be less
    effective in certain foreign countries, where intellectual
    property rights are not as well protected as in the United
    States
   15




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Some of
    our current and potential competitors have significantly greater
    resources than we do, and increased competition could impair
    sales of our products or cause us to reduce our prices
      Because
    of the high cost of switching equipment vendors in our markets,
    it is sometimes difficult for us to win customers from our
    competitors even if our systems are superior to theirs
    We must
    attract and retain key personnel with knowledge of semiconductor
    device manufacturing and inspection and/or metrology equipment
    to help support our future growth, and competition for such
    personnel in our industry is high
   16




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We obtain
    some of the components and subassemblies included in our systems
    from a limited group of suppliers, and the partial or complete
    loss of one of these suppliers could cause production delays and
    a substantial loss of revenues
    Any
    prolonged disruption in the operations of our manufacturing
    facilities could have a material adverse effect on our
    revenues
    Failure
    to adjust our orders for parts and subcomponents in an accurate
    and timely manner in response to changing market conditions or
    customer acceptance of our products could adversely affect our
    financial position and results of operations
    Our
    ability to fulfill our backlog may have an effect on our long
    term ability to procure contracts and fulfill current
    contracts
    We may
    choose to acquire new and complementary businesses, products or
    technologies instead of developing them ourselves, and may be
    unable to complete these acquisitions or may not be able to
    successfully integrate an acquired business in a cost-effective
    and non-disruptive manner
   17




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and/or and/or
  
    diversion of managements attention from
    day-to-day
    operational matters and current products and customers;
    lack of synergy, or the inability to realize expected synergies;
    failure to commercialize the new technology or business;
    failure to meet the expected performance of the new technology
    or business;
    failure to retain key employees and customer or supplier
    relationships;
    lower-than-expected market opportunities or market acceptance of
    any new products; and
    unexpected reduction of sales of existing products by new
    products.  and/or
  If we
    cannot effectively manage our growth, our business may
    suffer
    
    engage, train and manage a larger sales force and additional
    service personnel;
    expand the geographic coverage of our sales force;
    expand our information systems;
    identify and successfully integrate acquired businesses into our
    operations; and
    administer appropriate financial and administrative control
    procedures.    Changes
    in tax rates or tax liabilities could affect results
   18




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Turmoil
    in the credit markets and the financial services industry may
    negatively impact our business, results of operations, financial
    condition or liquidity
    Risks
    Related to the Semiconductor Device Industry
  Cyclicality
    in the semiconductor device industry has led to substantial
    decreases in demand for our systems and may from time to time
    continue to do so
  up-and-down
  Our
    future rate of growth is highly dependent on the development and
    growth of the market for microelectronic device inspection and
    metrology equipment
    Risks
    Related to our Stock
  Provisions
    of our charter documents and Delaware law, as well as our
    stockholder rights plan, could discourage potential acquisition
    proposals and/or delay, deter or prevent a change in control of
    our company
    
    a prohibition on stockholder actions through written consent; 19




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
    a requirement that special meetings of stockholders be called
    only by our chief executive officer or Board of Directors;
    advance notice requirements for stockholder proposals and
    director nominations by stockholders;
    limitations on the ability of stockholders to amend, alter or
    repeal our by-laws;
    the authority of our board to issue, without stockholder
    approval, preferred stock with such terms as the board may
    determine; and
    the authority of our board, without stockholder approval, to
    adopt a Stockholder Rights Plan. Such a Shareholder Rights Plan
    was adopted by the Board of Directors on June 27, 2005.    Our stock
    price is volatile
    
    variations in operating results from quarter to quarter;
    changes in earnings estimates by analysts or our failure to meet
    analysts expectations;
    changes in the market price per share of our public company
    customers;
    market conditions in the semiconductor and other industries into
    which we sell products;
    general economic conditions;
    political changes, hostilities or natural disasters such as
    hurricanes and floods;
    low trading volume of our common stock; and
    the number of firms making a market in our common stock.    Item 1B.
    Unresolved
    Staff Comments.   20




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Item 2.
    Properties.    LeaseApproximate


ExpirationSquare


Year, UnlessLocation

Facility Purpose

Footage


OwnedFlanders, New Jersey

Executive Office


20,000



OwnedBudd Lake, New Jersey

Engineering, Manufacturing and Service


61,500



2016Bloomington, Minnesota

Engineering, Manufacturing and Service


78,500



2012Lowell, Massachusetts

Engineering and Service


9,500



2010Richardson, Texas

Engineering


21,000



OwnedBohemia, New York

Engineering


6,000



2011Snoqualmie, Washington

Engineering and Service


27,000



2018Hsin-Chu, Taiwan

Sales and Service


10,500



2010Takatsu, Japan

Sales and Service


5,000



2010Sungnam-si, Korea

Sales and Service


9,500



2011Shanghai, China

Sales and Service


3,500



2011Singapore

Sales and Service


2,000



2012Scotland, United Kingdom

Sales and Service


1,000



2010       Item 3.
    Legal
    Proceedings.    Item 4.
    (Removed
    and Reserved). 21




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PART
    II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.        COMPARISON OF 5
    YEAR CUMULATIVE TOTAL RETURN* Among
    Rudolph Technologies, Inc., The NASDAQ Composite Index
    And A Peer Group
  
  *
    
    $100 invested on 12/31/04 in stock
    or index, including reinvestment of dividends.
    Fiscal year ending December 31.  12/04


12/05


12/06


12/07


12/08


12/09Rudolph Technologies, Inc.


100.0



75.01



92.72



65.93



20.56



39.14NASDAQ Composite


100.0



101.41



114.05



123.94



73.43



105.89Peer Group


100.0



93.28



109.59



101.51



50.90



81.14  22




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##### Table of Contents



Price Range ofCommon StockHigh


LowYear Ended December 31, 2008First Quarter

$
11.45


$
8.11Second Quarter

$
10.99


$
7.70Third Quarter

$
11.02


$
7.22Fourth Quarter

$
8.44


$
2.03Year Ended December 31, 2009First Quarter

$
4.27


$
1.95Second Quarter

$
6.18


$
2.96Third Quarter

$
8.46


$
5.27Fourth Quarter

$
8.25


$
5.70       Form 10-K,
   23




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Item 6.
    Selected
    Financial Data.  Form 10-K, Form 10-K.
  Year Ended December 31,2005


2006(1)


2007(2)


2008(3)


2009(4)(In thousands, except per share data)Statement of Operations Data:Revenues

$
82,918


$
201,168


$
160,129


$
131,040


$
78,657Cost of revenues


44,390



103,726



78,889



87,388



49,805Gross profit


38,528



97,442



81,240



43,652



28,852Operating expenses:Research and development


11,901



29,856



29,993



31,644



25,991In-process research and development






9,900



1,000







Selling, general and administrative


20,373



32,393



33,204



33,965



33,640Impairment charge for goodwill and identifiable intangible assets














227,105



Amortization


876



4,048



4,487



5,890



1,358Total operating expenses


33,150



76,197



68,684



298,604



60,989Operating income (loss)


5,378



21,245



12,556



(254,952
)


(32,137
)Interest income and other, net


1,388



3,191



4,149



1,151



270Income (loss) before provision for income taxes


6,766



24,436



16,705



(253,801
)


(31,867
)Provision (benefit) for income taxes


1,789



11,730



4,846



(4,115
)


(2,239
)Net income (loss)

$
4,977


$
12,706


$
11,859


$
(249,686
)

$
(29,628
)Earnings (loss) per share:Basic

$
0.29


$
0.47


$
0.41


$
(8.16
)

$
(0.96
)Diluted

$
0.29


$
0.46


$
0.40


$
(8.16
)

$
(0.96
)Weighted average shares outstanding:Basic


16,899



27,276



29,168



30,614



30,888Diluted


16,942



27,574



29,312



30,614



30,888   December 31,2005


2006


2007


2008


2009Balance Sheet Data:Cash and cash equivalents

$
37,986


$
72,479


$
57,420


$
67,735


$
57,839Marketable securities


42,821



33,714



16,505



10,549



3,080Working capital


125,678



200,942



176,298



147,688



126,781Total assets


180,001



440,486



460,216



197,432



178,203Retained earnings (accumulated deficit)


20,191



32,897



44,776



(204,910
)


(234,538
)Total stockholders equity


164,534



392,876



424,478



176,088



151,131  24




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(1)
    
    Effective January 1, 2006, we adopted the provisions
    prescribed by the Financial Accounting Standards Board
    (FASB) in Accounting Standards Codification
    (ASC) 718. Consequently, we began recognizing
    compensation cost measured at fair value over the service period
    for stock awards expected to vest. In addition, Statement of
    Operations data reflects the results of operations of August
    Technology since February 15, 2006.(2)
    
    Statement of Operations data reflects the results of operations
    of PCTA since December 18, 2007.(3)
    
    Statement of Operations data reflects the results of operations
    of WSPG since January 22, 2008.(4)
    
    Statement of Operations data reflects the results of operations
    of PCG since August 3, 2009.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Overview
        year-over-year 50-60% book-to-bill book-to-bill 3-month book-to-bill book-to-bill book-to-bill
   25




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26




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2007


2008


2009Revenues


100.0
%


100.0
%


100.0
%Cost of revenues


49.3



66.7



63.3Gross profit


50.7



33.3



36.7Operating expenses:Research and development


18.7



24.2



33.0In-process research and development


0.6







Selling, general and administrative


20.8



25.9



42.8Impairment charge for goodwill and identifiable intangible assets






173.3



Amortization


2.8



4.5



1.7Total operating expenses


42.9



227.9



77.5Operating income (loss)


7.8



(194.6
)


(40.8
)Interest income and other, net


2.6



0.9



0.3Income before provision (benefit) income taxes


10.4



(193.7
)


(40.5
)Provision (benefit) for income taxes


3.0



(3.1
)


(2.8
)Net income (loss)


7.4
%


(190.6
)%


(37.7
)%   Results
    of Operations 2007, 2008 and 2009
  Revenues.
    Year Ended December 31,2007


2008


2009Systems:Inspection

$
86,196



53
%

$
73,465



56
%

$
38,027



48
%Metrology


34,738



22



21,118



16



8,921



11Parts


15,261



10



20,801



16



15,428



20Services


11,354



7



11,246



9



9,590



12Software licensing


12,580



8



4,410



3



6,691



9Total revenue

$
160,129



100
%

$
131,040



100
%

$
78,657



100
%    27




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##### Table of Contents



year-over-year year-over-year year-over-year year-over-year
    Gross Profit. step-up
  Operating
    Expenses
    
    Research and Development. The macro-defect
    inspection, thin film transparent, opaque process control, and
    probe card test analysis market is characterized by continuous
    technological development and product innovations. We believe
    that the rapid and ongoing development of new products and
    enhancements to existing products, including the transition to
    copper and low-k dielectrics, wafer level packaging, the
    continuous shrinkage in critical dimensions, and the evolution
    of ultra-thin gate process control, is critical to our success.
    Accordingly, we devote a significant portion of our technical,
    management and financial resources to research and development
    programs. Research and development expenditures consist
    primarily of salaries and related expenses of employees engaged
    in research, design and development activities. They also
    include consulting fees and the cost of related supplies. Our
    research and development expense was $30.0 million,
    $31.6 million and $26.0 million in 2007, 2008 and
    2009, respectively. The
    year-over-year
    dollar increase from 2007 to 2008 is primarily due to the
    addition of the engineering teams from the PCTA and WSPG
    acquisitions in 2008, partially offset by headcount reductions
    and lower project costs as part of our cost reduction efforts.
    The
    year-over-year
    dollar decrease from 2008 to 2009 primarily reflects reduced
    compensation cost and lower project costs as part of our
    continued cost reduction efforts, offset by an increase in
    litigation expenses and expenses related to the activities of
    the acquisition of PCG. We continue to maintain our commitment
    to investing in new product development and enhancement to
    existing products in order to position ourselves for future
    growth.
    In-Process Research and Development
    (IPRD). In 2007, the acquisition of the
    PCTA resulted in the write-off of $1.0 million. At the time
    of the acquisition, we determined that the IPRD had not reached
    technological feasibility and that it did not have an
    alternative future use. The IPRD technology project was a probe
    card test project related to the next generation of our
    ProbeWoRx systems with enhanced capabilities, and was
    approximately 20% complete as of the date of acquisition. The
    costs to complete this project consisted primarily of internal
    engineering labor costs. The project was completed in the first
    half of 2009. In accordance with FASB ASC 805, IPRD is no longer
    written off at the acquisition date, but instead capitalized as
    an intangible asset.
    Selling, General and Administrative. Selling,
    general and administrative expense is primarily comprised of
    salaries and related costs for sales, marketing, and general
    administrative personnel, as well as commissions and other
    non-personnel related expenses. Our selling, general and
    administrative expense was $33.2 million,
    $34.0 million and $33.6 million in 2007, 2008 and
    2009, respectively. The 28




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##### Table of Contents



year-over-year
    dollar increase from 2007 to 2008 in selling, general and
    administrative expense was primarily due to administrative costs
    associated with the merged activities of the PCTA and WSPG being
    included for 2008, partially offset by foreign exchange gains
    from our international operations. The
    year-over-year
    dollar decrease from 2008 to 2009 in selling, general and
    administrative expense was primarily due to the elimination of
    administrative costs associated with prior business
    combinations, and lower compensation costs in the 2009 period,
    offset by expenses as a result of the Adventa acquisition,
    manufacturing consolidation costs and foreign exchange losses
    from our international operations.  
    Impairment Charge for Goodwill and Identifiable Intangible
    Assets. Goodwill is tested for impairment annually
    or more frequently if an event or circumstance indicates that an
    impairment loss may have been incurred. Impairment charge for
    goodwill and identifiable intangible assets was $0 for both 2007
    and 2009, and was $227.1 million for 2008. We perform our
    annual goodwill impairment test on October 31st of
    every year. As of December 31, 2009, the entire goodwill
    balance is related to the Adventa acquisition completed in 2009.
    As of October 31, 2009, it was determined that the carrying
    value of this reporting unit was not less than fair value;
    therefore, there was no impairment of goodwill. During our
    annual goodwill impairment test in October 2008, we experienced
    a significant decline in our stock price. As a result of the
    decline in stock price, our market capitalization plus an
    implied control premium fell significantly below the recorded
    value of our consolidated net assets as of October 31,
    2008. In performing the goodwill impairment test, we used
    current market capitalization, control premiums, discounted cash
    flows and other factors as the best evidence of fair value. The
    impairment test resulted in no value attributable to our
    goodwill and accordingly, we wrote off all of our
    $192.9 million of goodwill as of October 31, 2008.    Interest Income and Other, Net. year-over-year
  Income Taxes.
     29




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##### Table of Contents



Liquidity
    and Capital Resources
           30




---



##### Table of Contents



and/or
  Form 10-K,
    Contractual
    Obligations
    Payments due by periodLess than 1


1-3


3-5


More thanTotal


year


years


years


5 yearsOperating lease obligations

$
13,306


$
2,791


$
4,048


$
2,946


$
3,521Open and committed purchase orders


16,868



16,868











Total

$
30,174


$
19,659


$
4,048


$
2,946


$
3,521   Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies
   31




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##### Table of Contents



Revenue Recognition.
  Allowance for Doubtful Accounts.
  Excess and Obsolete Inventory.
  Business Acquisitions.
   32




---



##### Table of Contents



Goodwill.
  Long-Lived Assets and Acquired Intangible Assets.
  Share-Based Compensation.
  Warranties.
  Accounting for Income Taxes.
 33




---



##### Table of Contents



Impact of
    Recent Accounting Pronouncements
  No. 2009-14
  No. 2009-13 605-25
   34




---



##### Table of Contents



No. 157-4,
  No. 107-b No. 28-a,
  No. 115-2, Other-Than-Temporary other-than-temporary other-than-temporary
   35




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Interest
    Rate and Credit Market Risk
  available-for-sale available-for-sale available-for-sale available-for-sale
  Foreign
    Currency Risk
    Item 8.
    Financial
    Statements and Supplementary Data.  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
     36




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##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f). Internal Control 
    Integrated Framework
    Form 10-K.
  Rule 13a-15(f)
  Item 9B.
    Other
    Information.   37




---



##### Table of Contents



PART III  Form 10-K
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Code of Ethics. http://www.rudolphtech.com.
  Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accounting Fees and Services.   38




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedule.  Form 10-K:
        page F-1
      ExhibitNo.

Description2
.1

Agreement and Plan of Merger, dated as of June 27, 2005, by
    and among the Registrant, NS Merger Sub, Inc. and August
    Technology Corporation (incorporated by reference to
    Exhibit 99.2 to the Registrants Schedule 13D
    filed on July 7, 2005).2
.2

Amendment No. 1, dated as of December 8, 2005, by and
    among the Registrant, NS Merger Sub, Inc. and August Technology
    Corporation, to the Agreement and Plan of Merger, dated as of
    June 27, 2005, by and among the Registrant, NS Merger Sub,
    Inc. and August Technology Corporation. (incorporated by
    reference to Exhibit 2.1 to the Registrants Current
    Report on
    Form 8-K
    filed on December 9, 2005).2
.3

Asset Purchase Agreement dated as of December 18, 2007, by
    and among the Registrant, Mariner Acquisition Company LLC,
    Applied Precision Holding, LLC and Applied Precision, LLC
    (incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K
    filed on December 21, 2007).3
.1

Restated Certificate of Incorporation of Registrant
    (incorporated by reference to Exhibit (3.1(b)) to the
    Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871
    filed on September 9, 1999).3
.2

Amended and Restated Bylaws of Registrant (incorporated by
    reference to Exhibit (3.2(b) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999.3
.3

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 15, 2006,
    No. 000-27965).3
.4

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on August 1, 2007,
    No. 000-27965).3
.5

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 2, 2009,
    No. 000-27965).4
.1

Rights Agreement (incorporated by reference to Exhibit 4.1
    of the Registrants Registration Statement on
    Form 8-A,
    filed on June 28, 2005, No
    000-27965).4
.2

August Technology Corporation 1997 Stock Incentive Plan
    (incorporated by reference to the Appendix to August Technology
    Corporations Proxy Statement for its 2004 Annual
    Shareholders Meeting, filed on March 11, 2004,
    No. 000-30637).10
.1+

License Agreement, dated June 28, 1995, between the
    Registrant and Brown University Research Foundation
    (incorporated by reference to Exhibit (10.1) to the
    Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.2*

Form of Indemnification Agreement (incorporated by reference to
    Exhibit (10.3) to the Registrants Registration Statement
    on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.3*

Amended 1996 Non-Qualified Stock Option Plan (incorporated by
    reference to Exhibit 10.15 to Registrants quarterly
    report on
    Form 10-Q
    (SEC File
    No. 000-27965),
    filed on November 14, 2001).10
.4*

Form of 1999 Stock Plan (incorporated by reference to Exhibit
    (10.5) to the Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999). 39




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##### Table of Contents



ExhibitNo.

Description10
.5*

Form of 1999 Employee Stock Purchase Plan (incorporated by
    reference to Exhibit (10.6) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.6*

Management Agreement, dated as of July 24, 2000, by and
    between Rudolph Technologies, Inc. and Paul F. McLaughlin
    (incorporated by reference to Exhibit 10.12 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 3, 2000) as amended August 20,
    2009 (incorporated by reference to Exhibit 10.1 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).10
.7*

Management Agreement, dated as of July 24, 2000 by and
    between Rudolph Technologies, Inc. and Steven R. Roth
    (incorporated by reference to Exhibit 10.14 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 3, 2000) as amended August 20,
    2009 (incorporated by reference to Exhibit 10.2 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).10
.8*

Registration Agreement, dated June 14, 1996 by and among
    the Registrant, 11, L.L.C., Riverside Rudolph, L.L.C.,
    Dr. Richard F. Spanier, Paul F. McLaughlin (incorporated by
    reference to Exhibit (10.9) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.9*

Stockholders Agreement, dated June 14, 1996 by and among
    the Registrant, Administration of Florida, Liberty Partners
    Holdings 11, L.L.C., Riverside Rudolph, L.L.C., Dr. Richard
    F. Spanier, Paul McLaughlin, Dale Moorman, Thomas Cooper
    and (incorporated by reference to Exhibit (10.10) to the
    Registrants
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.10*

Form of option agreement under 1999 Stock Plan (incorporated by
    reference to Exhibit 10.12 to Registrants quarterly
    report on
    Form 10-Q
    (SEC File
    No. 000-27965),
    filed on November 5, 2004).10
.11*

Form of Restricted Stock Award pursuant to the Rudolph
    Technologies, Inc. 1999 Stock Plan (incorporated by reference to
    the Registrants Current Report on
    Form 8-K
    filed on June 21, 2005).10
.12

Form of Company Shareholder Voting Agreement (incorporated by
    reference to Exhibit 99.2 to the Registrants
    Schedule 13D filed on July 7, 2005).10
.13*

Rudolph Technologies, Inc. 2009 Stock Plan (incorporated by
    reference to Appendix A of the Registrants revised
    Proxy Statement on Form DEFR14A, filed on May 8, 2009).10
.14*

Rudolph Technologies, Inc. 2009 Employee Stock Purchase Plan, as
    amended (incorporated by reference to Appendix B of the
    Registrants revised Proxy Statement on Form DEFR14A,
    filed on May 8, 2009).10
.15*

Executive Change of Control Agreement, dated as of
    August 20, 2009, by and between Rudolph Technologies, Inc.
    and Nathan H. Little (incorporated by reference to
    Exhibit 10.3 to Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).14
.1

Rudolph Technologies Code of Business Conduct and Ethics
    (incorporated by reference to Exhibit 14.1 to
    Registrants annual report on
    Form 10-K,
    filed on March 16, 2006).14
.2

Rudolph Technologies Financial Code of Ethics (incorporated by
    reference to Exhibit 14.1 to Registrants annual
    report on
    Form 10-K,
    filed on March 16, 2006).21
.1

Subsidiaries.23
.1

Consent of KPMG LLP, Independent Registered Public Accounting
    Firm.23
.2

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.31
.1

Certification of Paul F. McLaughlin, Chief Executive Officer,
    pursuant to Securities Exchange Act
    Rule 13a-14(a).31
.2

Certification of Steven R. Roth, Chief Financial Officer,
    pursuant to Securities Exchange Act
    Rule 13a-14(a).32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by Paul F. McLaughlin, Chief Executive Officer
    of Rudolph Technologies, Inc.32
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by Steven R. Roth, Chief Financial Officer of
    Rudolph Technologies, Inc.     +
    
    Confidential treatment has been granted with respect to portions
    of this exhibit.*
    
    Management contract, compensatory plan or arrangement. 40




---



##### 



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
 FINANCIAL STATEMENT SCHEDULE
   
 PageConsolidated Financial Statements:Reports of Independent Registered Public
    Accounting Firms


F-2Consolidated Balance Sheets as of
    December 31, 2008 and 2009


F-5Consolidated Statements of Operations for the
    years ended December 31, 2007, 2008 and 2009


F-6Consolidated Statements of Stockholders
    Equity and Comprehensive Income (Loss) for the years ended
    December 31, 2007, 2008 and 2009


F-7Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2008 and 2009


F-8Notes to the Consolidated Financial Statements


F-9Consolidated Financial Statement Schedule:Schedule of Valuation and Qualifying Accounts


F-35   F-1




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  
            F-2




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  
                F-3




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  
                  F-4




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except per share data)
  December 31,2008


2009ASSETSCurrent Assets:Cash and cash equivalents

$
67,735


$
57,839Marketable securities


10,549



3,080Accounts receivable, less allowance of $659 in 2008 and $602 in
    2009


21,764



35,312Inventories


57,076



45,534Income taxes receivable


4,698



3,501Prepaid expenses and other current assets


1,626



1,125Total current assets


163,448



146,391Property, plant and equipment, net


19,053



12,841Goodwill






3,282Identifiable intangible assets, net


9,654



10,821Capitalized software


1,774



1,237Deferred income taxes


2,903



3,098Other assets


600



533Total assets

$
197,432


$
178,203LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,354


$
5,683Accrued liabilities:Payroll and related expenses


2,805



3,163Royalties


197



247Warranty


1,813



700Deferred revenue


4,422



6,877Other current liabilities


4,169



2,940Total current liabilities


15,760



19,610Non-current liabilities


5,584



7,462Total liabilities


21,344



27,072Commitments and contingencies (Note 9)Stockholders equity:Preferred stock, $0.001 par value, 5,000 shares
    authorized, no shares issued and outstanding at
    December 31, 2008 and 2009






Common stock, $0.001 par value, 50,000 shares
    authorized, 30,703 and 30,997 issued and outstanding at
    December 31, 2008 and 2009, respectively


31



31Additional paid-in capital


383,510



387,486Accumulated other comprehensive loss


(2,543
)


(1,848
)Accumulated deficit


(204,910
)


(234,538
)Total stockholders equity


176,088



151,131Total liabilities and stockholders equity

$
197,432


$
178,203    F-5




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except per share data)
  Year Ended December 31,2007


2008


2009Revenues

$
160,129


$
131,040


$
78,657Cost of revenues


78,889



87,388



49,805Gross profit


81,240



43,652



28,852Operating expenses:Research and development


29,993



31,644



25,991In-process research and development


1,000







Selling, general and administrative


33,204



33,965



33,640Impairment charge for goodwill and identifiable intangible assets






227,105



Amortization


4,487



5,890



1,358Total operating expenses


68,684



298,604



60,989Operating income (loss)


12,556



(254,952
)


(32,137
)Interest income and other, net


4,149



1,151



270Income (loss) before provision (benefit) for income taxes


16,705



(253,801
)


(31,867
)Provision (benefit) for income taxes


4,846



(4,115
)


(2,239
)Net income (loss)

$
11,859


$
(249,686
)

$
(29,628
)Earnings (loss) per share:Basic

$
0.41


$
(8.16
)

$
(0.96
)Diluted

$
0.40


$
(8.16
)

$
(0.96
)Weighted average number of shares outstanding:Basic


29,168



30,614



30,888Diluted


29,312



30,614



30,888    F-6




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
    AND COMPREHENSIVE INCOME (LOSS)
    For the years ended December 31, 2007, 2008 and 2009
    (In thousands)
  Accumulated


RetainedAdditional


Other


EarningsCommon Stock


Paid-in


Comprehensive


(Accumulated





ComprehensiveShares


Amount


Capital


Loss


Deficit)


Total


Income (Loss)Balance at December 31, 2006


28,977


$
29


$
361,128


$
(1,178
)

$
32,897


$
392,876Issuance of shares through share-based compensation plans


196







1,344











1,344Net income


















11,859



11,859


$
11,859Adoption of ASC 740


















20



20Share-based compensation










3,119











3,119Excess tax benefit for sale of shares through share-based
    compensation plans










148











148Common stock issued in acquisition


1,307



1



14,147











14,148Currency translation














812







812



812Unrealized gain on investments














152







152



152Comprehensive income

























$
12,823Balance at December 31, 2007


30,480



30



379,886



(214
)


44,776



424,478Issuance of shares through share-based compensation plans


223



1



219











220Net loss


















(249,686
)


(249,686
)

$
(249,686
)Share-based compensation










3,405











3,405



Currency translation














(2,198
)






(2,198
)


(2,198
)Unrealized loss on investments














(131
)






(131
)


(131
)Comprehensive loss

























$
(252,015
)Balance at December 31, 2008


30,703



31



383,510



(2,543
)


(204,910
)


176,088Issuance of shares through share-based compensation plans


294







217











217Net loss


















(29,628
)


(29,628
)

$
(29,628
)Share-based compensation










3,759











3,759



Currency translation














786







786



786Unrealized loss on investments














(91
)






(91
)


(91
)Comprehensive loss

























$
(28,933
)Balance at December 31, 2009


30,997


$
31


$
387,486


$
(1,848
)

$
(234,538
)

$
151,131    F-7




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Year Ended December 31,2007


2008


2009Cash flows from operating activities:Net income (loss)

$
11,859


$
(249,686
)

$
(29,628
)Adjustments to reconcile net income (loss) to net cash and cash
    equivalents provided by operating activities:Impairment of goodwill and identifiable intangible assets






227,105



Amortization


5,700



7,243



1,895Depreciation


4,500



4,500



6,751In-process research and development


1,000







Foreign currency exchange (gain) loss


45



(2,547
)


822Net loss on sale of marketable securities






79



1Share-based compensation


3,119



3,405



3,759Provision for doubtful accounts and inventory valuation


496



14,569



4,775Deferred income taxes


(3,314
)


(2,449
)


(217
)Change in operating assets and liabilities excluding effects of
    business combinations:Accounts receivable


21,401



31,290



(13,196
)Income taxes receivable


(1,089
)


(4,164
)


969Inventories


(5,395
)


(4,287
)


6,922Prepaid expenses and other assets


(2,339
)


815



707Accounts payable


(3,326
)


(5,571
)


3,232Accrued liabilities


(3,958
)


(2,471
)


(1,227
)Income taxes payable


(537
)






Deferred revenue


(6,131
)


(1,581
)


1,619Other current liabilities


(617
)


(1,501
)


(1,252
)Non-current liabilities


2,168



640



2,009Net cash and cash equivalents provided by (used in) operating
    activities


23,582



15,389



(12,059
)Cash flows from investing activities:Purchases of marketable securities


(77,748
)


(15,541
)


(12,161
)Proceeds from sales of marketable securities


95,147



21,302



19,446Purchases of property, plant and equipment


(1,007
)


(2,966
)


(587
)Capitalized software


(712
)


(30
)


Purchase of business, net of cash acquired


(56,166
)


(8,474
)


(5,011
)Net cash and cash equivalents provided by (used in) investing
    activities


(40,486
)


(5,709
)


1,687Cash flows from financing activities:Issuance of shares through share-based compensation plans


1,344



220



217Tax benefit for sale of shares through share-based compensation
    plans


148







Net cash and cash equivalents provided by financing activities


1,492



220



217Effect of exchange rate changes on cash and cash equivalents


353



415



259Net increase (decrease) in cash and cash equivalents


(15,059
)


10,315



(9,896
)Cash and cash equivalents at beginning of year


72,479



57,420



67,735Cash and cash equivalents at end of year

$
57,420


$
67,735


$
57,839Supplemental disclosure of cash flow information:Net cash paid (received) during the year for:Income taxes

$
8,170


$
1,945


$
(3,062
)Non-cash investing activities:Acquisition costs for business combinations

$
1,315


$



$
Stock issued for business combinations

$
14,022


$



$
    F-8




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
 (In
    thousands, except per share data)
  1. Organization
    and Nature of Operations:
    2. Summary
    of Significant Accounting Policies:
  A. Consolidation:
    B. Revenue
    Recognition:
        C. Estimates:
   F-9




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    D. Cash
    and Cash Equivalents:
    E. Marketable
    Securities:
  available-for-sale. Available-for-sale available-for-sale Available-for-sale other-than-temporary other-than-temporary, available-for-sale
    F. Allowance
    for Doubtful Accounts:
    G. Inventories:
  (first-in,
  H. Property,
    Plant and Equipment:
   F-10




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
  I. Impairment
    of Long-Lived Assets:
    J. Goodwill
    and Other Intangible Assets:
      K. Concentration
    of Credit Risk:
    L. Warranties:
    M. Income
    Taxes:
   F-11




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
      N. Translation
    of Foreign Currencies:
      O. Share-based
    Compensation:
      P. Research
    and Development and Software Development Costs:
   F-12




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Q. Fair
    Value of Financial Instruments:
    R. Derivative
    Instruments and Hedging Activities:
      December 31,2008

2009Notional amount

$
2,322


$
1,042Fair value of liability

$
226


$
3     S. Recent
    Accounting Pronouncements:
  No. 2009-14
 F-13




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    No. 2009-13 605-25
      No. 157-4,
 F-14




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
  No. 107-b No. 28-a,
  No. 115-2, Other-Than-Temporary other-than-temporary other-than-temporary
    3. Business
    Combinations:
  PCTA
       F-15




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
      Accounts receivable

$
5,659Inventories


9,631Prepaid expenses and other current assets


61Property, plant and equipment


1,122Goodwill


46,175Identifiable assets


16,200Accounts payable and accrued liabilities


(5,521
)Deferred revenue


(159
)$
73,168   step-up
    
    the combination of PCTA and Rudolph products should allow the
    combined company to offer its customers a more comprehensive
    suite of tools and a better integrated set of tools, thus
    enhancing the Companys ability to compete more effectively;
    the ability of the assembled workforce to continue to deliver
    value-added solutions and develop new products and industry
    leading production technologies that solve customer problems;
    consolidation of territorial sales activities and common
    marketing programs;
    redeployment or elimination of duplicative functional and
    facilities costs;
    reduction of customer service costs as a result of the
    consolidation of the companies global customer service and
    regional support networks; and
    the combined experience, financial resources, development
    expertise, size and breadth of product offerings of the combined
    company may allow it to respond more quickly and effectively to
    technological change, increased consolidation and industry
    demands    Developed technology

$
11,600


8 years estimated useful lifeCustomer and distributor relationships


2,900


7.2 years weighted average estimated useful lifeTrade names


700


3 years estimated useful lifeIn-process research and development


1,000


Expensed at acquisition date$
16,200  F-16




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Pro Forma
    Combined Results of Operations
  step-up
  Year EndedDecember 31,2007(Unaudited)Revenues

$
194,262Net income

$
13,213Earnings per share:Basic

$
0.43Diluted

$
0.43   RVSI
    Inspection
    Adventa
    4. Fair
    Value Measurements:
   F-17




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
      Fair Value Measurements UsingQuoted Prices inActive Markets for


Significant Other


SignificantCarrying


Identical Assets


Observable Inputs


Unobservable InputsValue


(Level 1)


(Level 2)


(Level 3)December 31, 2008U.S. Treasury notes

$
219


$
219


$



$
Auction rate securities


361











361All other marketable securities


9,969







9,969



Foreign currency forward contracts


(226
)


(226
)






Total

$
10,323


$
(7
)

$
9,969


$
361December 31, 2009U.S. Treasury notes

$
212


$
212


$



$
Auction rate securities


248











248All other marketable securities


2,620







2,620



Foreign currency forward contracts


(3
)


(3
)






Total

$
3,077


$
209


$
2,620


$
248         Fair Value Measurements UsingSignificant Unobservable Inputs(Level 3)Balance at December 31, 2008

$
361Unrealized losses in accumulated other comprehensive loss


(113
)Purchases, issuances, and settlements, net


Balance at December 31, 2009

$
248  F-18




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
      5. Marketable
    Securities:
  available-for-sale. Available-for-sale available-for-sale other-than-temporary available-for-sale
    other-than-temporary
    Amortized


Gross Unrealized


Gross Unrealized


FairCost


Holding Gains


Holding Losses


ValueDecember 31, 2008Treasury notes and obligations of agencies

$
9,941


$
15


$
(27
)

$
9,929Tax-free auction rate securities


500







(139
)


361Asset-backed securities


257



2







259Total marketable securities

$
10,698


$
17


$
(166
)

$
10,549December 31, 2009Treasury notes and obligations of agencies

$
2,819


$
13


$



$
2,832Tax-free auction rate securities


500







(252
)


248Total marketable securities

$
3,319


$
13


$
(252
)

$
3,080  F-19




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    December 31, 2008


December 31, 2009Amortized


Fair


Amortized


FairCost


Value


Cost


ValueDue within one year

$
9,401


$
9,379


$
2,452


$
2,456Due after one through five years


797



809



367



376Due after five through ten years














Due after ten years


500



361



500



248Total marketable securities

$
10,698


$
10,549


$
3,319


$
3,080     In Unrealized Loss Position


In Unrealized Loss Positionfor less than 12 Months


for greater than 12 MonthsGross





GrossFair


Unrealized


Fair


UnrealizedValue


Losses


Value


LossesDecember 31, 2008Treasury notes and obligations of agencies

$
6,301


$
(27
)

$



$
Tax-free auction rate securities


361



(139
)






Total marketable securities

$
6,662


$
(166
)

$



$
December 31, 2009Treasury notes and obligations of agencies

$



$



$



$
Tax-free auction rate securities










248



(252
)Total marketable securities

$



$



$
248


$
(252
)     6. Inventories:
    December 31,2008


2009Materials

$
23,821


$
19,343Work-in-process


15,202



14,577Finished goods


18,053



11,614Total inventories

$
57,076


$
45,534    F-20




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    7.
    Property,
    Plant and Equipment:    December 31,2008


2009Land and building

$
4,927


$
4,927Machinery and equipment


16,647



13,382Furniture and fixtures


2,710



2,730Computer equipment


6,262



6,089Leasehold improvements


6,986



6,10237,532



33,230Accumulated depreciation


(18,479
)


(20,389
)Total property, plant and equipment, net

$
19,053


$
12,841     8.
    Identifiable
    Intangible Assets and Goodwill:  Identifiable
    Intangible Assets
    Gross Carrying


AccumulatedAmount


Amortization


Impairment


NetDecember 31, 2008Developed technology

$
51,243


$
15,858


$
28,259


$
7,126Customer and distributor relationships


7,300



1,766



4,810



724Trade names


4,100



1,132



1,164



1,804Total identifiable intangible assets

$
62,643


$
18,756


$
34,233


$
9,654December 31, 2009Developed technology

$
53,390


$
16,894


$
28,259


$
8,237Customer and distributor relationships


7,436



1,864



4,810



762Trade names


4,342



1,356



1,164



1,822Total identifiable intangible assets

$
65,168


$
20,114


$
34,233


$
10,821    F-21




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
  Identifiable
    Intangible Assets Impairment
    Goodwill
    Balance as of December 31, 2007

$
188,832PCTA acquisition


2,981Tax adjustments related to prior acquisition


1,059Goodwill impairment


(192,872
)Balance as of December 31, 2008


Adventa acquisition


3,282Balance as of December 31, 2009

$
3,282   Goodwill
    Impairment
      9.
    Commitments
    and Contingencies:  Intellectual
    Property Indemnification Obligations
   F-22




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
  Warranty
    Reserves
      Year Ended December 31,2007


2008


2009Balance, beginning of the year

$
2,171


$
2,365


$
1,813Accruals


2,669



1,868



894Warranty liability assumed in merger


532



215



Usage


(3,007
)


(2,635
)


(2,007
)Balance, end of the year

$
2,365


$
1,813


$
700   Legal
    Matters
    Lease
    Agreements
        Royalty
    Agreements
    Open and
    Committed Purchase Orders
   F-23




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
   10.
    Preferred
    Share Purchase Rights:        11.
    Share-Based
    Compensation and Employee Benefit Plans:  Share-Based
    Compensation Plans
       F-24




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Year Ended December 31,2007


2008


2009Share-based compensation expense:Stock options

$
721


$
508


$
453Restricted stock units


2,398



2,897



3,306Total share-based compensation


3,119



3,405



3,759Tax effect on share-based compensation


1,279



1,396



1,541Net effect on net income

$
1,840


$
2,009


$
2,218Tax effect on:Cash flows from financing activities

$
148


$



$
Effect on earnings per sharebasic

$
(0.06
)

$
(0.07
)

$
(0.07
)Effect on earnings per sharediluted

$
(0.06
)

$
(0.07
)

$
(0.07
)   Valuation Assumptions for Stock Options
    Year EndedDecember 31, 2009Expected life (years)


4.9Expected volatility


82.0
%Expected dividend yield


0.0
%Risk-free interest rate


2.0
%Weighted average fair value per option

$
4.50  F-25




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
  Stock
    Option Activity
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise Price


Contractual


IntrinsicShares


Per Share


Term (years)


ValueOutstanding at December 31, 2006


3,108


$
20.98Granted






Exercised


(96
)


11.54Expired


(241
)


14.39Forfeited


(16
)


21.93Outstanding at December 31, 2007


2,755



21.27Granted






Exercised


(11
)


1.95Expired


(425
)


22.52Forfeited


(12
)


15.96Outstanding at December 31, 2008


2,307



21.16Granted


397



6.88Exercised


(14
)


3.07Expired


(485
)


16.68Forfeited


(17
)


11.96Outstanding at December 31, 2009


2,188


$
19.75



4.0


$
36Vested or expected to vest at December 31, 2009


2,163


$
19.89



4.0


$
36Exercisable at December 31, 2009


1,773


$
22.64



2.8


$
36       Options Outstanding


Options ExercisableWeightedAverageRemaining


Weighted





WeightedRange of




Contractual


Average





AverageExercise Prices

Shares


Life (years)


Exercise Price


Shares


Exercise Price$ 3.55 - $ 9.32


446



8.5


$
6.97



56


$
7.58$10.00 - $15.48


460



4.1


$
13.51



439


$
13.44$15.55 - $21.13


449



3.5


$
17.38



445


$
17.39$21.78 - $26.20


451



2.7


$
24.41



451


$
24.41$26.75 - $50.30


382



1.0


$
39.41



382


$
39.41$ 3.55 - $50.30


2,188



4.0


$
19.75



1,773


$
22.64  F-26




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Restricted
    Stock Unit Activity
    Weighted AverageNumber of


Grant Date FairShares


ValueNonvested at December 31, 2006


336


$
16.68Granted


463


$
15.69Vested


(86
)

$
16.24Forfeited


(33
)

$
16.24Nonvested at December 31, 2007


680


$
16.08Granted


334


$
7.53Vested


(185
)

$
14.77Forfeited


(100
)

$
14.60Nonvested at December 31, 2008


729


$
12.70Granted


919


$
4.86Vested


(237
)

$
11.48Forfeited


(39
)

$
10.40Nonvested at December 31, 2009


1,372


$
7.72     Employee
    Stock Purchase Plan
    401(k)
    Savings Plan
   F-27




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Profit
    Sharing Program
    12.
    Interest
    Income and Other, Net:  Year Ended December 31,2007


2008


2009Interest income

$
4,143


$
1,230


$
271Realized losses on sale of marketable securities






(79
)


(1
)Rental income


6







Total interest income and other, net

$
4,149


$
1,151


$
270   13.
    Income
    Taxes:    Year Ended December 31,2007


2008


2009Current:Federal

$
3,827


$
(3,985
)

$
(2,640
)State


939



11



(46
)Foreign


3,395



2,308



2308,161



(1,666
)


(2,456
)Deferred:Federal


(2,507
)


(3,155
)


157State


(674
)


572



37Foreign


(134
)


134



23(3,315
)


(2,449
)


217Total income tax expense (benefit)

$
4,846


$
(4,115
)

$
(2,239
)    F-28




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    December 31,2008


2009Research and development credit carryforward

$
6,066


$
7,445Reserves and accruals not currently deductible


1,149



1,493Deferred revenue


1,507



1,015Domestic net operating loss carryforwards


358



7,393Depreciation


468



759Capital losses


493



497Foreign net operating loss and credit carryforwards


899



3,935Intangibles


23,045



17,379Tax deductible transaction costs


648



601Share-based compensation


1,238



114Inventory obsolescence reserve


5,754



5,098Other


563



668Gross deferred tax assets


42,188



46,397Valuation allowance for deferred tax assets


(36,491
)


(43,267
)Deferred tax assets after valuation allowance


5,697



3,130Intangibles


(2,593
)


Other


(201
)


(32
)Gross deferred tax liabilities


(2,794
)


(32
)Net deferred tax assets

$
2,903


$
3,098    F-29




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Year Ended December 31,2007


2008


2009Federal income tax provision at statutory rate

$
5,847


$
(88,830
)

$
(11,154
)State taxes, net of federal effect


306



(1,789
)


(904
)Non-deductible goodwill impairment charges






50,440



Foreign taxes net of federal effect






1,342



525In-process research and development write-off


350







Research tax credit


(992
)


(419
)


(37
)Domestic manufacturing benefit


(279
)






Change in valuation allowance for deferred tax assets


331



35,196



8,312True up of prior year benefit


(531
)


(45
)


580Other


(186
)


(10
)


439Provision (benefit) for income taxes

$
4,846


$
(4,115
)

$
(2,239
)Effective tax rate


29
%


2
%


7
%         December 31,2007


2008


2009Unrecognized tax benefits, opening balance

$
4,552


$
5,875


$
5,967Gross increasestax positions in prior period


635



700



(71
)Gross increasescurrent-period tax positions


1,301



225



68Lapse of statute of limitations


(613
)


(833
)


(433
)Unrecognized tax benefits, ending balance

$
5,875


$
5,967


$
5,531  F-30




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
          14.
    Manufacturing
    Consolidation:  Budd
    Lake, New Jersey, Facility
      Year Ended December 31, 2009Beginning Reserve


Charged to Costs


Payments


Ending ReserveBalance


and Expenses


and Other


BalanceAsset write-down

$



$
4,312


$
(4,312
)

$
Employee terminations






188



(29
)


159Manufacturing capacity






1,949







1,949$



$
6,449


$
(4,341
)

$
2,108  F-31




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
   15.
    Segment
    Reporting and Geographic Information:      Year Ended December 31,2007


2008


2009Systems:Inspection

$
86,196



53
%

$
73,465



56
%

$
38,027



48
%Metrology


34,738



22



21,118



16



8,921



11Parts


15,261



10



20,801



16



15,428



20Services


11,354



7



11,246



9



9,590



12Software licensing


12,580



8



4,410



3



6,691



9Total revenue

$
160,129



100
%

$
131,040



100
%

$
78,657



100
%     Year Ended December 31,2007


2008


2009Revenues from third parties:United States

$
36,710


$
30,744


$
21,673Asia


93,631



74,661



47,883Europe


29,788



25,635



9,101Total

$
160,129


$
131,040


$
78,657       16.
    Earnings
    (Loss) Per Share:   F-32




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
      Income


Shares


Per-Share(Numerator)


(Denominator)


AmountFor the year ended December 31, 2007Basic earnings per share:Net income

$
11,859



29,168


$
0.41Effect of dilutive stock options and restricted stock units






144



(0.01
)Diluted earnings per share:Net income

$
11,859



29,312


$
0.40For the year ended December 31, 2008Basic loss per share:Net loss

$
(249,686
)


30,614


$
(8.16
)Effect of dilutive stock options and restricted stock units










Diluted loss per share:Net loss

$
(249,686
)


30,614


$
(8.16
)For the year ended December 31, 2009Basic loss per share:Net loss

$
(29,628
)


30,888


$
(0.96
)Effect of dilutive stock options and restricted stock units










Diluted loss per share:Net loss

$
(29,628
)


30,888


$
(0.96
)   17.
    Share
    Repurchase Program  Form 10-K,
  18.
    Subsequent
    Events  Form 10-K Form 10-K
  19.
    Quarterly
    Consolidated Financial Data (unaudited):   F-33




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##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 (In
    thousands, except per share data)
    Year-over-year
  Quarters EndedMarch 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


TotalRevenues

$
37,210


$
38,416


$
38,986


$
16,428


$
131,040Gross profit


15,115



17,721



16,806



(5,990
)


43,652Loss before income taxes


(3,063
)


(2,814
)


(878
)


(247,046
)


(253,801
)Net loss


(1,646
)


(1,985
)


(448
)


(245,607
)


(249,686
)Loss per share:Basic

$
(0.05
)

$
(0.06
)

$
(0.01
)

$
(7.96
)

$
(8.16
)Diluted

$
(0.05
)

$
(0.06
)

$
(0.01
)

$
(7.96
)

$
(8.16
)Weighted average number of shares outstanding:Basic


30,533



30,669



30,781



30,842



30,614Diluted


30,533



30,669



30,781



30,842



30,614   Quarters EndedMarch 31,


June 30,


September 30,


December 31,2009


2009


2009


2009


TotalRevenues

$
11,061


$
15,341


$
23,330


$
28,925


$
78,657Gross profit


2,284



5,406



9,473



11,689



28,852Loss before income taxes


(10,958
)


(8,669
)


(5,574
)


(6,666
)


(31,867
)Net loss


(10,054
)


(8,625
)


(4,835
)


(6,114
)


(29,628
)Loss per share:Basic

$
(0.33
)

$
(0.28
)

$
(0.16
)

$
(0.20
)

$
(0.96
)Diluted

$
(0.33
)

$
(0.28
)

$
(0.16
)

$
(0.20
)

$
(0.96
)Weighted average number of shares outstanding:Basic


30,788



30,957



31,109



30,990



30,888Diluted


30,788



30,957



31,109



30,990



30,888  F-34




---



##### Table of Contents



RUDOLPH
    TECHNOLOGIES, INC. AND SUBSIDIARIES
  SCHEDULE OF
    VALUATION AND QUALIFYING ACCOUNTS
 (In
    thousands)
  Column A

Column B


Column C


Column D


Column EBalance atBeginning of


Charged to (Recovery


Charged to Other





Balance at EndDescription

Period


of) Costs and Expense


Accounts (net)


Deductions


of PeriodYear 2007:Allowance for doubtful accounts

$
299


$
(85
)

$



$



$
214Inventory valuation


2,805



661







72



3,394Warranty


2,171



2,669



532



3,007



2,365Deferred tax valuation allowance


964



331











1,295Year 2008:Allowance for doubtful accounts

$
214


$
445


$



$



$
659Inventory valuation


3,394



14,124







5,887



11,631Warranty


2,365



1,868



215



2,635



1,813Deferred tax valuation allowance


1,295



35,196











36,491Year 2009:Allowance for doubtful accounts

$
659


$
(57
)

$



$



$
602Inventory valuation


11,631



4,832







6,989



9,474Warranty


1,813



894







2,007



700Deferred tax valuation allowance


36,491



8,312



(853
)


683



43,267  F-35




---



##### Table of Contents



SIGNATURES
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY
    CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
    UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
  Rudolph Technologies, INC.
  By:
    /s/  Paul
    F. McLaughlin  Paul F. McLaughlin
 Chairman and Chief Executive Officer
  Date:
    March 5,
    2010   PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT
    OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING
    PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON
    THE DATES INDICATED.
  Signature

Title

Date/s/  Paul
    F. MclaughlinPaul
    F. Mclaughlin

Chairman and Chief Executive Officer

March 5, 2010/s/  Steven
    R. RothSteven
    R. Roth

Senior Vice President, Chief Financial Officer (Principal
    Financial Officer and Principal Accounting Officer)

March 5, 2010/s/  Leo
    BerlinghieriLeo
    Berlinghieri

Director

March 5, 2010/s/  Daniel
    H. BerryDaniel
    H. Berry

Director

March 5, 2010/s/  Thomas
    G. GreigThomas
    G. Greig

Director

March 5, 2010/s/  Richard
    F. SpanierRichard
    F. Spanier

Director

March 5, 2010/s/  Aubrey
    C. TobeyAubrey
    C. Tobey

Director

March 5, 2010/s/  John
    R. WhittenJohn
    R. Whitten

Director

March 5, 2010




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Description2
.1

Agreement and Plan of Merger, dated as of June 27, 2005, by
    and among the Registrant, NS Merger Sub, Inc. and August
    Technology Corporation (incorporated by reference to
    Exhibit 99.2 to the Registrants Schedule 13D
    filed on July 7, 2005).2
.2

Amendment No. 1, dated as of December 8, 2005, by and
    among the Registrant, NS Merger Sub, Inc. and August Technology
    Corporation, to the Agreement and Plan of Merger, dated as of
    June 27, 2005, by and among the Registrant, NS Merger Sub,
    Inc. and August Technology Corporation. (incorporated by
    reference to Exhibit 2.1 to the Registrants Current
    Report on
    Form 8-K
    filed on December 9, 2005).2
.3

Asset Purchase Agreement dated as of December 18, 2007, by
    and among the Registrant, Mariner Acquisition Company LLC,
    Applied Precision Holding, LLC and Applied Precision, LLC
    (incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K
    filed on December 21, 2007).3
.1

Restated Certificate of Incorporation of Registrant
    (incorporated by reference to Exhibit (3.1(b)) to the
    Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871
    filed on September 9, 1999).3
.2

Amended and Restated Bylaws of Registrant (incorporated by
    reference to Exhibit (3.2(b) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999.3
.3

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 15, 2006,
    No. 000-27965).3
.4

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on August 1, 2007,
    No. 000-27965).3
.5

Amendment to Restated Bylaws of Registrant (incorporated by
    reference to Exhibit 3.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 2, 2009,
    No. 000-27965).4
.1

Rights Agreement (incorporated by reference to Exhibit 4.1
    of the Registrants Registration Statement on
    Form 8-A,
    filed on June 28, 2005, No
    000-27965).4
.2

August Technology Corporation 1997 Stock Incentive Plan
    (incorporated by reference to the Appendix to August Technology
    Corporations Proxy Statement for its 2004 Annual
    Shareholders Meeting, filed on March 11, 2004,
    No. 000-30637).10
.1+

License Agreement, dated June 28, 1995, between the
    Registrant and Brown University Research Foundation
    (incorporated by reference to Exhibit (10.1) to the
    Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.2*

Form of Indemnification Agreement (incorporated by reference to
    Exhibit (10.3) to the Registrants Registration Statement
    on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.3*

Amended 1996 Non-Qualified Stock Option Plan (incorporated by
    reference to Exhibit 10.15 to Registrants quarterly
    report on
    Form 10-Q
    (SEC File
    No. 000-27965),
    filed on November 14, 2001).10
.4*

Form of 1999 Stock Plan (incorporated by reference to Exhibit
    (10.5) to the Registrants Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999)10
.5*

Form of 1999 Employee Stock Purchase Plan (incorporated by
    reference to Exhibit (10.6) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.6*

Management Agreement, dated as of July 24, 2000, by and
    between Rudolph Technologies, Inc. and Paul F. McLaughlin
    (incorporated by reference to Exhibit 10.12 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 3, 2000) as amended August 20,
    2009 (incorporated by reference to Exhibit 10.1 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).10
.7*

Management Agreement, dated as of July 24, 2000 by and
    between Rudolph Technologies, Inc. and Steven R. Roth
    (incorporated by reference to Exhibit 10.14 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 3, 2000) as amended August 20,
    2009 (incorporated by reference to Exhibit 10.2 to
    Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).10
.8*

Registration Agreement, dated June 14, 1996 by and among
    the Registrant, 11, L.L.C., Riverside Rudolph, L.L.C.,
    Dr. Richard F. Spanier, Paul F. McLaughlin (incorporated by
    reference to Exhibit (10.9) to the Registrants
    Registration Statement on
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).




---



##### Table of Contents



ExhibitNo.

Description10
.9*

Stockholders Agreement, dated June 14, 1996 by and among
    the Registrant, Administration of Florida, Liberty Partners
    Holdings 11, L.L.C., Riverside Rudolph, L.L.C., Dr. Richard
    F. Spanier, Paul McLaughlin, Dale Moorman, Thomas Cooper and
    (incorporated by reference to Exhibit (10.10) to the
    Registrants
    Form S-1,
    as amended (SEC File
    No. 333-86871),
    filed on September 9, 1999).10
.10*

Form of option agreement under 1999 Stock Plan (incorporated by
    reference to Exhibit 10.12 to Registrants quarterly
    report on
    Form 10-Q
    (SEC File
    No. 000-27965),
    filed on November 5, 2004).10
.11*

Form of Restricted Stock Award pursuant to the Rudolph
    Technologies, Inc. 1999 Stock Plan (incorporated by reference to
    the Registrants Current Report on
    Form 8-K
    filed on June 21, 2005).10
.12

Form of Company Shareholder Voting Agreement (incorporated by
    reference to Exhibit 99.2 to the Registrants
    Schedule 13D filed on July 7, 2005).10
.13*

Rudolph Technologies, Inc. 2009 Stock Plan (incorporated by
    reference to Appendix A of the Registrants revised
    Proxy Statement on Form DEFR14A, filed on May 8, 2009).10
.14*

Rudolph Technologies, Inc. 2009 Employee Stock Purchase Plan, as
    amended (incorporated by reference to Appendix B of the
    Registrants revised Proxy Statement on Form DEFR14A,
    filed on May 8, 2009).10
.15*

Executive Change of Control Agreement, dated as of
    August 20, 2009, by and between Rudolph Technologies, Inc.
    and Nathan H. Little (incorporated by reference to
    Exhibit 10.3 to Registrants quarterly report on
    Form 10-Q,
    filed on November 6, 2009).14
.1

Rudolph Technologies Code of Business Conduct and Ethics
    (incorporated by reference to Exhibit 14.1 to
    Registrants annual report on
    Form 10-K,
    filed on March 16, 2006).14
.2

Rudolph Technologies Financial Code of Ethics (incorporated by
    reference to Exhibit 14.1 to Registrants annual
    report on
    Form 10-K,
    filed on March 16, 2006).21
.1

Subsidiaries.23
.1

Consent of KPMG LLP, Independent Registered Public Accounting
    Firm.23
.2

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.31
.1

Certification of Paul F. McLaughlin, Chief Executive Officer,
    pursuant to Securities Exchange Act
    Rule 13a-14(a).31
.2

Certification of Steven R. Roth, Chief Financial Officer,
    pursuant to Securities Exchange Act
    Rule 13a-14(a).32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by Paul F. McLaughlin, Chief Executive Officer
    of Rudolph Technologies, Inc.32
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by Steven R. Roth, Chief Financial Officer of
    Rudolph Technologies, Inc.     +
    
    Confidential treatment has been granted with respect to portions
    of this exhibit.*
    
    Management contract, compensatory plan or arrangement.