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As filed with the Securities and Exchange Commission on November 18, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
INTEGRATED PROCESS EQUIPMENT CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
_________________________
DELAWARE 77-0296222
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
911 BERN COURT
SAN JOSE, CALIFORNIA 95122
(408) 436-2170
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
_________________________
SANJEEV R. CHITRE
CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
INTEGRATED PROCESS EQUIPMENT CORP.
911 BERN COURT
SAN JOSE, CALIFORNIA 95122
(408) 436-2170
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
_________________________
Copies to:
FRANCIS S. CURRIE, ESQ.
NEIL J. WOLFF, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(415) 493-9300
_________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED(1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER SHARE(1) PRICE(1)
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<S> <C> <C> <C> <C>
Common Stock 250,000 shares $10.375 $2,593,750.00 $786.00
====================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based on
the average of the high and low prices of the Common Stock on the Nasdaq
National Market on November 11, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
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PROSPECTUS
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250,000 SHARES
INTEGRATED PROCESS EQUIPMENT CORP.
COMMON STOCK
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All of the shares of common stock offered hereby (the "Shares") are being sold
by Intel Corporation (the "Selling Stockholder" or "Intel"). No underwriting
discounts, commissions or expenses are payable or applicable in connection with
the sale of such shares. The common stock (the "Common Stock") of Integrated
Process Equipment Corp. (the "Company" or "IPEC") is quoted on The Nasdaq
National Market ("Nasdaq") under the symbol "IPEC." The Shares will be sold from
time to time at then prevailing market prices, at prices relating to prevailing
market prices or at negotiated prices. The Company will receive no portion of
the proceeds from the sale of the Shares and will bear all of the expenses
incident to their registration other than underwriters' discounts, commissions
or stock transfer taxes relating to the Shares. On November 15, 1996, the
closing price of the Common Stock on Nasdaq was $12.875.
The Shares were issued by the Company upon the Selling Stockholder's exercise of
warrants. See "Selling Stockholder" and "Plan of Distribution."
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PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
"RISK FACTORS" LOCATED ON PAGE 4 OF THIS PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS ___________________, 1996.
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN
ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments, and exhibits, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Shares. This
prospectus (the "Prospectus") does not contain all of the information set forth
in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is made to the
Registration Statement. Statements in this Prospectus as to the contents of any
contract or other document referred to herein are not necessarily complete, and
in each instance in which a copy of such contract is filed as an exhibit to the
Registration Statement, reference is made to such copy, and each such statement
shall be deemed qualified in all respects by such reference. Copies of the
Registration Statement may be inspected, without charge, at the offices of the
Commission, or obtained at prescribed rates from the Public Reference Section of
the Commission at the address set forth below.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities of the
Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street. N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at Seven World
Trade Center, 13th Floor, New York, New York 10048; and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC also maintains a World Wide Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
Company's Common Stock is quoted for trading on The Nasdaq National Market and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington D.C. 20006.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K filed with the Commission for
the fiscal year ended June 30, 1996.
(b) The Company's Quarterly Report on Form 10-Q filed with the Commission
for the quarter ended September 30, 1996.
(c) All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act following the date of this Prospectus
and prior to the termination of the offering contemplated hereby.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, a copy of any
information that has been incorporated by reference in this Prospectus (not
including exhibits to information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates), upon written request to Investor Relations,
Integrated Process Equipment Corp., 4717 East Hilton Ave., Phoenix, Arizona
85034, or by telephone at (602) 517-7200.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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THE COMPANY
IPEC is a Delaware corporation organized in December 1991 and is the
successor by merger to a California corporation of the same name that was
incorporated in October 1989. The Company is primarily engaged in designing,
manufacturing, marketing and servicing equipment for the semiconductor
manufacturing industry.
IPEC Planar, the Company's chemical mechanical planarization ("CMP")
division, consists of the Company's IPEC Planar Phoenix operation (formerly
named Westech Systems, Inc. or "Westech") and the IPEC Planar Portland operation
(formerly named GAARD Automation Inc. or "GAARD"). IPEC Clean consists of the
former Athens Corp. ("Athens") operation and produces on site wet ultra high
purity chemical reprocessing systems, chemical distribution systems and cleaning
systems that can be marketed as stand alone products or clustered with IPEC
Planar's CMP systems. IPEC Precision consists of the Precision Materials
Operation acquired from Hughes Danbury Optical Systems, Inc. ("HDOS") and is
engaged in manufacturing of advanced plasma assisted chemical etching equipment
and metrology equipment for use primarily in manufacturing of silicon wafers and
semiconductor devices. The Company's principal executive office is located at
911 Bern Court, San Jose, California 95122, and its telephone number is
(408)436-2170.
SPECIAL NOTE ON FORWARD LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference into this
Prospectus contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, which are subject to the "safe harbor" created by that
section. These forward-looking statements include, but are not limited to,
statements concerning the size of the CMP polisher market; product introduction
and development; consolidation of subsidiary operating functions; industry
acceptance of products; dependence on major customers; competition; relocation
of operations; strategy; future revenue; operating margins, expenses and income;
dividend and tax rates; and access to equity or debt financing. Forward-looking
statements not specifically set forth above may also be found in these and other
sections of this Prospectus. The Company's actual future results could differ
materially from those projected in the forward-looking statements. Some factors
which could cause future actual results to differ materially from the Company's
recent results or those projected in the forward-looking statements are
described in "Risk Factors."
RISK FACTORS
An investment in the Shares involves a high degree of risk. In addition to
the other information contained and incorporated by reference in this
Prospectus, prospective investors should carefully consider the following
factors before purchasing the Shares.
History of Losses. Prior to the Company's acquisition of Westech in fiscal
1994, the Company did not have significant revenue. The Company had a net loss
in fiscal 1994 and fiscal 1996 of $8.9 million and $10.7 million, respectively.
The Company had a $3.4 million net loss in the first quarter of fiscal 1997.
Operating results for future periods are subject to numerous uncertainties, and
there can be no assurance that the Company will be profitable in fiscal 1997 or
on a quarterly basis.
Fluctuations in Operating Results. The Company's operating results are
subject to quarterly fluctuations due to a variety of factors, including
industry-wide changes in the demand for semiconductors or for semiconductor
production equipment; the timing of significant shipments and delays or
postponement of orders; acceptance of the Company's products; the gain or loss
of significant customers; competitive pressures; availability and costs of
components from the Company's suppliers; the timing of product announcements and
introductions by the Company, its customers or its competitors; the timing and
structure of acquisitions and dispositions or spin-offs; changes in the mix of
products sold; the level of international sales, which have lower margins than
domestic sales; delayed or canceled construction of wafer fabrication facilities
by customers; research and development expenses associated with new product
introductions; market acceptance of new or enhanced versions of the Company's
and its customers' products; reductions in personnel and the sufficiency of
capital resources to support operations at current levels. The Company cannot
assure that it will be able to anticipate or respond timely to changes in any of
the factors listed above, which could adversely affect operating results in one
or more
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fiscal quarters. For example, the Company's results in fiscal 1994 were
adversely impacted by an engineering redesign of its 372M CMP product. In the
second quarters of fiscal 1995 and 1996, the Company had losses due to
nonrecurring charges associated with the Athens, GAARD and HDOS acquisitions.
The Company had a loss in the first quarter of fiscal 1997, primarily because
IPEC Clean and IPEC Precision manufactured products and incurred operating
expenses based on sales plans which were not achieved, and to a lesser degree
due to increased cost of goods sold arising from warrants issued to a major
customer as described below. While the Company has attempted to reduce its
operating expenses, due to industry conditions, there can be no assurance that
the Company will be profitable in the second quarter. The Company intends to
move IPEC Clean's bulk chemical distribution and cleaning systems operations to
Phoenix, Arizona during fiscal 1997 in an effort to improve gross margins in the
long term. This move may adversely affect margins during the quarter in which
the move occurs and in following quarters. If current industry conditions
continue, the Company expects that revenue for fiscal 1997 will be below the
$184.5 million of revenue recorded in fiscal 1996.
The Company derives most of its revenue from the sale of products in a
price range from $100,000 to $1,300,000 per unit and the sale of a clustered
system can be priced much higher. As a result, the timing of individual
shipments can have a significant impact on the Company's results of operations
for a particular period. The Company has previously experienced order and
delivery delays and cancellations which caused the Company to miss its quarterly
revenue and profit projections and there can be no assurance that the Company
can avoid such order and delivery delays in the future. IPEC Clean does not
have significant backlog, and bookings in any quarter may vary. Significant
shipments by IPEC Precision are not expected before the fourth quarter of fiscal
1997. A significant portion of the Company's operating expenses are relatively
fixed in nature and planned expenditures are based in part on anticipated
orders. Ongoing expenditures for product development and engineering make it
difficult to reduce expenses in a particular quarter if the Company's sales
goals for the quarter are not met. Any inability to reduce spending quickly
enough to mitigate any revenue shortfall would magnify the adverse impact of the
revenue shortfall on the Company's results of operations.
The Company's fiscal 1997 operating results will also be affected by the
Company's exercise of its right to cause a significant customer to accelerate
planned orders and the issuance to the customer of additional warrants to
purchase IPEC Common Stock. During the first quarter of fiscal 1997, the
customer agreed to accelerate certain orders and the Company committed to issue
during the first three quarters of fiscal 1997 warrants to purchase an aggregate
minimum of 155,000 shares (of which warrants to purchase 60,000 shares have been
issued) and an aggregate maximum of 250,000 shares of Common Stock, resulting in
a $650,000 increase in cost of goods sold for the quarter. The number of warrant
shares to be issued depends on the extent to which the Company accelerates
shipments to the customer. The increase in cost of goods sold in any future
quarter depends on the number of warrant shares issued in excess of 155,000
warrant shares based on the value of the Common Stock at the time the original
agreement was signed. To the extent orders are accelerated during fiscal 1997,
this may reduce shipments anticipated for fiscal 1998. There can be no assurance
that the Company can obtain replacement orders for shipment in fiscal 1998.
Results of operations in any period should not be considered indicative of
the results to be expected for future periods. Fluctuations in operating
results may also result in fluctuations in the price of the Company's Common
Stock.
Dependence on Major Customers. A small number of customers account for a
significant percentage of the Company's sales volume and revenue. In fiscal
1995, Intel, IBM and Motorola represented 18%, 20% and 14%, respectively, of the
Company's revenue. In fiscal 1996, Intel represented 29% of the Company's
revenue. In the first quarter of fiscal 1997, Intel represented 48% of the
Company's revenue. The Company anticipates that its revenue will continue to
depend on major customers, although the companies considered major customers and
the percentage of the Company's revenue represented by each major customer may
vary from quarter to quarter. The loss of a major customer or any material
reduction in orders by such customers, including reductions due to market or
competitive conditions, would have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's future
success depends in part upon its ability to obtain orders from new customers, as
well as the financial condition of its customers and the general economy. Sales
of certain of the Company's products generally depend on new facility
construction projects and facility upgrades and there can be no assurance that
the Company's current customers will make significant purchases of the Company's
products in the future.
Product Concentration; Dependence on New Products and Technologies. In
fiscal 1996, the Company derived approximately 78% of its revenue from sales by
IPEC Planar and approximately 20% of its revenue from sales by IPEC Clean. In
the first quarter of fiscal 1997, sales by IPEC Planar were 92% of the Company's
revenue. Semiconductor
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manufacturing equipment and processes are subject to rapid technological changes
and product obsolescence. The Company's strategy depends in part on developing
and introducing products which lower the semiconductor manufacturer's cost of
ownership, which involves a number of factors, including product acquisition and
operating expenses, throughput, reliability, footprint and wafer yields. The
Company believes that its future success will depend in part upon its ability to
develop and enhance its existing products and develop new products to meet such
anticipated technological changes. The Company's future results are highly
dependent on market acceptance of the Company's AvantGAARD 676, which is
designed to be a high-throughput metal and oxide CMP tool, but is now qualified
for only metal processing. While the Company has developed an oxide process for
the AvantGAARD 676, this process is being qualified and has not yet been
commercially adopted by any customer. The Company has also been developing its
Avanti 672 to integrate CMP processing and water cleaning, and its Plasma Jet
wafer etching tool. The Company is attempting to market product bays and, with
other companies, to develop "performance optimized production systems" ("POPS").
Semiconductor equipment companies often experience delays in completing advanced
products. The Company has experienced delays in developing new CMP tools and
processes, cleaning and reprocessing products and the Plasma Jet tool and the
Company cannot assure that any product in development will be completed as
scheduled or that completed products will be commercially adopted. If any of the
Company's products are not commercialized in a timely manner, the Company could
be required to write off inventory and other assets related to the development
project. To the extent products developed by the Company are based upon
anticipated changes in semiconductor production technologies, sales for such
products may be adversely affected if other technology becomes accepted in the
industry.
Competition. The semiconductor equipment industry is an intensely
competitive market. The Company believes that domestic and international
competition in CMP polisher systems, clustered CMP polisher and cleaning
systems, and chemical reprocessing systems is likely to increase substantially.
The Company is aware of a number of companies currently marketing CMP systems
that directly compete with the Company's systems. Competition is increasing
significantly in the market for high throughput planarization systems. In
addition, in December 1995, Applied Materials, Inc. announced a CMP system for
oxide that has not yet been commercially accepted, but which would compete
directly with the Company's CMP product offerings. The Company is aware that
other capital equipment manufacturers not currently involved in the development
of CMP systems may also attempt to enter and develop products for this market or
to develop alternative technologies which, if successful, would reduce the need
for the Company's products. The Company is aware of several companies that
market chemical reprocessing systems similar to those sold by the Company. The
trend towards consolidation in the semiconductor equipment industry has made it
increasingly important to have the financial resources necessary to compete
effectively across a broad range of product offerings, to fund customer service
and support on a world-wide basis and to invest in both product and process
research and development. Certain current and potential competitors have
substantially greater financial resources, name recognition and more extensive
engineering, manufacturing, marketing and customer service and support
capabilities than the Company. The Company expects its current competitors to
continue to improve the design and performance of their existing products and
processes, and to introduce new products and processes with improved price and
performance characteristics. New product introductions or product announcements
by the Company's competitors could cause a decline in sales or loss of market
acceptance of the Company's existing products. Moreover, increased competitive
pressure could lead to intensified price based competition, which could have a
materially adverse effect on the Company's business, financial condition and
results of operations.
International Sales. International sales accounted for approximately 24%
and 34% of the Company's revenue in fiscal 1995 and 1996, respectively.
International sales were approximately 47% of revenue in the first quarter of
fiscal 1997. International sales carry lower gross margins than domestic sales.
The Company expects that international sales will continue to account for a
significant portion of its revenue in future periods. International sales are
subject to certain inherent risks including tariffs, embargoes and other trade
barriers, staffing and operating foreign sales and service operations, managing
distributors and collecting accounts receivable. The Company is also subject to
risks associated with regulations relating to the import and export of high
technology products. The export of the Company's products to certain countries
is limited by law. The Company cannot predict whether quotas, duties, taxes or
other charges or restrictions upon the importation or exportation of the
Company's products in the future will be implemented by the United States or any
other country. Fluctuations in currency exchange rates could cause the
Company's products to become relatively more expensive to customers in a
particular country, leading to a reduction in sales or profitability in that
country. While the Company's sales are currently denominated only in U.S.
dollars, future international activity may result in foreign currency
denominated sales. Gains and losses on the conversion to U.S. dollars of
accounts receivable and accounts payable arising from international
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operations may contribute to fluctuations in the Company's results of
operations. There can be no assurance that any of these factors will not have a
material adverse effect on the Company's business, financial condition and
results of operations.
Asian Market. The Company believes that its future success will depend in
part upon continued acceptance of its products by Asian semiconductor
manufacturers. This market segment is large, represents a substantial
percentage of the worldwide semiconductor manufacturing capacity, and is
difficult for foreign companies to penetrate. Asian manufacturers may develop
alternative techniques, or may enhance existing techniques such as spin-on glass
and deposited glass, to achieve acceptable yields for DRAMs and other integrated
circuits involving three or more metal layers and line widths at or below 0.5
micron. The Company believes that increased penetration of the Asian markets is
critical to its financial results and intends to continue to invest significant
resources in such markets in order to meet this objective. The Company
currently sells its products in Asian countries through distributors. If the
Company determines to develop a direct presence in these markets, particularly
Japan, such decision would require the allocation of substantial management and
financial resources, may adversely affect the Company's relationship with its
current distributors, and would increase a number of risks related to
international sales as described above. There can be no assurance that the
Company will achieve acceptance of its products in this market.
Cyclicality of Semiconductor Industry. The Company's business depends upon
capital expenditures by manufacturers of semiconductor devices, primarily for
the opening of new or expansion of existing fabrication facilities which, in
turn, depends upon the current and anticipated market demand for semiconductor
devices and products utilizing such devices. The semiconductor industry is
highly cyclical and has experienced significant overall growth in recent years,
which has resulted in growth in the semiconductor capital equipment industry.
However, the semiconductor industry is currently experiencing a downturn, which
could have a severe adverse effect on the industry's demand for semiconductor
processing equipment. In certain instances, industry downturns have lasted for
extended periods of time. There can be no assurance that past growth in the
semiconductor and semiconductor capital equipment industries, or the resulting
growth in the Company's business, can be sustained in the future or that the
recent downturn in the market will not continue. The Company's planned
operations assume that a significant portion of new orders will result from
demand from semiconductor manufacturers building or expanding fabrication
facilities for advanced multi-level semiconductor devices with design
requirements of 0.5 micron and below, and there can be no assurance that such
demand will exist. The Company's business, financial condition and results of
operations would be materially adversely affected if semiconductor manufacturers
do not increase their capacity to produce these advanced semiconductor devices,
or if there is a slowing of growth or a decline in production by the
semiconductor industry.
Recent Acquisitions. The Company's growth in annual revenues from fiscal
1994 through fiscal 1996 has resulted not only from expansion of its core CMP
business, but also from acquisitions in fiscal 1994, 1995 and 1996. The
companies acquired had not operated profitably before their acquisition by IPEC.
IPEC Clean's financial performance has declined in recent periods and IPEC
Precision has not yet achieved significant revenue from shipments of production
equipment. The Company's expansion through acquisitions has resulted in
significantly higher operating expenses, particularly because the Company's
strategy has been to initially operate each acquired business independently,
resulting in separate marketing, customer support and administrative functions.
The Company is currently in the process of consolidating these functions at IPEC
Planar Phoenix. There can be no assurance that the Company will be able to
improve the revenue or operating results of these acquired businesses.
Future Acquisitions and Dispositions. The Company's strategy is to obtain
additional wafer fabrication technologies and may involve, in part, acquisitions
of products, technologies or businesses from third parties. In addition, the
Company may make additional acquisitions to obtain additional distribution
capacity in specified geographic markets. An acquisition could absorb
substantial cash resources, require the Company to incur or assume debt
obligations, or involve the issuance of additional Common Stock which could
dilute the Company's outstanding Common Stock. An acquisition which is
accounted for as a purchase, like the acquisitions of Westech, Athens, GAARD or
the Precision Materials Operation of HDOS, could involve significant one-time
non-cash writeoffs, or could involve the amortization of goodwill over a number
of years, which would adversely affect earnings in those years. An acquired
entity may have unknown liabilities, and its business may not achieve the
results anticipated at the time of the acquisition. The Company may dispose of
or spin off portions of its businesses which the Company determines are not
complementary to its strategy. Any acquisition, disposition
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or spin off would absorb significant management time and could adversely affect
the Company's business, financial condition and results of operations.
Industry Acceptance of Products. The CMP process is in an early stage of
implementation and has not yet been broadly adopted by semiconductor
manufacturers for volume production. Most major semiconductor manufacturers are
beginning to introduce the CMP process only for pilot line production of
integrated circuits with three or more metal layers and line widths at or less
than 0.5 micron. Only a limited number of semiconductor manufacturers are
producing commercial quantities of integrated circuits with these
characteristics using CMP machines. To date, the Company's products have been
used primarily in the manufacture of advanced semiconductor logic and memory
devices. There can be no assurance that the CMP process will be broadly adopted
or that alternative processes will not be used to achieve planarity in the
manufacture of advanced semiconductor devices. If the CMP process is not
accepted in the market, or if alternatives to the CMP process emerge, or if
other planarization technologies improve to serve the industry's planarity
requirements, then the Company's business, financial condition and results of
operations would be materially adversely affected.
IPEC Clean's revenue prior to its acquisition primarily consisted of
chemical reprocessing systems and related products which were sold to a small
number of leading semiconductor manufacturers. IPEC Clean's future results
depend largely upon broader acceptance of its chemical reprocessing systems,
upon acceptance of the Company as a provider of chemical distribution systems,
and upon successful integration of IPEC Clean's cleaners with the Company's CMP
products. Similarly, IPEC Precision's products are based on technologies which
have not been adopted by the semiconductor manufacturing industry, and there can
be no assurance that customers will accept these products, or that these
products can be sold profitably or in volume. The failure of the semiconductor
industry to accept the Company's systems and products could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Future Capital Needs. The Company believes that its cash and cash
equivalents will need to be supplemented by additional equity or debt financing
during the first half of fiscal 1997 (ending December 31, 1996). The Company's
ability to finance its operations at the current level and to fund working
capital requirements will be adversely impacted if it is unable to complete an
equity or debt financing during the first half of fiscal 1997. There can be no
assurance that such additional financing will be available when needed or, if
available, will be on satisfactory terms. In order to raise capital, the
Company may issue debt or equity securities senior to the outstanding Common
Stock, and may incur substantial dilution. The Company may also consider selling
assets. The failure to obtain additional financing when needed on satisfactory
terms would also hinder the Company's ability to make continued capital
investments, which could materially adversely affect the Company's competitive
position and results of operations.
Dependence on Third Party Manufacturers and on Single Source Suppliers.
The Company relies on a limited number of independent manufacturers to provide
certain components in assemblies made to the Company's specifications and use in
the Company's products. In the event that the Company's subcontractors were to
experience financial, operational, production or quality assurance difficulties
that resulted in the reduction or interruption of supply to the Company, the
Company's business, financial condition and results of operations would be
materially adversely affected. In addition, the Company purchases certain key
components from qualified vendors for which alternative qualified sources are
not currently available. Any prolonged inability to obtain adequate amounts of
qualified components would have a material adverse effect on the Company's
business, financial condition and results of operations.
Intellectual Property. The Company's success depends in significant part
on the proprietary nature of its technology. There can be no assurance that the
patents issued to the Company will provide the Company with meaningful
advantages, or that any patent issued to the Company will not be challenged.
The two initial patents relating to the Company's single wafer planarization
system products are scheduled to expire in 1997. In 1993, the technology
covered by these patents currently forming the basis of the CMP process and used
in the Company's primary products was licensed on a royalty-free basis to a
competitor pursuant to a settlement arrangement in which the Company also
incurred settlement obligations aggregating $1.4 million, of which $150,000
remained outstanding at September 30, 1996. The Company currently has no
patents with respect to its acid reprocessing technology outside the United
States. To the extent that a competitor of the Company is able to reproduce or
otherwise capitalize on the Company's technology prior to the issuance of a
patent, it may be difficult or impossible for the Company to obtain necessary
intellectual property protection in the United States or other countries where
such competitor conducts its operations. Moreover, the laws of foreign
countries may
-8-
<PAGE>
not protect the Company's intellectual property to the same extent
as do the laws of the United States. There can be no assurance that the steps
taken by the Company to protect its proprietary technology will be adequate or
that its competitors will not be able to develop similar or functionally
equivalent technology. There has been substantial litigation regarding patent
and other intellectual property rights in semiconductor related industries.
In the future the Company may receive notice of claims of infringement of
other parties' proprietary rights, and there can be no assurance that a claim
for infringement, invalidity or indemnification will not be asserted against the
Company or that any such assertions will not have a material adverse effect on
the Company's business, financial condition and results of operations. If any
Company equipment is found to infringe a patent, a court may grant an injunction
to prevent making, selling or using the equipment in the applicable country.
Irrespective of the validity or success of such claims, the Company could incur
significant costs with respect to the defense thereof, which could have a
material adverse effect on the Company's business, financial condition and
results of operations. If infringement claims are asserted against the Company,
the Company may seek to obtain a license of such third party's intellectual
property rights, which may not be available under reasonable terms or at all.
Litigation may be necessary to enforce patents issued to the Company, to protect
trade secrets or know-how owned by the Company, to defend the Company against
claimed infringement of the rights of others and to determine the scope and
validity of proprietary rights of others. The Company also relies on trade
secrets and proprietary technology that it seeks to protect, in part, through
confidentiality agreements with employees and other parties. There can be no
assurance that these agreements will not be breached, that the Company will have
adequate remedies for any breach or that the Company's trade secrets will not
otherwise become known to or independently developed by others.
The Company also has entered into significant agreements that provide for
the escrow, licensing and royalty payment of the Company's technology to various
third parties. The Company manufactures the AvantGAARD 676 under a license from
a volume manufacturer of advanced microprocessors. The Company has escrowed
technical data sufficient to permit such manufacturer to manufacture the
Company's AvantGAARD 676, for release if the Company does not meet certain
criteria regarding product or spare part delivery schedules to the manufacturer.
If the data is released from escrow, the manufacturer could manufacture the
AvantGAARD 676 or have the AvantGAARD 676 manufactured by others for its use.
The escrow terminates in October 1998.
Product Liability and Environmental Regulations. The nature of the
Company's business exposes it to product liability claims, as well as the risk
that harmful substances will escape into the workplace and the environment and
cause damage or injuries. For example, in June 1995 and again in July 1996, an
acid reprocessor malfunctioned and caused sulfuric acid to escape from its
quartz cylinder container. In these instances no acid escaped from the
compartment containing the quartz cylinder and no damage to the manufacturing
facility resulted; however, there can be no assurance that the Company's
products will not malfunction in the future or that damage to a customer's
facilities will not result. The Company and its customers are subject to
stringent federal, state and local regulations governing the storage, use,
discharge and disposal of toxic, volatile or otherwise hazardous chemicals used
in their manufacturing operations. Current or future regulations could require
the Company or its customers to make substantial expenditures for preventive or
remedial action, reduction of chemical exposure or waste treatment or disposal.
To the extent that the Company's strategy to provide integrated on-site wet
chemical management services to its customers is successful, the Company faces
increased risks with respect to environmental and occupational health and safety
liabilities.
Effect of Certain Anti-Takeover Provisions. The Company's Certificate of
Incorporation authorizes the Company's Board of Directors to issue preferred
stock in one or more series and to fix the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued shares of preferred
stock and to fix the number of shares constituting any series and the
designation of such series, without further vote or action by its stockholders.
The voting power held by the Company's officers and directors may give those
individuals substantial influence over any corporate action submitted to the
Company's shareholders. Pursuant to Delaware corporate law, the approval of the
outstanding Preferred Stock may be required for certain corporate actions. Any
series of Preferred Stock which the Company may issue in the future would
participate in these class voting rights and may have additional independent
rights to approve certain actions. The Company is subject to Section 203 of the
Delaware General Corporate Law. The voting power held by officers and
directors, outstanding rights to elect members of the Company's Board of
Directors, the voting rights of outstanding Preferred Stock and Preferred Stock
which may be issued in the future and the application of Delaware General
Corporate Law Section 203 could discourage certain types of transactions
involving an actual or potential change in control of the Company, including
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<PAGE>
transactions in which the holders of Common Stock who are not officers and
directors might otherwise receive a premium for their shares over then current
prices, and may limit the ability of such stockholders to cause or approve
transactions which they may deem to be in their best interests. See "Description
of Capital Stock--Anti-Takeover Effects."
Dependence on Key Personnel. The Company's future success is dependent
upon its ability to attract and retain qualified management, technical, sales
and support personnel. The competition for such personnel is intense. The loss
of certain key people or the Company's inability to attract and retain new key
employees could have a material adverse effect on the Company's business,
financial condition and results of operations. During July and October 1996, the
Company effected reductions in its work force to reduce its expenses and may do
so in the future. Repeated layoffs could adversely affect the retention of
employees, and could adversely affect the Company's ability to hire new
personnel if industry conditions improve and the Company's volume of production
increases. Personnel terminations at IPEC Precision include technical personnel,
who could be difficult to replace if IPEC Precision successfully markets its
products and requires additional engineering staff to support customers.
Volatility of Stock Price. The Company's Common Stock has experienced
substantial price volatility and such volatility may occur in the future,
particularly as a result of quarter to quarter variations in the actual or
anticipated financial results of the Company or of other companies in the
semiconductor industry, or in the markets served by the Company, or
announcements by the Company or its competitors regarding new product
introductions. In addition, the stock market has experienced extreme price and
volume fluctuations that have affected the market price of many technology
companies' stocks in particular and that have often been unrelated or
disproportionate to the operating performance of these companies. These factors
may adversely affect the market price of the Common Stock.
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<PAGE>
USE OF PROCEEDS
This Prospectus relates to the Shares being offered and sold for the
account of the Selling Stockholder. The Company will receive no portion of the
proceeds from the sale of the Shares and will bear all of the expenses incident
to their registration other than underwriters' discounts, commissions or stock
transfer taxes relating to the Shares. See "Plan of Distribution."
SELLING STOCKHOLDER
The Shares are being offered for the account of the Selling Stockholder.
The Selling Stockholder acquired beneficial ownership of the Shares by
exercising warrants (the "Warrants") issued to the Selling Stockholder pursuant
to a Warrant Purchase Agreement dated October 4, 1996 between the Company and
the Selling Stockholder (the "Warrant Agreement"). Prior to the effective date
of this Prospectus, the Selling Stockholder did not own any shares of the Common
Stock, but owned a currently exercisable Warrant to purchase up to 60,000 shares
of Common Stock. All Shares were issued to the Selling Stockholder upon the
exercise of the Warrants. Under the terms of the Warrant Agreement, subject to
certain conditions and limitations, the Company may issue to the Selling
Stockholder Warrants to purchase up to 190,000 shares of Common Stock in
addition to the Warrant to purchase 60,000 shares of Common Stock currently held
by the Selling Stockholder.
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<PAGE>
PLAN OF DISTRIBUTION
The Shares may be distributed from time to time by the Selling Stockholder.
The Selling Stockholder will act independently of the Company in making
decisions with respect to its sales of the Shares.
The Selling Stockholder may sell or distribute some or all of the Shares
from time to time through underwriters or dealers or brokers or other agents or
directly to one or more purchasers, in transactions (which may involve block
transactions) on Nasdaq, privately negotiated transactions or in the over-the-
counter market, or in a combination of such transactions. Such transactions may
be effected by the Selling Stockholder at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. Brokers, dealers, agents or
underwriters participating in such transactions as agent may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholder (and, if it acts as agent for the purchaser of such shares,
from such purchaser). Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Stockholder in connection with
such sales.
The Selling Stockholder and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Stockholder can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between the Selling Stockholder and any underwriter, broker, dealer or other
agent relating to the sale or distribution of the shares.
The Company has filed a Registration Statement in which this Prospectus is
included for the purposes of permitting the Selling Stockholder to make resales
of the Shares. Such resale may commence at the time such Registration Statement
is declared effective by the Commission and continue for as long as such
Registration Statement remains in effect.
Notwithstanding the foregoing paragraph, if the Company provides to the
Selling Stockholder a certificate signed by the President or Chief Financial
Officer of the Company stating that, in good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for the Selling Stockholder to sell the Shares under the
Registration Statement during any 60 day period (the "Blackout Period")
designated by the Company, then the Selling Stockholder must not sell any of the
Shares during the Blackout Period.
In addition, under applicable rules and regulations under the Exchange Act,
any person engaged in a distribution of any of the Shares may not simultaneously
engage in market activities with respect to the Common Stock for a period of
nine business days prior to the commencement of such distribution. Without
limiting the foregoing, the Selling Stockholder will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation Rules 10b-5, 10b-6 and 10b-7, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholder. All of the foregoing may affect the marketability of the Common
Stock.
The Company will receive no portion of the proceeds from the sale of the
Shares and will bear all of the expenses incident to their registration other
than underwriters' discounts, commissions or stock transfer taxes relating to
the Shares.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, 3,500,000 shares of Class A Common Stock, and 2,000,000 shares
of Preferred Stock of which 21,478, 21,478 and 21,478 shares have been
designated Series B-1, B-2 and B-3 Preferred Stock, respectively.
COMMON STOCK AND CLASS A COMMON STOCK
The rights of the holders of the Common Stock and the Class A Common Stock
are essentially identical, except that: (i) the holders of the Common Stock
are entitled to one vote per share, and holders of Class A Common Stock are
entitled to four votes per share with respect to all matters on which holders
of the Company's Common Stock are entitled to vote, (ii) if stock dividends,
splits, distributions, reverse splits, combinations, reclassification of
shares, or other recapitalizations (collectively, "recapitalizations") are
declared or effected, such recapitalizations shall be effected in a like
manner with respect to the Common Stock and the Class A Common Stock except
that payments in shares of capital stock shall be paid in Common Stock with
respect to Common Stock and Class A Common Stock with respect to Class A
Common Stock, and (iii) shares of Class A Common Stock are convertible into
Common Stock at the option of the holder at any time on a share-for-share
basis.
Shares of Class A Common Stock are automatically converted into shares of
Common Stock upon their transfer to any person other than the following
transferees (the "Permitted Transferees"): (a) the spouse, lineal descendants
or adopted children ("Family Members"); (b) a trust for the sole benefit of
Family Members; (c) a partnership or a corporation wholly owned by Class A
Common Stockholders and their Family Members; and (d) any other Class A Common
Stockholder. Class A Common Stock held by a partnership or a corporation may
be transferred to its partners or stockholders existing at the time a
transferor acquired its Class A Common Stock or if such Partner or stockholder
is a Permitted Transferee. There is no trading market for the Class A Common
Stock.
Subject to the preferences of the Preferred Stock, holders of the Common
Stock and Class A Common Stock have equal ratable rights to dividends from
funds legally available therefor, when, as and if declared by the Board of
Directors and are entitled to share ratably, as a single class, in all of the
assets of the Company available for distribution to holders of shares of
Common Stock and Class A Common Stock upon the liquidation, dissolution or
winding up of the affairs of the Company. Holders of Common Stock do not have
preemptive, subscription or conversion rights. There are no redemption or
sinking fund provisions for the benefit of the Common Stock or Class A Common
Stock in the Company's Certificate of Incorporation.
PREFERRED STOCK
The Preferred Stock may be issued in series, and shares of each series will
have such rights and preferences as are fixed by the Board in the resolutions
authorizing the issuance of that particular series. In designating any series
of Preferred Stock, the Board may, without further action by the holders of
Common Stock, fix the number of shares constituting that series and fix the
dividend rights, dividend rate, conversion rights, voting rights (which may be
greater or lesser than the voting rights of the Common Stock), rights and
terms of redemption (including any sinking fund provisions), and the
liquidation preferences of the series of Preferred Stock.
The holders of the Series B-1, B-2 and B-3 Preferred Stock have no voting
rights except as required by law or in connection with an amendment of the
Certificate of Incorporation of the Company which may adversely effect their
preferences, rights, powers or privileges. The holders of the Series B-1, B-2
and B-3 Preferred Stock are entitled to an annual cumulative dividend of $5.59
per share, accruing from September 3, 1993, payable on each December 31 and
June 30, beginning on June 30, 1994, June 30, 1995 and June 30, 1996 for the
Series B-1, B-2 and B-3 Preferred, respectively. Upon the dissolution or
liquidation of the Company, the holder of each share of Series B-1, B-2 and B-
3 Preferred Stock shall be entitled to payment of $93.12 before the holders of
the
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<PAGE>
Common Stock or Class A Common Stock (or any other series of Preferred Stock
which is junior to the Series B Preferred Stock on dissolution or liquidation)
receive any payment. Each share of Series B-1 and B-2 Preferred Stock is
convertible into 12.54 and 11.41 shares of Common Stock, respectively. Each
share of Series B-3 Preferred Stock is convertible into 15 shares of Common
Stock. The conversion rate on the Series B Preferred Stock would be adjusted
in the event of a stock dividend, stock split, combination or reclassification
of the Common Stock. The Series B Preferred Stock has certain anti-dilution
rights upon certain issuances of rights or warrants and distributions of
indebtedness on the Common Stock. The Series B-1, B-2 and B-3 Preferred Stock
is not subject to redemption.
ANTI-TAKEOVER EFFECTS
The existence of the Class A Common Stock may make the Company a less
attractive target for a hostile takeover bid or render more difficult or
discourage a merger proposal, an unfriendly tender offer, a proxy contest, or
the removal of incumbent management, even if such transactions were favored by
the stockholders of the Company other than the Class A Common Stockholders.
Thus, the stockholders may be deprived of an opportunity to sell their shares
at a premium over prevailing market prices in the event of a hostile takeover
bid. Those seeking to acquire the Company through a business combination may
be compelled to consult first with the Class A Common Stockholders in order to
negotiate the terms of such business combination. Any such proposed business
combination will have to be approved by the Board of Directors, which may be
under the control of the Class A Common Stockholders, and if stockholder
approval were required, the approval of the Class A Common Stockholders may be
necessary before any such business combination could be consummated.
The Board of Directors has the authority without stockholder approval to
issue an additional 1.6 million shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and the number of
shares constituting any series or the designation of such series. The issuance
of Preferred Stock could adversely affect the voting power of holders of
Common Stock or the likelihood that such holders will receive a dividend
payment or payments upon liquidation and could have the effect of delaying,
deterring or preventing a change in control of the Company or the removal of
management. The Company has no present plan to issue any shares of Preferred
Stock.
The Company is subject to the provisions of Section 203 of the Delaware
General Corporate Law; an anti-takeover law. In general, the statute prohibits
a publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date
that the person became an interested stockholder unless (with certain
exceptions) the business combination or the transaction in which the person
became an interested stockholder is approved in a prescribed manner.
Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the stockholder.
Generally, an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within a three year period, did own) 15%
or more of a corporation's outstanding voting stock. This provision may have
the effect of delaying, deterring or preventing a change in control of the
Company without further action by the stockholders.
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<PAGE>
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati, P.C.,
650 Page Mill Road, Palo Alto, California 94304-1050.
EXPERTS
The consolidated financial statements of Integrated Process Equipment Corp.
and subsidiaries as of June 30, 1996 and for the year then ended have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The consolidated financial statements of Integrated Process Equipment Corp.
and subsidiaries as of June 30, 1995 and for the two year period then ended have
been incorporated by reference herein and in the Registration Statement in
reliance upon the report of Richard A. Eisner & Company, LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
Securities and Exchange Commission registration fee.... $ 786.00
Nasdaq Additional Listing Fee.......................... 5,000.00
Accounting fees and expenses........................... 4,000.00
Legal fees and expenses................................ 7,000.00
Miscellaneous.......................................... 3,000.00
----------
Total........................................... $19,786.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. The Company's Certificate of
Incorporation, as amended, and the Bylaws, as amended, provide for
indemnification of its directors, officers, employees and other agents to the
maximum extent permitted by the Delaware Corporation law. In addition, the
Company has entered into Indemnification Agreements with its officers and
directors. The Company also currently maintains an officers' and directors'
liability insurance policy which insures, subject to the exclusions and
limitations of the policy, officers and directors of the Company against certain
liabilities which might be incurred by them solely in such capacities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
4.1 Certificate of Incorporation, as amended.
Incorporated by reference to Exhibit 3.1
to the Company's Annual Report on Form
10-KSB for the fiscal year ended June 30,
1993 (File No. 0-20470) (the "1993 Form
10-KSB").
4.2 Amendment of Certificate of
Incorporation, effective December 16,
1993. Incorporated by reference to
Exhibit 3.2 to Amendment No. 1, filed on
December 30, 1993 ("SB-2 Amendment No.
1") to the Registrant's Registration
Statement on Form SB-2 (Registration No.
33-70962) (the "SB-2 Registration
Statement").
4.3 By-Laws, as amended. Incorporated by
reference to Exhibit 3.3 to SB-2
Amendment No. 1.
4.4 Warrant Purchase Agreement, dated as of
October 4, 1996, between the Company and
Intel Corporation. Incorporated by
reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q filed on
November 14, 1996 for the quarter ended
September 30, 1996.
II-1
<PAGE>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
5.1 Opinion of Wilson Sonsini Goodrich &
Rosati, P.C. regarding the legality of
the securities registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Wilson Sonsini Goodrich &
Rosati, P.C. (included in Exhibit 5.1 above)
24.1 Powers of Attorney (see page II-4)
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect
in the prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective Registration
Statement; and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
--------
however, that (1)(i) and (1)(ii) above do not apply if the information required
- -------
to be included in a post-effective amendment thereby is contained in periodic
reports filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized:
INTEGRATED PROCESS EQUIPMENT CORP.
a Delaware Corporation
By: /s/ SANJEEV R. CHITRE
-----------------------------
Sanjeev R. Chitre
Chairman of the Board of Directors and Chief
Executive Officer
Date: November 13, 1996
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sanjeev R. Chitre and John S. Hodgson,
jointly and severally his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1934, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ SANJEEV R. CHITRE Chairman of the Board and Chief November 13, 1996
- --------------------------- Executive Officer (Principal
Sanjeev R. Chitre Executive Officer)
/s/ JOHN S. HODGSON Vice President, Chief Financial November 14, 1996
- --------------------------- Officer, Treasurer and Secretary
John S. Hodgson (Principal Financial and
Accounting Officer)
/s/ HAROLD C. BALDAUF Director November 14, 1996
- ---------------------------
Harold C. Baldauf
Director November __, 1996
- ---------------------------
Roger D. Emerick
Director November __, 1996
- ---------------------------
William J. Freschi
/s/ KENNETH LEVY Director November 14, 1996
- ---------------------------
Kenneth Levy
/s/ ROGER D. MCDANIEL Director November 12, 1996
- ---------------------------
Roger D. McDaniel
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
5.1* -- Opinion of Wilson Sonsini Goodrich & Rosati,
P.C.
23.1* -- Consent of KPMG Peat Marwick LLP
23.2* -- Consent of Richard A. Eisner & Company, LLP
23.3* -- Consent of Wilson Sonsini Goodrich & Rosati,
P.C. (included in Exhibit 5.1)
24.1* -- Power of Attorney (see p. II-4)
- ------------
* Filed herewith
II-5
<PAGE>
EXHIBIT 5.1
November 14, 1996
Integrated Process Equipment Corp.
911 Bern Court
San Jose, California 95122
RE: REGISTRATION STATEMENT ON FORM S-3
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Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about November 18, 1996 (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of up to 250,000 shares of your Common Stock
(the "Shares"). The Shares are to be sold by the Selling Stockholder as
described in the Registration Statement.
As your counsel, we have examined the proceedings taken by you in connection
with the issuance of the Shares. It is our opinion that upon valid exercise of
the warrants of the Company held by or issuable to the Selling Stockholder as
described in the Registration Statement, and receipt by the Company of the full
consideration to be paid upon exercise, the Shares will be legally issued, fully
paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the Prospectus constituting a part thereof and any amendments thereto
which have been approved by us.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI
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WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
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EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
The Board of Directors
Integrated Process Equipment Corp.
We consent to incorporation by reference in the registration statement on Form
S-3 of Integrated Process Equipment Corp. of our report dated August 2, 1996,
relating to the consolidated balance sheet of Integrated Process Equipment Corp.
and subsidiaries as of June 30, 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended, which
report appears in the June 30, 1996 annual report on Form 10-K of Integrated
Process Equipment Corp. and to the reference to our firm under the heading
"Experts" in the registration statement.
/s/ KPMG Peat Marwick LLP
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KPMG Peat Marwick LLP
Phoenix, Arizona
November 13, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF RICHARD A. EISNER & COMPANY, LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Integrated Process
Equipment Corp. for the registration of 250,000 shares of its common stock and
to the incorporation by reference therein of our report dated August 18, 1995,
with respect to the consolidated financial statements of Integrated Process
Equipment Corp. as at June 30, 1995 and for each of the years in the two-year
period then ended incorporated by reference in its Annual Report (Form 10-K) for
the year ended June 30, 1996 and the related financial statement schedule
included therein, filed with the Securities and Exchange Commission.
/s/ Richard A. Eisner & Company, LLP
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Richard A. Eisner & Company, LLP
New York, New York
November 13, 1996
