<PAGE>
SCHEDULE 14A INFORMATION
------------------------
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(C) or (S)240.14a-12
INTEGRATED PROCESS EQUIPMENT CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as specified in its charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:___________
(2) Aggregate number of securities to which transaction applies:______________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined.): ____________________________
(4) Proposed maximum aggregate value of transaction: _________________________
(5) Total fee paid: __________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________________
(3) Filing Party: ____________________________________________________________
(4) Date Filed: ______________________________________________________________
<PAGE>
INTEGRATED PROCESS EQUIPMENT CORP.
-----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 21, 1996
-----------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
Integrated Process Equipment Corp. (the "Company"), a Delaware corporation, will
be held on Thursday, November 21, 1996 at 10:00 a.m., local time, at the Phoenix
Airport Hilton, 2435 South 47th Street, Phoenix, Arizona 85034, for the
following purposes:
1. To elect directors of the Company to serve until the next Annual
Meeting or the election of their successors.
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the 1997 fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 25, 1996
are entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
All Stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the postage-
prepaid envelope enclosed for that purpose. Any stockholder attending the
meeting may vote in person even if he or she has returned a proxy.
BY ORDER OF THE BOARD OF DIRECTORS
John S. Hodgson
Secretary
San Jose, California
October 28, 1996
- -------------------------------------------------------------------------------
| YOUR VOTE IS IMPORTANT |
| |
| TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE MARK, SIGN, DATE |
| AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED |
| POSTAGE-PAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON |
| EVEN IF YOU RETURNED A PROXY. |
- -------------------------------------------------------------------------------
<PAGE>
INTEGRATED PROCESS EQUIPMENT CORP.
-----------------------
PROXY STATEMENT
1996 ANNUAL MEETING OF STOCKHOLDERS
-----------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Integrated Process Equipment Corp. (the "Company") for use at the Annual Meeting
of Stockholders to be held on Thursday, November 21, 1996 at 10:00 a.m., local
time, or at any adjournments thereof. The Annual Meeting will be held at the
Phoenix Airport Hilton, 2435 South 47th Street, Phoenix, Arizona 85034. The
principal executive offices of the Company are located at 911 Bern Court, San
Jose, California 95112. The Company's telephone number at that location is
(408) 436-2170.
These proxy solicitation materials are being mailed on or about November 1,
1996 to stockholders entitled to vote at the meeting, accompanied by a copy of
the Company's 1996 Annual Report to Stockholders.
RECORD DATE AND SHARE OWNERSHIP
Only holders of record of Common Stock and Class A Common Stock at the
close of business on October 25, 1996 (the "Record Date") are entitled to
notice of and vote at the meeting. At the Record Date, 14,354,511 shares of the
Company's Common Stock, $0.01 par value and 521,650 shares of the Company's
Class A Common Stock, $0.01 par value, were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by (i) delivering to the Company's
Secretary at the principal executive office listed above, a written notice of
revocation or a duly executed proxy bearing a later date or (ii) attending the
Annual Meeting and voting in person. Attending the Annual Meeting in and of
itself may not constitute a revocation of a proxy.
VOTING AND SOLICITATION
Each share of Common Stock outstanding on the record date is entitled to
one vote. Each share of Class A Common Stock outstanding on the Record Date is
entitled to four votes.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether a quorum is
present. The affirmative vote of the majority of the Votes Cast will be
required under Delaware law to approve each Proposal except the election of
directors. Directors shall be elected by a plurality of the Votes Cast. The
"Votes Cast" are defined under Delaware law to be the shares of the Company's
Common Stock and Class A Common Stock present in person or represented by proxy
at the Annual Meeting and "entitled to vote on the subject matter" multiplied by
the number of votes to which each such share is entitled. Votes that are cast
<PAGE>
against a Proposal will be counted for purposes of determining (i) the presence
or absence of a quorum for the transaction of business and (ii) the total number
of Votes Cast with respect to the Proposal. Abstentions will be counted for
purposes of determining both (i) the presence or absence of a quorum for the
transaction of business and (ii) the total number of Votes Cast with respect to
the Proposal. Accordingly, abstentions will have the same effect as a vote
against the Proposal. Broker non-votes will not be counted as Votes Cast.
The cost of soliciting proxies will be borne by the Company. The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation, in
person or by telephone or facsimile.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING OF
STOCKHOLDERS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1997 Annual Meeting of Stockholders must
be received by the Company no later than July 3, 1997 to be included in the
proxy statement and form of proxy relating to that meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of capital stock of the Company as of September
27, 1996, by (i) all persons known to the Company to be the beneficial owners of
more than 5% of the Company's capital stock, (ii) the Company's Chief Executive
Officer and the other most highly paid executive officers other than the Chief
Executive Officer whose annual compensation in fiscal 1996 exceeded $100,000,
(iii) each of the Company's directors and (iv) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK SHARES BENEFICIALLY OWNED * (1)
--------------------------------------------------------
PERCENT OF
NUMBER PERCENT OF NUMBER OF VOTING
NAME (2) OF SHARES SHARES (3) VOTES (4) POWER (4)
- ------------------------------------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
The Capital Group Companies, Inc.(5)........ 1,433,900 10% 1,433,900 9%
Avantika Sanjeev Chitre Irrevocable
Trust(6).................................... 254,382 2% 1,017,528 6%
Harold C. Baldauf(7)........................ 563,855 4% 563,855 3%
Sanjeev R. Chitre(8)........................ 481,489 3% 1,250,956 8%
Roger D. Emerick(9)........................ -- -- -- --
William J. Freschi(10)...................... 70,232 ** 70,232 **
John S. Hodgson(11)......................... 60,000 ** 60,000 **
Kenneth Levy(12)............................ -- -- -- --
Roger D. McDaniel........................... -- -- -- --
Thomas C. McKee(13)......................... 40,643 ** 40,643 **
All executive officers and directors as a
group (8 persons)(14)....................... 1,215,576 8% 1,985,043 12%
- ---------------------------------------
</TABLE>
* Excludes stockholders who were five percent stockholders at September
27, 1996 and subsequently dropped below five percent.
** Less than one percent.
-2-
<PAGE>
(1) For purposes of the table, shares of Common Stock and Class A Common
Stock are referred to collectively as "Common", and shares of Series
B-1, B-2 and B-3 Preferred Stock are referred to collectively as
"Preferred." Each share of the Series B-1, B-2 and B-3 Preferred Stock
is convertible into 12.54, 11.41 and 15 shares of Common Stock,
respectively. The Preferred Stock is listed on an as converted basis.
(2) The address of each person or entity set forth herein is the address
of the Company appearing elsewhere in this Proxy Statement except as
appears in the footnotes below.
(3) Represents the percent of shares beneficially owned on a fully diluted
basis.
(4) The Class A Common Stock is entitled to four votes per share. The
Common Stock is entitled to one vote per share. The Preferred Stock
is not entitled to vote. However, for purposes of number of votes and
percent of voting power, the Preferred Stock is included on an as
converted basis (See footnote 1 above). Options outstanding at
September 27, 1996 and exercisable within 60 days after September 27,
1996 have been included as voting shares for purposes of calculating
the number of votes and the percentage of votes.
(5) The Schedule 13G filed by The Capital Group Companies, Inc. on
September 9, 1996 states that certain operating subsidiaries of The
Capital Group Companies, Inc. exercised investment discretion over
various institutional accounts which held as of August 30, 1996,
1,433,900 shares of the Company. Capital Guardian Trust Company, a
bank, and one of such operating subsidiaries, exercised investment
discretion over 1,155,000 of shares of the Company. Capital Research
and Management Company, and Capital International, Inc., registered
investment advisers, and Capital International S.A., another operating
subsidiary, had investment discretion with respect to 200,000, 75,000
and 3,900 shares of the Company, respectively. The address of The
Capital Group Companies, Inc. is 333 South Hope Street, Los Angeles,
California 90071.
(6) Includes 254,382 shares of Class A Common Stock. Neither Sanjeev
Chitre nor his wife has a beneficial interest in the shares held in
the name of the Avantika Sanjeev Chitre Irrevocable Trust dated July
1, 1991 (the "Trust"). Bruce W. McRoy, the trustee, holds sole voting
and investment power with respect to such shares. The beneficiary of
the Trust is Sanjeev Chitre's daughter, Avantika Sanjeev Chitre. The
address of the Trust is c/o Bruce W. McRoy, 15 Carrillo Street, Santa
Barbara, California 93101.
(7) Includes 350,307 shares of Common Stock issuable upon conversion of
7,204, 9,772 and 9,898 shares of Series B-1, B-2 and B-3 Preferred
Stock, respectively, at the conversion rates described in footnote 2
above. Includes 30,000 shares of Common Stock subject to options
exercisable within 60 days. See "Executive Compensation". Mr.
Baldauf's address is c/o Saginaw Control & Engineering, 95 Midland
Road, Saginaw, Michigan 48603.
(8) Includes 256,489 shares of Class A Common Stock and 205,000 shares of
Common Stock subject to options exercisable within 60 days. See
"Executive Compensation".
(9) Mr. Emerick's address is Lam Research Corp., 45757 North Port Loop
West, Fremont, California 94538.
(10) Includes 55,000 shares of Common Stock subject to options exercisable
within 60 days. See "Executive Compensation". Mr. Freschi's address
is Alex. Brown & Sons, 101 California Street, San Francisco,
California 94111.
(11) Includes 60,000 shares of Common Stock subject to options exercisable
within 60 days. See "Executive Compensation".
(12) Mr. Levy's address is KLA Instruments, 160 Rio Robles, San Jose,
California 95161-9055.
(13) Includes 40,000 shares of Common Stock subject to options exercisable
within 60 days. See "Executive Compensation".
(14) Includes 350,307 shares of Common Stock issuable upon conversion of
7,204, 9,772 and 9,898 shares of Series B-1, B-2 and B-3 Preferred
Stock, respectively, at conversion rates described in footnote 1
above. Includes 390,000 shares of Common Stock subject to options
exercisable within 60 days. See "Executive Compensation".
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
A board of six directors is to be elected at the Annual Meeting. The
Company's Bylaws provide for the Board of Directors to determine the number of
directors (but not below one director). The Company's Board of Directors is
currently set at six. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the six nominees of the Board of Directors
named below, all of whom are presently directors of the Company. If any nominee
is unable or declines to serve as a director at the time of the Annual Meeting,
the proxies will be voted for any nominee designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominee will be
unable or will decline to serve as a director. If stockholders nominate persons
other than the Company's nominees for election as directors, the proxy holders
will vote all proxies received by them to assure the election of as many of the
Company's nominees as possible, with the proxy holder making any required
selection of specific nominees to be voted for. The term of office of each
person elected as a director will continue until the next Annual Meeting of
Stockholders or until a successor has been elected and qualified.
-3-
<PAGE>
The following table sets forth information concerning the nominees at
September 27, 1996 that is based on data furnished by them.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- ------------------------ --- ------------------------------------------------- ----------
<S> <C> <C> <C>
Sanjeev R. Chitre(1).... 41 Chairman of the Board of Directors and Chief 1989
Executive Officer of the Company
Harold C. Baldauf....... 64 Chairman of the Board of Directors of Saginaw 1993
Control and Engineering and of Southwest
Automation Systems, Inc.
Roger D. Emerick(2)..... 57 Chief Executive Officer and Chairman of the Board 1995
of Directors of Lam Research Corporation
William J. Freschi(3)... 56 Principal of Alex. Brown & Sons Incorporated 1992
Kenneth Levy(2)......... 53 Chairman of the Board of Directors and Chief 1995
Executive Officer of KLA Instruments
Roger D. McDaniel(3).... 57 Director of MEMC Electronic Materials, Inc. and of 1996
the Semiconductor Equipment and Materials Institute
- -------------------------
</TABLE>
(1) Member of the Executive Committee.
(2) Member of the Stock Option Committee and the Compensation Committee.
(3) Member of the Audit Committee.
SANJEEV R. CHITRE founded the Company and has been the Chairman of the
Board and Chief Executive Officer since its organization in October 1989. Mr.
Chitre was Vice President of marketing and sales of Superwave Technology, Inc.,
a manufacturer of automated in-line systems for the semiconductor industry, from
1984 through 1989.
HAROLD C. BALDAUF has been a director of the Company since September 1993.
Mr. Baldauf was a principal stockholder, director and Vice President of the
Company's subsidiary Westech Systems, Inc., now known as IPEC Planar Phoenix
Inc. ("Planar Phoenix") for more than five years prior to its acquisition. Mr.
Baldauf is Chairman of the Board of Directors of Saginaw Control and Engineering
("Saginaw Control") and the Chairman of the Board of Directors of Southwest
Automation Systems, Inc. ("Southwest Automation"). Mr. Baldauf is also a
consultant to the Company and to Southwest Automation. In connection with the
Company's acquisition of Planar Phoenix, the Company entered into a
Stockholders' Rights Agreement with Mr. and Mrs. Baldauf giving Mr. Baldauf the
right (so long as the Baldauf family owns 50,000 or more shares of the Company's
Common Stock) to designate two directors to the Company's Board of Directors.
Mr. Baldauf was elected and is nominated to the Company's Board of Directors as
one of his designees.
ROGER D. EMERICK joined the Company's Board of Directors in September 1995.
He has been the Chief Executive Officer and Chairman of the Board of Directors
of Lam Research Corporation, a semiconductor production equipment supplier,
since 1982 and served as President from 1982 to 1996. Mr. Emerick is currently a
director of Electroglas, Inc., Brooks Automation, Inc. and Western Quality
Association.
-4-
<PAGE>
WILLIAM J. FRESCHI has been a director of the Company since September 1992.
He has been a principal of the investment banking firm of Alex. Brown & Sons
Incorporated since 1984.
KENNETH LEVY has been a director of the Company since May 1995. Since
1974, he has been the Chief Executive Officer of KLA Instruments, a
semiconductor manufacturing instrumentation company. Mr. Levy is a director of
Ultratech Stepper, Inc., Network Peripherals, Inc. and KLA Instruments. Mr.
Levy also serves as a director emeritus of the Semiconductor Equipment and
Materials Institute ("SEMI"), an international industry association of material
and equipment manufacturers which serves the semiconductor industry.
ROGER D. McDANIEL has been a director of the Company since August 1996.
From April 1989 until August 1996, Mr. McDaniel was the Chief Executive Officer
of MEMC Electronic Materials, Inc., a silicon wafer producer. Mr. McDaniel has
served as a director of MEMC Electronic Materials, Inc. since April 1989. Mr.
McDaniel is also a director and past Chairman of SEMI.
VOTE REQUIRED
The six nominees for director receiving the highest number of affirmative
votes of the Votes Cast shall be elected as directors. Votes withheld from any
director are counted for purposes of determining the presence or absence of a
quorum and the total number of Votes Cast with respect to the election of
directors. Broker non-votes will not be counted for purposes of determining the
number of Votes Cast.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held nine meetings during the 1996
fiscal year. All nominees attended 75% or more of the meetings of the Board of
Directors and of the committees of the Board on which the director served. The
Board of Directors has an Executive Committee, Audit Committee, Compensation
Committee and Stock Option Committee. The Board does not have a Nominating
Committee.
The Executive Committee, of which Mr. Chitre is the sole member, did not
act during fiscal 1996. The Executive Committee has authority to exercise all
the powers and authority of the Board of Directors in the management and affairs
of the Company between meetings of the Board of Directors, to the extent
permitted by law.
Until May 31, 1996 the Audit Committee during fiscal 1996 consisted of Mr.
Freschi and a former director, Mr. Michael Splinter. The Audit Committee
currently consists of Mr. Freschi and Mr. McDaniel. The Audit Committee held one
meeting during fiscal 1996. The Audit Committee recommends engagement of the
Company's independent auditors, approves the services performed by the Company's
independent auditors and reviews the Company's accounting principles and its
system of internal accounting controls.
Until October 1995, the Compensation Committee during fiscal 1996
consisted of Mr. Freschi and a former director, Mr. Michael Splinter. The
Compensation Committee currently consists of Mr. Emerick and Mr. Levy. The
Compensation Committee held one meeting during fiscal 1996. The Compensation
Committee reviews and makes recommendations to the Board concerning the
Company's executive compensation policy, bonus plans and equity incentive plans.
-5-
<PAGE>
Until October 1995, the Stock Option Committee during fiscal 1996
consisted of Mr. Freschi and a former director, Mr. Michael Splinter. The Stock
Option Committee currently consists of Mr. Emerick and Mr. Levy. The Stock
Option Committee acted once by written consent and held no meetings during
fiscal 1996. The Stock Option Committee determines the grant of stock options to
purchase shares of Common Stock of the Company pursuant to the 1992 Stock Option
Plan (the "1992 Plan").
DIRECTOR COMPENSATION
Non-employee, non-consultant directors of the Company are entitled to
receive up to $1,000 per day for attendance at each Board of Directors or
committee meeting. All directors are reimbursed for reasonable expenses
incurred by them in acting as a director or as a member of any committee of the
Board of Directors.
During the fiscal year ended June 30, 1996, the stockholders of the Company
approved stock option grants to Mr. Chitre, Mr. Levy and a former director, Dr.
Donald Jackson, made in May 1995 for 800,000, 75,000 and 60,000 shares,
respectively, of Common Stock at an exercise price of $28.75 per share; Stock
option grants to Mr. Chitre, Mr. Emerick and Dr. Jackson made in October 1995
for 87,500, 75,000 and 28,125 shares, respectively, of Common Stock at an
exercise price of $31.00 per share; and a stock option grant to Mr. Freschi made
in January 1996 for 75,000 shares of Common Stock at an exercise price of $21.00
per share. After June 30, 1996, the Company granted Mr. McDaniel a stock option
for 30,000 shares of Common Stock at an exercise price of $13.875, and offered
directors holding stock options issued on or after April 20, 1995 with an
exercise price exceeding $13.875 per share, the right to exchange their options
for options with an exercise price of $13.875 per share. See "Compensation
Committee and Stock Option Committee Report".
The Company has agreed to indemnify each director against certain claims
and expenses for which the director might be held liable in connection with past
or future service on the Board. In addition, the Company maintains an insurance
policy insuring its officers and directors against such liabilities.
-6-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and to the other most highly paid executive officers
other than the Chief Executive Officer whose annual compensation exceeded
$100,000 (the "Named Executive Officers") for the fiscal years ended June 30,
1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------
ANNUAL COMPENSATION AWARDS(1)
------------------------------------------------- ----------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS/SARS (#) COMPENSATION($)
- --------------------------------- ---- ---------- --------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Sanjeev R. Chitre................ 1996 325,000 150,000 -- 87,500 --
Chairman of the Board and 1995 269,227 255,000 -- 980,000 3,061(2)
Chief Executive Officer 1994 148,403 75,000 -- 25,000 --
Don M. Jackson, Jr.(3)........... 1996 233,456 -- -- 28,125 2,581(2)
Executive Vice President 1995 184,522 57,500 -- 150,000 8,268(4)
1994 121,363 10,000 -- 10,000 5,000(2)
Thomas C. McKee.................. 1996 245,245 70,000 -- 40,625 --
President and Chief 1995 183,707 87,500 -- 120,000 --
Operating Officer 1994 118,369 23,678 -- --
John S. Hodgson.................. 1996 133,262 102,310 -- -- --
Vice President, Chief 1995 110,765 17,690 49,135(5) 110,000 --
Financial Officer, 1994 -- -- -- -- --
Secretary and Treasurer
_________________________
</TABLE>
(1) During the period covered by the table, the Company did not make any
restricted stock awards or have in effect (or make payments under) any
long term incentive plan other than the 1992 Plan, pursuant to which
only stock options, but no stock appreciation rights, were awarded.
After the period the Company repriced certain outstanding options held
by the persons named in the table. See "Compensation Committee and
Stock Option Committee Report".
(2) Represents the cost of life insurance premiums.
(3) Dr. Jackson ceased to be President and Chief Operating Officer of the
Company's subsidiary Athens Corp., now known as IPEC Clean, Inc.
("IPEC Clean") in September 1995, and ceased to be a director and
officer of the Company in January 1996.
(4) Represents $5,687 paid for life insurance premiums and $2,581 paid for
long-term disability insurance.
(5) Includes $46,260 paid for relocation expenses.
STOCK PLANS
The Company's 1992 Stock Option Plan (the "1992 Plan") permits the grant of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), nonstatutory stock options and
stock purchase rights. Only employees (including employees of any company in
which the Company owns directly or indirectly at least 50 percent of the voting
shares) may receive incentive stock options, while employees, paid consultants
and outside directors may receive nonstatutory options. At the 1995 Annual
Meeting of Stockholders, the Company's stockholders approved certain
-7-
<PAGE>
changes to the 1992 Plan, including an increase in the number of shares reserved
for issuance thereunder from 1,550,000 to 4,050,000 shares. As of June 30, 1996,
options to purchase 386,041 shares had been exercised, options to purchase
3,087,699 shares were outstanding at a weighted average exercise price of $23.33
per share, and 576,260 shares remained available for future grant under the 1992
Plan. During fiscal 1996 the Company granted options to purchase (i) 156,250
shares to executive officers (four persons) at a weighted average exercise price
of $31.00 per share, (ii) 150,000 shares to directors who were not executive
officers (two persons) at a weighted average exercise price of $26.00 per share,
and (iii) 342,533 shares to all employees and consultants (excluding executive
officers and directors) at a weighted average exercise price of $25.84 per
share. In April 1996 the Company offered all persons, excluding directors and
executive officers, the right to exchange outstanding options issued on or after
April 20, 1995 with an exercise price above $17.875 per share, for options with
an exercise price of $17.875 per share. After June 30, 1996 the Company granted
the holders of all options, including directors and executive officers, the
right to exchange outstanding options issued on or after April 20, 1995 with an
exercise price above $13.875 per share, for options with an exercise price of
$13.875 per share. See "Compensation Committee and Stock Option Committee
Report".
In fiscal 1994, the Company adopted the 1994 Employee Stock Purchase Plan
(the "1994 Purchase Plan") and reserved 1,000,000 shares for issuance
thereunder. As of June 30, 1996, 88,344 shares had been issued under the 1994
Purchase Plan. The 1994 Purchase Plan is administered by the Board of Directors
of the Company or by a committee appointed by the Board. Employees of the
Company or any majority owned subsidiary, including officers, are eligible to
participate if they are customarily employed by the Company for at least 20
hours per week. The 1994 Purchase Plan currently permits eligible employees to
purchase Common Stock through payroll deductions (which may not exceed the lower
of ten percent of an employee's base compensation or $25,000 per calendar year)
at a purchase price that is no less than 85% of the fair market value of the
Common Stock on the date of purchase. During fiscal 1996 executive officers
purchased 2,045 shares ($32,875) under the 1994 Purchase Plan.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 1996 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
GRANTED TO EXERCISE FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN OR BASE EXPIRATION --------------------------
NAME GRANTED(#)(1) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
- ----------------------------- -------------- ------------ ------------ ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sanjeev R. Chitre............ 87,500 13.49% 31.00 October 2005 244,962 1,966,764
Don M. Jackson, Jr........... 28,125 4.34% 31.00 October 2005 78,738 641,816
John S. Hodgson.............. -- -- -- -- -- --
Thomas C. McKee.............. 40,625 6.26% 31.00 October 2005 113,732 927,069
</TABLE>
____________________
(1) Excludes options granted after June 30, 1996 in connection with an
option repricing. See "Compensation Committee and Stock Option Committee
Report".
(2) The "Potential Realizable Value" shown represents the potential gains
based on annual compound stock price appreciation of 5% and 10% from the
date of grant through the full 10-year option term, net of exercise
price, but before taxes associated with exercise. The amounts represent
certain assumed rates of appreciation only, based on the Securities and
Exchange Commission rules. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common
-8-
<PAGE>
Stock, overall market conditions and the optionholders' continued
employment through the vesting period. The amounts reflected in this
table may not be achieved and do not reflect the Company's estimate of
future stock price growth.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table sets forth, for each of the Named Executive Officers,
stock options exercised during the fiscal year ended June 30, 1996 and the
fiscal year-end value of unexercised options:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END(1)(2)
ACQUIRED ON VALUE --------------------------- ---------------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE($) UNEXERCISABLE($)
- ----------------------------- ------------ ----------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sanjeev R. Chitre............ -- -- 632,500 460,000 1,678,800 705,000
Don M. Jackson, Jr........... 10,000 335,000 88,125 90,000 695,000 352,500
John S. Hodgson.............. -- -- 40,000 70,000 470,000 235,000
Thomas C. McKee.............. 20,000 620,000 60,625 80,000 235,000 235,000
</TABLE>
- -----------------------------
(1) Market value of underlying securities at June 30, 1996 less the exercise
price.
(2) Excludes a reduction in the exercise price of certain options effected
after June 30, 1996. See "Compensation Committee and Stock Option
Committee Report".
EMPLOYEE STOCK PURCHASE PLAN SUMMARY
The following table sets forth as of June 30, 1996, as to the Named
Executive Officers, all executive officers as a group and all employees
(excluding executive officers) as a group who participated in the 1994 Purchase
Plan: (i) the number of shares of the Company's Common Stock purchased under
the 1994 Purchase Plan during the last fiscal year; (ii) the dollar value of the
benefit based on market value on date of purchase less the purchase price, and
(iii) the amount of payroll deductions for future purchases accumulated through
June 30, 1996 for the current purchase period under the 1994 Purchase Plan,
which commenced March 16, 1996:
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR NO. OF SHARES DOLLAR CURRENT PERIOD
IDENTITY OF GROUP PURCHASED VALUE($) PAYROLL DEDUCTIONS ($)
- -------------------------------------- ------------- -------- ----------------------
<S> <C> <C> <C>
Sanjeev R. Chitre -- -- --
Don M. Jackson, Jr.................... 1,402 22,356 --
Thomas C. McKee....................... 643 10,519 --
John S. Hodgson....................... -- -- --
All current Executive Officers as a
group (4 persons).................... 2,045 32,875 --
All current employees, excluding
Executive Officers, as a group....... 63,863 1,026,248 931,900
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Company's acquisition of IPEC Planar Phoenix in
September 1993, the Company entered into (i) a consulting agreement with Mr.
Baldauf providing for payments of $150,000 annually for 10 years to Mr. Baldauf
and his two sons, and (ii) a Stockholders' Agreement with Mr. and Mrs. Baldauf,
-9-
<PAGE>
giving Mr. Baldauf the right (so long as the Baldauf family owns 50,000 or more
shares of the Company's Common Stock) to designate two directors to the
Company's Board of Directors (which Board shall not exceed seven directors). Mr.
Baldauf was elected and is nominated to the Company's Board of Directors as one
of Mr. Baldauf's designees. If the Company is in default of its obligations
under the Consulting Agreement, Mr. Baldauf would be entitled to designate one
director even if his family owned less than 50,000 shares of the Company's
Common Stock. In the acquisition, Mr. and Mrs. Baldauf received 245,548 shares
of Common Stock and an aggregate of 29,317 shares of Series B-1, B-2 and B-3
Preferred Stock.
During fiscal year ended June 30, 1996, the Company purchased approximately
$1.4 million of goods and services from Saginaw Control, approximately $1.0
million of goods and services from Southwest Automation, and approximately $5.5
million of goods and services from Motion Systems. Mr. Baldauf is Chairman of
Saginaw Control and Southwest Automation, and he and members of his family own
all of the outstanding capital stock of Saginaw Control and 50% of the
outstanding capital stock of Southwest Automation. Southwest Automation owns
60% of the equity of Motion Systems.
In October 1995 the Company granted options to purchase 231,250 shares of
Common Stock of the Company to its officers and directors. These options were
granted at the fair market value of the Common Stock on the date of grant
($31.00 per share) and vest over periods of up to four years, depending on the
individual grant amount. In January 1996, the Company granted an option to
purchase 75,000 shares of Common Stock of the Company to Mr. Freschi. This
option was granted at the fair market value of the Common Stock on the date of
grant ($21.00 per share) and vests over four years. In August 1996 the Company
offered its directors and executive officers the right to exchange outstanding
options issued on or after April 20, 1995 with an exercise price exceeding
$13.875 per share, for options with an exercise price of $13.875 per share. See
"Compensation Committee and Stock Option Committee Report".
In December 1995 the Company loaned Mr. Chitre $900,000, secured by Mr.
Chitre's Common Stock shares of the Company and by his options to purchase
Common Stock shares of the Company. The maturity date of the loan is the earlier
of (i) 90 days after Mr. Chitre's ability to sell Common Stock of the Company
without restriction under Section 16 of the Securities Exchange Act of 1934 or
under a lockup agreement, (ii) immediately on voluntary termination of
employment, (iii) 90 days after involuntary termination of employment for
"cause", or (iv) immediately on the sale of a personal residence. The interest
rate of the loan is the prime rate charged by the Company's primary commercial
bank to its corporate customers. The full $900,000, and accrued interest in the
amount of $37,652, were outstanding on June 30, 1996.
In August 1995 the Company guaranteed up to $400,000 of Dr. Jackson's debt
to Second National Bank of Saginaw. Dr. Jackson agreed to reimburse amounts paid
by the Company to the bank under the guarantee. Dr. Jackson reimbursement
obligation was secured by his equity securities of the Company. The maturity
date of the repayment is the earlier of (i) the Company's demand, at any time
after August 31, 1996, (ii) immediately on voluntary termination of employment,
(iii) immediately on involuntary termination of employment for "cause," or (iv)
90 days after the sale of a personal residence. The interest rate of such
repayment was 5.73%. On June 30, 1996 the bank loan was not yet due and the
Company had paid no amount under its guarantee. Dr. Jackson repaid the bank
loan in September 1996.
-10-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between the Company's Board of
Directors or the Compensation Committee and the board of directors or
compensation committee of any other company.
-11-
<PAGE>
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORT
The following report is provided to stockholders by the members of the
- ---------------------------------------------------------------------------
Compensation Committee and the Stock Option Committee of the Board of Directors.
- -------------------------------------------------------------------------------
Until October 1995 the members of the Compensation Committee and the Stock
- --------------------------------------------------------------------------
Option Committee during Fiscal 1996 were William J. Freschi and a former
- ------------------------------------------------------------------------
director, Michael R. Splinter. In October 1995, the members of the Compensation
- --------------------------------------------------------------------------------
Committee and the Stock Option Committee became Roger D. Emerick and Kenneth
- ----------------------------------------------------------------------------
Levy. Accordingly, this report is from Mr. Freschi as it relates to events
- ---------------------------------------------------------------------------
occurring prior to October 1995 and from Mr. Emerick and Mr. Levy as it relates
- -------------------------------------------------------------------------------
to events occurring after that date.
- ------------------------------------
Compensation Philosophy. The goals of the Company's executive compensation
-----------------------
program are to attract and retain executive officers who will strive for
excellence and to motivate those individuals to achieve superior performance by
providing them with rewards for assisting the Company in meeting revenue and
profitability targets. Compensation for the Company's Executive Officers
consist of base salary and potential cash bonus, as well as potential incentive
compensation through stock options. The Compensation Committee considers the
total current and potential long-term compensation of each Executive Officer in
establishing each element of compensation.
Cash-Based Compensation. Each fiscal year, the Compensation Committee
-----------------------
reviews and approves, with appropriate modifications, an annual base salary plan
for the Company's Executive Officers. This base salary plan is based on
industry and peer group surveys and performance judgments as to the past and
expected future contributions of the individual Executive Officers. The
Compensation Committee reviews and fixes the base salary of the Chief Executive
Officer based on similar competitive compensation data and the Committee's
assessment of his past performance and its expectation as to his future
contributions in leading the Company and positioning the Company for future
growth.
Certain officers who served in an executive capacity throughout the last
fiscal year, including the Chief Executive Officer, received a cash bonus for
such service. These bonuses ranged in amount from approximately 29% to
approximately 77% of base salary. In determining the bonus paid to each
officer, the Compensation Committee reviewed the performance of each of the
officers in their respective areas of accountability as compared to the
Company's operating plan, and each officer's respective contribution to the
Company's operating performance.
Stock Options. During each fiscal year, the Stock Option Committee
-------------
considers the desirability of granting to Executive Officers awards under the
Company's 1992 Stock Option Plan, which allows for the grant of long-term
incentives in the form of stock options. The Stock Option Committee believes
stock options grants encourage the achievement of superior results over time and
align employee and stockholder interests. In fixing the grants of stock options
to Executive Officers in the last fiscal year, the Committee reviewed the
recommended individual awards, taking into account the officer's scope of
responsibility and specific assignments, strategic and operational goals,
anticipated performance requirements and contributions of the officer, and the
number of options previously granted to the officer and the number of shares
subject to options that had vested and that would vest in the future. The stock
options granted to Executive Officers in the last fiscal year provide for
vesting over periods of up to five years depending upon the terms of individual
grants.
Repricing of Options. During fiscal 1996 the Stock Option Committee
--------------------
determined that the goals of the 1992 Stock Option Plan to provide equity
incentives for employees, executive officers and directors of the Company would
-12-
<PAGE>
not be achieved with significant number of options with exercise prices above
fair market value, and therefore that it was in the interests of the Company and
the stockholders to reprice those options.
In April 1996 the Company offered its employees, excluding officers and
directors, who were issued stock options on or after April 20, 1995 with an
exercise price exceeding $17.875 per share, the right to exchange outstanding
options for options covering an equal number of shares and having an exercise
price of $17.875 per share, which was the then-current value of the Company's
Common Stock. The next scheduled vesting for the options exchanged was deferred
by periods ranging from four months to one year. Approximately 83% of those who
were given the opportunity to reprice their options in exchange for deferred
vesting elected to participate.
In August 1996 the Company offered its optionees, including directors and
executive officers, who were issued stock options on or after April 20, 1995
with an exercise price exceeding $13.875 per share, the right to exchange their
outstanding options for options covering an equal number of shares with an
exercise price of $13.875 per share, which was the then-current fair market
value of the Company's Common Stock. The next scheduled vesting for those
options was deferred five to thirteen months for non-officer employees who did
not elect to participate to reprice their options in April 1996, and one month
for all other non-officer employees. The next scheduled vesting for directors
and executive officers was deferred five to thirteen months, except for Don M.
Jackson, Jr., who due to termination of his employment was not required to defer
his next scheduled vesting. Approximately 86% of those who were given the
opportunity to reprice their options in exchange for deferred vesting elected to
participate.
Respectfully submitted,
Roger D. Emerick
William J. Freschi
Kenneth Levy
-13-
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following Index shows a comparison of cumulative total stockholder
return (stock appreciation plus dividends, if any) for the Company's Common
Stock for the calendar quarters following August 13, 1992, the date of the
Company's initial public offering, through September 30, 1996, with the
cumulative total stockholder return for the Nasdaq Stock Market-U.S. Index and
the Hambrecht & Quist ("H&Q") Semiconductor Sector Index. The Company elected to
use the H&Q Semiconductor Sector Index for the fiscal year ending June 30, 1996,
instead of the H&Q Technology Index, which was used for the fiscal year ending
June 30, 1995. The Company is a supplier of systems used in the manufacturing of
semiconductors, and therefore, in the opinion of the Company, the H&Q
Semiconductor Sector Index provides a better basis for comparison of the
Company's Stock performance with the performance of a relevant industry segment,
relative to the much broader base of companies included in the H&Q Technology
Index. The cumulative total stockholder return for the Company's Common Stock in
the following index is compared also with the H&Q Technology Index. The graph
assumes the investment of $100 on August 13, 1992, and the reinvestment of all
dividends, if any. The performance shown is not necessarily indicative of future
performance.
COMPARISON OF 50-MONTH CUMULATIVE TOTAL RETURN*
AMONG INTEGRATED PROCESS EQUIPMENT CORP.,THE NASDAQ STOCK MARKET - U.S. INDEX,
THE H&Q SEMICONDUCTOR SECTOR INDEX AND THE H&Q TECHNOLOGY INDEX
<TABLE>
<CAPTION>
H&Q H&Q
CHART Integrated Process Technology Nasdaq Stock Semiconductor
DATES Equipment Corp. Index Market-U.S. Sector
----- ------------------ ---------- ------------ -------------
<S> <C> <C> <C> <C>
8/13/92 100 100 100 100
104.17 99.80 98.48 98.74
Sep-92 95.83 103.46 102.14 110.99
95.83 108.82 106.16 118.47
104.17 115.92 114.61 126.72
Dec-92 112.50 120.44 118.83 140.83
106.25 125.54 122.21 163.63
93.75 117.40 117.65 174.77
Mar-93 104.17 118.68 121.06 177.79
116.67 111.97 115.89 159.34
129.17 122.08 122.81 184.16
Jun-93 135.42 121.24 123.38 187.41
135.42 115.08 123.53 188.93
150.00 121.20 129.91 224.37
Sep-93 183.33 123.39 133.78 235.66
195.83 126.78 136.79 206.16
170.83 128.40 132.71 205.56
Dec-93 150.00 131.43 136.41 208.70
158.33 139.18 140.55 226.20
170.83 140.80 139.23 240.30
Mar-94 145.83 132.63 130.67 236.43
134.38 129.98 128.97 225.57
160.42 130.76 129.29 230.35
Jun-94 179.17 123.00 124.56 222.11
212.50 127.66 127.12 233.16
181.25 140.45 135.22 250.95
Sep-94 241.67 140.33 134.87 242.73
292.72 150.25 137.52 262.41
302.08 149.19 132.96 256.25
Dec-94 277.08 152.56 133.34 256.28
241.67 151.86 134.08 260.49
308.33 163.25 141.17 292.68
Mar-95 358.33 169.80 145.36 309.48
412.50 180.59 149.93 353.28
445.83 185.93 153.80 382.45
Jun-95 588.55 205.99 166.26 434.34
750.00 223.83 178.48 495.49
602.08 228.08 182.10 486.23
Sep-95 663.55 234.57 186.29 490.87
618.75 237.59 185.22 461.26
512.50 236.24 189.57 408.17
Dec-95 391.67 229.06 188.57 356.66
366.67 234.16 189.50 351.82
304.17 243.09 196.72 353.62
Mar-96 291.67 233.64 197.37 336.84
435.42 259.12 213.74 385.93
487.50 262.73 223.55 373.97
Jun-96 345.83 244.37 213.47 322.83
214.58 211.12 194.42 286.59
254.17 234.24 205.35 313.68
Sep-96 264.58 260.21 221.06 366.48
</TABLE>
____________________
* The total return on each of these investments assumes the reinvestment of
dividends, although dividends have never been paid on the Company's Common
Stock.
-14-
<PAGE>
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
auditors, to audit the financial statements of the Company for the 1997 fiscal
year, and recommends that the stockholders confirm such selection. In the event
of a negative vote, the Board of Directors will reconsider its selection.
In March 1996 the Company engaged KPMG Peat Marwick LLP as the Company's
independent auditors, replacing Richard A. Eisner & Company, LLP, who served in
that capacity during fiscal years 1994 and 1995. Richard A. Eisner & Company,
LLP's report on the financial statements of the Company for fiscal years 1994
and 1995 did not contain an adverse opinion or a disclaimer of opinion and was
not qualified as to uncertainty, audit scope, or accounting principles. There
were no disagreements between the Company and Richard A. Eisner & Company, LLP
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Richard A. Eisner & Company, LLP, would have caused it to
make a reference to the subject matter of the disagreements in connection with
its reports regarding the audits of fiscal years 1994 and 1995, or through March
1996. Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file certain reports regarding ownership of, and
transactions in, the Company's securities with the Securities and Exchange
Commission (the "SEC"). Such executive officers, directors and 10% stockholders
are also required by SEC rules to furnish the Company with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that during fiscal 1996 all the reporting persons complied with Section 16(a)
filing requirements except as follows: (i) Mr. Freschi filed a Form 4 in
February 1996 to report the exercise of warrants to purchase 6,250 shares of
Common Stock in May 1995, and (ii) Mr. Splinter filed a Form 4 in February 1996
to report the exercise of warrants to purchase 6,250 shares of Common Stock in
July 1995.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, the persons named in the
accompanying form of proxy will vote the shares represented by proxy as the
Board of Directors may recommend or as the proxy holders, acting in their sole
discretion, may determine.
-15-
<PAGE>
THE COMPANY WILL MAIL WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN
REQUEST A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
JUNE 30, 1996, INCLUDING, IF SO REQUESTED, THE FINANCIAL STATEMENTS, SCHEDULES
AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO: INVESTOR RELATIONS,
INTEGRATED PROCESS EQUIPMENT CORP., 911 BERN COURT, SAN JOSE, CALIFORNIA 95112.
THE BOARD OF DIRECTORS
Dated: October 28, 1996
-16-
<PAGE>
APPENDIX: FORM OF PROXY
-----------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
INTEGRATED PROCESS EQUIPMENT CORP.
1996 ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 21, 1996
The undersigned stockholder of INTEGRATED PROCESS EQUIPMENT CORP., a
Delaware corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated October 28, 1996, and of
the 1996 Annual Report to Stockholders, and hereby appoints Sanjeev R. Chitre
and John S. Hodgson, and each of them, proxies and attorneys-in-fact, with full
power to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 1996 Annual Meeting of Stockholders of
INTEGRATED PROCESS EQUIPMENT CORP. to be held on November 21, 1996 at 10:00
a.m., local time, at the Phoenix Airport Hilton located at 2435 South 47th
Street, Phoenix, Arizona 85034, and at any adjournments thereof, and to vote all
shares of Common Stock and of Class A Common Stock of INTEGRATED PROCESS
EQUIPMENT CORP. which the undersigned would be entitled to vote if then and
there personally present, on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES OF THE BOARD OF DIRECTORS, FOR
THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below [ ] WITHHOLD
(except as indicated.)
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE
LIST BELOW:
Sanjeev R. Chitre; Harold C. Baldauf; Roger D. Emerick;
William J. Freschi; Kenneth Levy; Roger D. McDaniel
A-1
<PAGE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR FISCAL 1997:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. TO TRANSACT SUCH OTHER BUSINESS, IN THEIR DISCRETION, AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
EITHER OF SUCH ATTORNEYS OR SUBSTITUTES SHALL HAVE AND MAY EXERCISE ALL OF THE
POWERS OF SAID ATTORNEYS-IN-FACT HEREUNDER.
Dated: _______________________, 1996
____________________________________
Signature
____________________________________
Signature
(This Proxy should be marked, dated and signed by the stockholder(s) exactly as
his, her or its name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign.)
A-2
