<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
PIXTECH, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PIXTECH, INC.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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>
PIXTECH, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1997 Annual Meeting of Stockholders of PixTech, Inc. will be held at
the Holiday Inn, Copenhagen Suite, 2 Bridge Place, in London, United Kingdom at
2 p.m. on Friday, April 18, 1997 for the following purposes:
1. To elect two directors to hold office for a term of three years and
until their respective successors are elected and qualified.
2. To amend the Company's 1993 Stock Option Plan to increase the number
of shares available under such Plan from 1,856,372 shares to 2,656,372
shares.
3. To transact such other business as may be in furtherance of or
incidental to the foregoing or as may otherwise properly come before
the meeting.
Only stockholders of record at the close of business on March 3, 1997 will
be entitled to vote at the meeting or any adjournment thereof. A list of such
stockholders will be open for examination by any stockholder for any purpose
germane to the meeting for ten days before the meeting during ordinary business
hours at the offices of Palmer & Dodge LLP, One Beacon Street, Boston,
Massachusetts 02108.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE YOUR PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY
WILL NOT BE USED.
By order of the Board of Directors,
MICHAEL LYTTON, Secretary
Dated: March 24, 1997
<PAGE>
PIXTECH, INC.
AVENUE OLIVIER PERROY, ZONE INDUSTRIELLE DE ROUSSET
13790 ROUSSET FRANCE
TELEPHONE 011 33 (0)442 29 1000
_______________
PROXY STATEMENT
_______________
The enclosed proxy is solicited on behalf of the Board of Directors of
PixTech, Inc. (the "Company") for use at the 1997 Annual Meeting of Stockholders
to be held on Friday, April 18, 1997, and at any adjournments thereof. The
approximate date on which this proxy statement and accompanying proxy are first
being sent or given to security holders is March 24, 1997.
The principal business expected to be transacted at the meeting, as more
fully described below, will be the election of two directors and the amendment
of the Company's 1993 Stock Option Plan.
The authority granted by an executed proxy may be revoked at any time
before its exercise by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or by voting in person
at the meeting. Shares represented by valid proxies will be voted in accordance
with the specifications in the proxies. If no specifications are made, the
proxies will be voted to elect the directors nominated by the Board of Directors
and to approve the other proposals listed in the notice on the cover page of
this proxy statement.
The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. In addition to the use of
mails, proxies may be solicited by officers and employees of the Company in
person or by telephone.
VOTING SECURITIES AND VOTES REQUIRED
Only stockholders of record at the close of business on March 3, 1997 will
be entitled to vote at the meeting. On that date, the Company had outstanding
13,716,032 shares of Common Stock, $0.01 par value (the "Common Stock"), each of
which is entitled to one vote. A majority in interest of the outstanding Common
Stock, represented at the meeting in person or by proxy, constitutes a quorum
for the transaction of business. A plurality of the votes cast is required to
elect the nominees for director. A majority of the votes cast is required to
approve the proposal amendment to the Company's 1993 Stock Option Plan. Broker
non-votes are counted for the purpose of determining the presence or absence of
a quorum for the transaction of business, but will not be counted in determining
the shares entitled to vote on a particular matter nor treated as votes cast.
(A "broker non-vote" occurs when a registered broker holding a customer's shares
in the name of the broker has not received voting instructions on the matter
from the customer, is barred by applicable rules from exercising discretionary
voting authority in the matter, and so indicates on the proxy.) Abstentions
will not be treated as votes cast in the election of directors or for the
amendment to the 1993 Stock Option Plan.
<PAGE>
ELECTION OF DIRECTORS
The number of directors is fixed at five for the coming year and is divided
into three classes with the members of each class holding office for a three
year term. At the meeting, two directors will be elected to hold office for
three years and until their successors are elected and qualified. John A.
Hawkins and Pierre-Michel Piccino, who are presently serving as directors, have
been nominated for re-election by the Board of Directors. Unless a properly
signed and returned proxy withholds authority to vote for one or more of the
nominees or is a broker non-vote, the shares represented by such proxy will be
voted for the election of the Board's nominees as directors. If either nominee
is unable to serve, which is not expected, the shares represented by a properly
signed and returned proxy will be voted for such other candidate as may be
nominated by the Board of Directors.
The following table contains certain information about the nominees for
director and each other person whose term of office as a director will continue
after the meeting.
<TABLE>
<CAPTION>
DIRECTOR PRESENT
NAME AND AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE TERM EXPIRES
------------ ------------------------------------------- ----- ------------
<S> <C> <C> <C>
Jean-Luc Grand-Clement Jean-Luc Grand-Clement, a co-founder of the 1992 1998
Age: 57 Company, has served as Chairman of the Board
of Directors, Chief Executive Officer and
President since the Company's inception in
1992. Prior to founding the Company, Mr.
Grand-Clement co-founded European Silicon
Structures ("ES2"), a European applications
specific integrated circuit supplier for
cell based and full custom CMOS products,
and served as Chief Executive Officer and
then as Chairman of the Board of Directors
of ES2 from its founding in 1985 until 1991.
From 1967 to 1978 and from 1982 to 1985, Mr.
Grand-Clement held various positions with
Motorola, Inc., most recently as Vice-
President and Assistant General Manager of
the Motorola European Semiconductor Group
from 1983 to 1985. From 1978 to 1982, Mr.
Grand-Clement was the Managing Director of
Eurotechnique, a MOS semiconductor design
and fabrication joint venture between
National Semiconductor and Saint-Gobain. Mr.
Grand-Clement graduated from Ecole Nationale
Superieure des Telecommunications in Paris.
Jean-Pierre Noblanc Jean-Pierre Noblanc became a director of 1995 1999
Age: 58 the Company in May 1995. From 1994 to 1996,
Mr. Noblanc was Chairman of the Supervisory
Board of SGS Thomson Microelectronics N.V.,
a manufacturer of electronics components of
which he is currently vice-chairman. Since
July 1994, Mr. Noblanc has also been a
director of Thomson S.A., a significant
shareholder of SGS Thomson. Mr. Noblanc has
also served as General Manager of the
Components Sector of CEA-Industrie since
1994. Prior to joining CEA Industrie, Mr.
Noblanc served at CNET, the Research Center
of France Telecom, as Director of the
Applied Research Center of Bagneux and of
the Microelectronics Center of Grenoble,
successively. Mr. Noblanc holds a degree in
engineering from the Ecole Superieure
d'Electricite and a doctoral degree from the
University of Paris. Mr. Noblanc is an
Associate Member of the Committee on
Applications of the French Academy of
Sciences.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR PRESENT
NAME AND AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE TERM EXPIRES
------------ ------------------------------------------- ----- ------------
<S> <C> <C> <C>
Pierre-Michel Piccino * Pierre-Michel Piccino has been a director of 1994 1997
Age: 52 the Company since May 1994. In 1987, Mr.
Piccino joined Baring Venture Partners, an
international venture capital company, where
he is a Senior Partner. He is also presently
the Chairman of the Supervisory Board of
Gemplus Card International SCA, a smart card
manufacturer. From 1974 to 1987, Mr. Piccino
worked with Du Pont de Nemours
International, where he held various
positions in sales, marketing and general
management, most recently as manager of the
Europe and Middle-East Packaging Division.
From 1972 to 1974, Mr. Piccino also worked
for the Batelle Research Institute in
Geneva. Mr. Piccino graduated from Ecole
Polytechnique in Lausanne, Switzerland with
a degree in mechanical engineering.
William C. Schmidt William C. Schmidt has been a director of 1992 1998
Age: 41 the Company since 1992. Since 1988, Mr.
Schmidt has been an investment partner at
Advent International, an international
venture capital company, where he also
manages the activities of Advent
International's corporate investment
programs in Europe. From 1981 to 1987, Mr.
Schmidt worked as a management consultant at
Bain & Company in Europe and the United
States. Mr. Schmidt holds degrees from
Williams College and Harvard Business
School.
John A. Hawkins * John A. Hawkins has been a director of the 1994 1997
Age: 37 Company since 1994. Since August, 1995, Mr.
Hawkins has been a founding partner of
Generation Capital Partners, L.P., a newly
organized private investment partnership.
From 1992 until August, 1995, Mr. Hawkins
was a general partner of various funds
affiliated with Burr, Egan, Deleage & Co. He
was an associate at Burr, Egan, Deleage &
Co. from 1987 to 1992, prior to which he was
an associate with Alex. Brown & Sons
Incorporated. Mr. Hawkins is a director of P-
Com, Inc., a telecommunications company. Mr.
Hawkins holds degrees from Harvard College
and Harvard Business School.
</TABLE>
- ------------------------
* Nominee for election as director
<PAGE>
COMMITTEES OF THE BOARD
The Audit Committee, which consists of Messrs. Noblanc and Schmidt, is
responsible for providing the Board of Directors with an independent review of
the financial health of the Company and its financial controls and reporting.
Its primary functions are to recommend independent auditors to the Board of
Directors, review the results of the annual audit and the auditors' reports, and
ensure the adequacy of the Company's financial controls and procedures. The
Audit Committee met five times in 1996. The Compensation Committee, whose
members are Messrs. Piccino and Hawkins, acts for the Board of Directors with
respect to the Company's compensation practices and their implementation. It
sets and implements the compensation of the Company's officers and administers
the Amended and Restated 1993 Stock Option Plan and the 1995 Employee Stock
Purchase Plan. The Compensation Committee held one meeting in 1996. The entire
Board of Directors functions as a nominating committee, considering nominations
submitted by the Chairman of the Board. The Board of Directors held seven
meetings during 1996, and each director attended at least 75% of all meetings of
the Board and of all committees of the Board on which he served.
DIRECTOR COMPENSATION
Director Fees
Non-employee directors are reimbursed for expenses incurred in attending
meetings, and they also receive $1,500 for each meeting of the Board of
Directors that they attend, plus an additional $4,000 if they attend at least
four meetings in a year. Such payments may not exceed a total of $10,000 in any
one year. Mr. Grand-Clement, the only director who is an employee of the
Company, does not receive additional compensation for his service as a director.
1995 Director Stock Option Plan
The 1995 Director Stock Option Plan (the "Director Plan") provides that
each director who is not an employee of the Company and who is elected or re-
elected into office following the Annual Meeting of Stockholders receives an
automatic grant of options to purchase 6,000 shares of Common Stock. The
options become exercisable in increments of 2,000 shares as follows: 2,000
shares on the grant date, and an additional 2,000 shares at each of the
following two Annual Meetings of Stockholders so long as the director remains in
office. The options expire ten years from the grant date. The exercise price
of each option is the fair market value of the Common Stock on the day
immediately preceding the grant date.
The Director Plan authorizes the grant of stock options to purchase up to
a maximum of 50,000 shares (subject to adjustment in the event of a stock split
or other recapitalization) of Common Stock. Messrs. Noblanc, Piccino, Schmidt
and Hawkins are currently eligible to participate under the Director Plan. At
the 1996 Annual Meeting of Stockholders, Mr. Noblanc was granted an option to
purchase 6,000 shares of Common Stock of the Company, at an exercise price of
$8.625 per share. The next grant of options under the Director Plan will be on
the date of the 1997 Annual Meeting of Stockholders.
Options granted under the Director Plan are not intended to qualify as
incentive stock options under the Internal Revenue Code. The exercise of an
option under the Director Plan results in ordinary income to the director and a
corresponding deduction for the Company, in each case equal to the difference
between the option price and the fair market value of the shares on the date of
exercise.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE (1)
The following table provides summary information on the cash compensation
and certain other compensation paid, awarded, or accrued by the Company and
its subsidiaries to or for the Chief Executive Officer of the Company and each
of the Company's other executive officers whose total salary and bonus
exceeded $100,000 during 1996 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Jean-Luc Grand-Clement 1996 $212,502 -- 40,000
Chairman of the Board, Chief 1995 181,639 $100,000 212,893
Executive Officer, and President 1994 139,479 22,853 70,967
Francis Courreges 1996 172,053 -- 20,000
Executive Vice President 1995 165,007 20,082 54,307
1994 140,495 -- 10,000
Michel Garcia 1996 107,045 -- 15,000
Vice President, 1995 100,577 10,041 13,333
Industrial Partners 1994 86,458 -- 3,333
Tom Holzel 1996 122,500 -- 10,000
Vice President, 1995 60,000 -- 70,000
Marketing & Sales
Philippe Oudot (2) 1996 119,841 -- 3,000
Vice President 1995 134,717 14,057 26,667
of Operations 1994 110,901 -- 73,334
Richard Rodriguez 1996 104,275 -- 120,000
Executive Vice President,
Chief Operating Officer
</TABLE>
(1) All dollar amounts (except for amounts paid to Mr. Holzel) reflect the
conversion of French francs to U.S. dollars at an average conversion rate
of 5.538, 4.9796 and 5.1147 French francs to the U.S. dollar for 1994,
1995 and 1996, respectively.
(2) Mr. Oudot left the Company in November 1996.
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on stock options granted during
1996 to the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES POTENTIAL REALIZED VALUE AT
UNDERLYING % OF TOTAL OPTIONS EXERCISE ASSUMED ANNUAL RATES OF
OPTION GRANTED TO PRICE EXPIRATION STOCK PRICE APPRECIATION FOR
NAME GRANTED(#) EMPLOYEES IN 1996 ($/SHARE) DATE OPTION TERMS ($) (1)
---- ---------- ------------------ -------- ---- --------------------------
5% 10%
------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jean-Luc Grand-Clement 40,000 (2) 11% 7.83 05/10/2006 199,902 503,829
Francis Courreges 20,000 (2) 5% 7.83 05/10/2006 99,951 251,914
Michel Garcia 15,000 (2) 4% 7.83 05/10/2006 74,963 188,936
Tom Holzel 10,000 (2) 3% 7.83 05/10/2006 49,975 125,957
Philippe Oudot 3,000 (2) 1% 7.83 05/10/2006 14,993 37,787
Richard Rodriguez 120,000 (2) 33% 8.54 04/04/2006 636,673 1,620,817
</TABLE>
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% appreciation rates set by the Securities and Exchange
Commission of a value for the Common Stock equal to the market price of the
Common Stock on the date of grant of the option. These amounts are not
intended to forecast possible future appreciation, if any, in the price of
the Common Stock.
(2) These options become exercisable as to 25% of the shares on each of the
four anniversaries of the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END STOCK OPTION VALUES
The following table sets forth certain information concerning the
unexercised stock options as of December 31, 1996 held by the Named Executive
Officers. No options were exercised during fiscal year 1996 by any Named
Executive Officer other than Mr. Oudot.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/96(#) AT 12/31/96($)(1)
-------------------------- --------------------------
SHARES ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jean-Luc Grand-Clement -- -- 286,442 300,019 1,002,547 830,232
Francis Courreges -- -- 74,027 79,197 259,095 187,209
Michel Garcia -- -- 96,106 29,999 336,371 47,497
Tom Holzel -- -- 35,000 45,000 -- --
Philippe Oudot 25,556 9,711 27,778 -- 97,223 --
Richard Rodriguez -- -- -- 120,000 -- --
</TABLE>
(1) Based on the difference between the respective option exercise price and
the closing market price of the Common Stock on December 31, 1996, which
was $3 7/8
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENTS
Each of Messrs. Grand-Clement, Courreges, Garcia and Rodriguez have entered
into employment agreements with the Company in substantially the same form as
all other employees of the Company. The material terms of the employment
agreements provide for employment by each individual for an indefinite period.
Pursuant to the employment agreements, each individual agrees to non-competition
and non-solicitation provisions which survive for a one-year period following
termination of employment. The employment agreements also contain obligations of
each employee concerning confidentiality and assignment of inventions and
intellectual property to the Company.
French law provides that even indefinite term employment contracts may not
be terminated without "serious cause", including inadequate performance or
elimination of a position due to economic difficulties or technological changes.
In addition, French law imposes procedural requirements for any termination,
including, in most cases, written notice and meetings with the employee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee Report describes the compensation policies
applicable to executive officers of the Company, including Mr. Grand-Clement,
the Company's Chief Executive Officer.
Overall Policy. The Company's executive compensation program is designed
to be closely linked to corporate performance and returns to stockholders. To
this end, the Company has developed an overall compensation strategy and
specific compensation plan that tie a portion of executive compensation to the
Company's success in meeting specified performance goals. In addition, through
the use of stock options, the Company ensures that a part of the executives'
compensation is closely tied to appreciation in the Company's stock price. The
overall objectives of this strategy are to attract and retain the best possible
executive talent, to motivate these executives to achieve the goals inherent in
the Company's business strategy, to link executive and stockholder interests
through equity based plans and, finally, to provide a compensation package that
recognizes individual contributions as well as overall business results.
The Compensation Committee determines the compensation of the seven most
highly compensated corporate executives, including the Named Executive Officers.
The Compensation Committee takes into account the views of Mr. Grand-Clement,
the Company's chief executive officer, in reviewing the individual performance
of these executives (other than Mr. Grand-Clement).
The key elements of the Company's executive compensation consist of base
salary, annual bonus and stock options. The Compensation Committee's policies
with respect to each of these elements, including the bases for the compensation
awarded to Mr. Grand-Clement, are discussed below. In addition, while the
elements of compensation described below are considered separately, the
Compensation Committee takes into account the full compensation package afforded
by the Company to the individual, including insurance and other employee
benefits.
Base Salaries. Base salaries for executive officers are initially
determined by evaluating the responsibilities of the position held and the
experience of the individual. In making determinations regarding base salaries,
the Compensation Committee considers generally available information regarding
salaries prevailing in the industry, but does not utilize any particular indices
or peer groups.
Annual salary adjustments are determined by evaluating the financial
performance of the Company and of each executive officer, and also take into
account new responsibilities. The Compensation Committee, where appropriate,
also considers non-financial performance measures. These non-financial
performance measures may include such factors as efficiency gains, quality
improvements and improvements in relations with customers, suppliers and
employees. No particular weighting is given to any of these financial or non-
financial factors.
<PAGE>
The determination of Mr. Grand-Clement's base salary for 1996 was based on
the overall successful development of the Company and in particular on his
ability to conclude R&D and manufacturing partnership agreements. Mr. Grand-
Clement was granted a base salary of $212,502 for 1996, an increase of 16% over
his $181,639 base salary for 1995. Mr. Grand-Clement's salary is mostly
calculated and paid in French Francs, however, and after taking out the effect
of the rise of the french franc against the US dollar in 1996, Mr. Grand-
Clement's base salary increased by 19% in 1996 over 1995. No bonus was awarded
to Mr. Grand-Clement in 1996.
Annual Bonus. The Company's executive officers are eligible for an annual
cash bonus, based primarily on achievement of the Company's overall performance.
No bonuses were awarded to the executive officers for the year ended December
31, 1996.
Stock Options. Stock options are granted to the Company's executive
officers under the Company's 1993 Stock Option Plan. Stock options are designed
to align the interests of executives with those of the stockholders. Stock
options are granted with an exercise price equal to the fair market value of the
Common Stock on the date of grant and vest over various periods of time,
normally four years. Stock option grants are designed to encourage the creation
of stockholder value over the long term since the full benefit of the
compensation package cannot be realized unless stock price appreciation is
achieved, and, once achieved, is maintained and improved upon. In determining
the amount of such grants, the Compensation Committee evaluates the job level of
the executive, responsibilities to be assumed in the upcoming year, and
responsibilities in prior years, and also takes in account the size of the
officer's awards in the past. Based on these factors and on the level of his
existing stock ownership in 1996, Mr. Grand-Clement received options to purchase
40,000 shares with an exercise price of $7.83 per share, representing fair
market value of the Common Stock of Company in May 1996.
Policy on deductibility of Compensation. The Internal Revenue Service has
adopted a provision limiting the income tax deduction of public companies for
certain compensation paid in a year to any executive officer named in the proxy
statement compensation tables in excess of one million dollars. No such officer
of the Company received applicable compensation at that level in 1996. At such
time as it becomes likely that applicable compensation for a covered executive
will exceed the deductibility limit, the Compensation Committee will consider
adoption of a policy in this regard.
Conclusion. Through the programs described above, a very significant
portion of the Company's executive compensation is linked directly to individual
and corporate performance and stock appreciation. In 1996, as in previous
years, a substantial portion of the Company's targeted executive compensation
consists of performance-based variable elements. The Compensation Committee
intends to continue the policy of linking executives compensation to Company
performance and returns to stockholders, recognizing that the ups and downs of
the business cycle from time to time may result in an imbalance for a particular
period.
By the Compensation Committee,
John Hawkins,
Pierre-Michel Piccino
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph shows the cumulative total stockholder return on the
Company's Common Stock over the period beginning July 18, 1995, when the
Company's Common Stock began trading publicly, and ending December 31, 1996, as
compared with that of the Nasdaq Market Index and an Industry Index, based on an
initial investment of $100 in each. Total stockholder return is measured by
dividing share price change plus dividends, if any, for each period by the share
price at the beginning of the respective period, and assumes reinvestment of
dividends. The Electronic Components, N.E.C. Index consists of 55 publicly
traded electronic components companies reporting under the same Standard
Industrial Classification Code (SIC 3679) as the Company.
[GRAPH APPEARS HERE]
- --------------------------------------------------------------------------------
7/31/1995 12/29/1995 12/31/1996
- --------------------------------------------------------------------------------
PIXTECH, INC. 100 127.87 50.82
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS, N.E.C. INDEX 100 94.75 112.20
- --------------------------------------------------------------------------------
NASDAQ MARKET INDEX 100 102.74 124.21
- --------------------------------------------------------------------------------
<PAGE>
PROPOSAL TO AMEND THE 1993 STOCK OPTION PLAN
1993 STOCK OPTION PLAN
GENERAL
The Company's Amended and Restated 1993 Stock Option Plan (the "Option
Plan") was readopted by the Board of Directors on May 9, 1995 and by the
stockholders on May 19, 1995. The purpose of the Option Plan is to attract and
retain key employees and consultants of the Company and its affiliates. The
Option Plan provides for the grant of incentive and nonstatutory stock options
(the "Options") to employees and consultants of the Company and its affiliates
("Eligible Persons").
Currently, Options may be granted under the Option Plan for up to a total
of 1,856,372 shares of Common Stock (subject to adjustment for stock splits and
similar capital changes) to employees of the Company and, in the case of
nonstatutory Options, to consultants (other than French consultants, pursuant to
French tax law) of the Company or any Affiliate (as defined in the Option Plan)
capable of contributing to the Company's performance.
As of March 3, 1997, approximately 138 employees were eligible to participate
in the Option Plan and options to purchase an aggregate of 1,703,266 shares of
Common Stock had been granted. Of these, Options to purchase 125,650 shares had
been canceled, 145,429 had been exercised and options to purchase 1,432,187
shares remained outstanding, leaving 278,756 shares available for new Options
under the Option Plan.
ADMINISTRATION AND ELIGIBILITY
Awards are made by the Compensation Committee which has been designated by
the Board of Directors to administer the Option Plan. The Compensation
Committee may delegate to one or more officers the power to make awards under
the Option Plan to persons other than officers of the Company who are subject to
the reporting requirements of Section 16 of the Securities Exchange Act of 1934
(the "Exchange Act").
Options under the Option Plan are granted at the discretion of the
Compensation Committee which determines the recipients and establishes the terms
and conditions of each award, including the exercise price, the form of payment
of the exercise price, the number of shares subject to Options and the time at
which such Options become exercisable. However, the exercise price of any
incentive stock option granted under the Option Plan may not be less than the
fair market value of the Common Stock on the date of grant and the exercise
price of any nonstatutory stock option may not be less than 50% of the fair
market value of the Common Stock on the date of grant.
PROPOSED AMENDMENT TO THE OPTION PLAN
The Board of Directors has voted, subject in each case to the approval of the
stockholders, to increase the aggregate number of shares of Common Stock that
may be subject to grants under the Option Plan by 800,000, from 1,856,372 to
2,656,372, subject to adjustment for stock splits, stock dividends and certain
transactions affecting the Company's capital stock. The Company believes that
this increase is necessary and appropriate for the following reason :
. It remains the policy of the Company to grant stock options to all
employees, not just executive officers. The Company believes that this policy
is a critical factor in its ability to attract and retain qualified employees.
. Since May 1995, the last time the stockholders approved an increase in the
number of shares of Common Stock available under the Option Plan, the number
of people employed by the Company has grown by 77%.
<PAGE>
. The Company has also granted special stock options to its executive officers
that are tied specifically to the Company's performance or to the Company's
achievement of specified milestones. In the past, these milestones have
included successful addition of a member to the FED Alliance and successful
completion of financing round, all of which are increasing shareholders'
value. It is the policy of the Company to continue to do so in the future.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES RELATING TO STOCK OPTIONS
The following is a description of the tax consequences relating to stock
options under United States tax law. Individuals subject to taxation in any
other country should consult their own tax advisors regarding the tax
consequences relating to the exercise of stock options and the sale of shares
acquired upon the exercise of such options.
Incentive Stock Options. An optionee does not realize taxable income upon the
grant or exercise of an incentive stock option ("ISO") under the Option Plan.
If no disposition of shares issued to an optionee pursuant to the exercise of
an ISO is made by the optionee within two years from the date of grant or within
one year from the date of exercise, then (a) upon sale of such shares, any
amount realized in excess of the option price (the amount paid for the shares)
is taxed to the optionee as long-term capital gain and any loss sustained will
be a long-term capital loss and (b) no deduction is allowed to the Company for
Federal income tax purposes. The exercise of ISOs gives rise to an adjustment
in computing alternative minimum taxable income that may result in alternative
minimum tax liability for the optionee.
If shares of Common Stock acquired upon the exercise of an ISO are disposed of
prior to the expiration of the two-year or one-year holding periods described
above (a "disqualifying disposition") then (a) the optionee realizes ordinary
income in the year of disposition in an amount equal to the excess (if any) of
the fair market value of the shares at exercise (or, if less, the amount
realized on a sale of such shares) over the option price thereof and (b) the
Company is entitled to deduct such amount. Any further gain realized is taxed
as a short-term or long-term capital gain and does not result in any deduction
to the Company. A disqualifying disposition in the year of exercise will
generally avoid the alternative minimum tax consequences of the exercise of an
ISO.
Nonstatutory Stock Options. No income is realized by the optionee at the time
a nonstatutory option is granted. Upon exercise, (a) ordinary income is
realized by the optionee in an amount equal to the difference between the option
price and the fair market value of the shares on the date of exercise and (b)
the Company receives a tax deduction for the same amount. Upon disposition of
the shares, appreciation or depreciation after the date of exercise is treated
as a short-term or long-term capital gain or loss and will not result in any
deduction by the Company.
VOTES REQUIRED
The affirmative vote of the holders of a majority in interest of the Common
Stock present, or represented, and entitled to vote at the meeting is required
to approve the proposed amendment to the Option Plan. Broker non-votes will not
be counted as present or represented for this purpose. Abstentions will be
counted as present and entitled to vote and, accordingly, will have the effect
of a negative vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
===
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1996, the Company's Compensation
Committee consisted of Messrs. Piccino and Hawkins. None of the members of the
Compensation Committee has been an officer or employee of the Company.
Mr. Noblanc, a member of the Company's Board of Directors and its Audit
Committee, is an officer of CEA Industrie, S.A., which is controlled by CEA, the
French atomic agency. In September 1992, the Company licensed its fundamental
technology from the LETI, a research laboratory of the CEA, pursuant to an
exclusive, worldwide, royalty-bearing license agreement with CEA (the "LETI
License Agreement"), which has a term of twenty years. The LETI License
Agreement was amended in July 1993 and March 1994. Beginning in 1996, the
Company became obligated under the LETI License Agreement to make royalty
payments to the LETI based on the sales of products incorporating licensed
technology. In addition to such royalty payments, the Company must pass through
to CEA a percentage of any lump sum sublicense fees earned after 1993 and
royalties on sales of licensed products by the Company's sublicenses. An amount
of $45 payable to CEA in 1997 was accrued in 1996, this amount including
royalties obligations under the license agreement.
The Company also entered into a research and development agreement with CEA
("the "LETI Research Agreement") in 1992, under which the Company funds research
at the LETI. Pursuant to the LETI Research Agreement, the Company paid CEA
$35,871 in 1992, $1,334,734 in 1993, $1,506,130 in 1994, and $1,338,789 in 1995
including purchases of certain equipment from CEA. In 1996, the Company made
payments of $643,957 to the CEA pursuant to the LETI Research Agreement.
<PAGE>
SHARE OWNERSHIP
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of March 3, 1997 by (i) persons known by the
Company to be beneficial owners of more than 5% of its Common Stock, (ii) the
executive officers named in the Summary Compensation Table, (iii) the directors
and nominees for election as directors of the Company, and (iv) all current
executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)
----------------------------------
BENEFICIAL OWNER SHARES PERCENT OF CLASS
- ---------------- -------------- ----------------
<S> <C> <C>
Fidelity International Limited..................................... 1,167,000 (2) 8.5%
82 Devonshire Street
Boston, MA 02109-3614
United Microelectronics Corp....................................... 1,111,111 8.1
2F, NO. 76 SEC 2, Tunhwa S. RD.,
Taipei, Taiwan, R.O.C.
Entities affiliated with
Mercury Asset Management......................................... 963,500 (3) 7.0
33 King William Street
London, EC4R 9AS
BVP Nominees Limited............................................... 956,646 6.9
Barfield House
St. Julian Avenue
St. Peter Port
Guernsey
Motorola, Inc...................................................... 927,416 (4) 6.5
1303 E. Algonquin Road
Schaumburg, Illinois 60196
CEA Industrie...................................................... 793,656 5.8
31-33 rue de la Federation
75752 Paris Cedex 15 France
Innolion S.A....................................................... 720,000 5.3
142, Avenue de Malakoff
75116 Paris France
Jean-Luc Grand-Clement............................................. 458,154 (5) 3.2
Michel Garcia...................................................... 107,200 (6) *
Francis Courreges.................................................. 91,604 (7) *
Tom Holzel......................................................... 40,000 (8) *
Richard Rodriguez.................................................. 30,000 (9) *
Jean-Pierre Noblanc................................................ 4,000 (10) *
Pierre-Michel Piccino.............................................. 2,000 (11) *
John A. Hawkins.................................................... 2,000 (12) *
William C. Schmidt................................................. -- (13) --
All directors and executive officers
as a group (10 persons).......................................... 745,332 (14) 5.2
</TABLE>
- ----------------------------
* Less than one percent.
(1) Except as otherwise indicated in these footnotes, the persons and entities
named in the table have sole voting and investment power with respect to all
shares beneficially owned by them. Share ownership information includes
shares of Common Stock issuable pursuant to outstanding options which may be
exercised within 60 days after March 7, 1997.
(2) Consists of 1,167,000 shares held by Fidelity International Limited ("FIL").
FIL is held by the shareholders of FMR, a holding company one of whose
principal assets is the capital stock of a wholly-owned subsidiary,
"Fidelity". Information herein regarding FIL is as of February 18, 1997
based on its Schedule 13 D filed with the Company.
<PAGE>
(3) Consists of 963,500 shares held by Mercury Asset Management plc. Mercury
has neither voting power nor the right to receive dividends from, or
proceeds from the sale of any portofolio investments. Information herein
regarding Mercury is as of February 5, 1997 based on its Schedule 13 D
filed with the Company.
(4) Includes warrants to purchase 463,708 shares of Common Stock, which
warrants are exercisable as of March 31, 1997 or within 60 days thereafter.
(5) Includes 53,605 shares held by Mr. Grand-Clement's wife and 353,443 shares
of Common Stock subject to options exercisable as of March 3, 1997 or
within 60 days thereafter, of which 2,134 shares are subject to options
held by Mr. Grand-Clement's wife.
(6) Includes 99,439 shares of Common Stock subject to options exercisable as of
March 3, 1997 or within 60 days thereafter.
(7) Includes 87,604 shares of Common Stock subject to options exercisable as of
March 3, 1997 or within 60 days thereafter.
(8) Includes 35,000 shares of Common Stock subject to options exercisable as of
March 3, 1997 or within 60 days thereafter.
(9) Consists of 30,000 shares of Common Stock subject to options exercisable as
of March 3, 1997 or within 60 days thereafter.
(10) Consists of 4,000 shares of Common Stock subject to an option exercisable
as of March 3, 1997 or within 60 days thereafter. Mr. Noblanc, a director
of the Company, is an officer of CEA Industrie, and disclaims beneficial
ownership of all shares held by CEA Industrie.
(11) Consists of an option which will be granted upon Mr. Piccino's re-election
to the Company's Board of Directors and which will be exercisable for 2,000
shares of Common Stock as of the date of grant. Mr. Piccino, a director of
the Company, is a Partner of Baring Venture Partners, the management
Advisor of BVP Nominees Limited, and disclaims beneficial ownership of all
shares held by BVP Nominees Limited except to the extent of his
proportionate pecuniary interests therein.
(12) Consists of an option which will be granted upon Mr. Hawkins' re-election
to the Company's Board of Directors and which will be exercisable for 2,000
shares of Common Stock as of the date of grant. Mr. John A. Hawkins, a
director of the Company, is a limited partner of Alta V Limited Partnership
and disclaims beneficial ownership of all 572,916 shares held by Alta V
Limited Partnership and Customs House Partners, except to the extent of his
proportionate pecuniary interests therein.
(13) Mr. Schmidt, a director of the Company, is a Vice President of Eventech
Limited and of Advent International Corporation. Mr. Schmidt disclaims
beneficial ownership of all 675,945 shares held by the funds affiliated
with Advent International Corporation, except for 80 Shares which he
beneficially owns as a partner in Advent International Investors Limited
Patnership and 192 Shares which he beneficially owns as a partner in Advent
International Investors II L.P..
(14) Excludes shares, as to which beneficial ownership is disclaimed, described
in footnotes (10)-(13). Includes 622,153 shares of Common Stock subject to
options exercisable as of March 3, 1997 or within 60 days thereafter.
<PAGE>
SECURITIES EXCHANGE ACT REPORTING
The Company's executive officers and directors are required under Section
16(a) of the Exchange Act to file reports of ownership of Company securities and
changes in ownership with the Securities and Exchange Commission. Copies of
those reports must also be furnished to the Company.
Based solely on a review of the copies of reports furnished to the Company
and written representations that no other reports were required, the Company
believes that during 1996 the executive officers and directors of the Company
complied with all applicable Section 16(a) filing requirements, except that Mr.
Courreges, an executive officer of the Company, reported in a Form 5 filed on
February 12, 1997 the sale of 1,500 shares of Common Stock, for which a Form 4
was due on April 10, 1996, and Mr. Rodriguez, an executive officer of the
Company, reported in a Form 5 filed on February 12, 1997 the ownership of a
stock option to purchase 120,000 shares of the Company's Common Stock, for which
a Form 3 was due on April 15, 1996.
INFORMATION CONCERNING AUDITORS
The firm of Ernst & Young L.L.P. independent accountants, has audited the
Company's accounts since the inception of the Company and will do so for 1997.
Representatives of Ernst & Young, L.L.P. have been invited to attend the Annual
Meeting.
STOCKHOLDER PROPOSALS
The Company's Bylaws require a stockholder who wishes to bring business before
or propose director nominations at an annual meeting to give written notice to
the Secretary of the Company not less than 45 days nor more than 60 days before
the meeting, unless less than 60 days' notice or public disclosure of the
meeting is given, in which case the stockholder's notice must be received within
15 days after such notice or disclosure is given. The notice must contain
specified information about the proposed business or nominee and the stockholder
making the proposal or nomination. If any stockholder intends to present a
proposal at the 1998 Annual Meeting of stockholders and desires that it be
considered for inclusion in the Company's proxy statement and form of proxy, it
must be received by the Company at Avenue Olivier Perroy, Zone Industrielle de
Rousset, 13790 Rousset, France; Attention: Yves Morel, no later than December
19, 1997.
OTHER MATTERS
The Board of Directors does not know of any business to come before the
meeting other than the matters described in the notice. If other business is
properly presented for consideration at the meeting, the enclosed proxy
authorizes the persons named therein to vote the shares in their discretion.
IN ADDITION TO THE COMPANY'S ANNUAL REPORT, WHICH HAS BEEN MAILED TO
STOCKHOLDERS, ANY HOLDER OR BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK MAY
OBTAIN A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDING DECEMBER 31,
1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WRITTEN REQUESTS
FOR COPIES OF THE COMPANY'S FORM 10-K SHOULD BE ADDRESSED TO YVES MOREL,
DIRECTOR OF FINANCE AND ADMINISTRATION, AVENUE OLIVIER PERROY, ZONE INDUSTRIELLE
DE ROUSSET, 13790 ROUSSET, FRANCE.
