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)240.1.4a-11(c) or (S)240.1.4a-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 1998 Annual Meeting of Stockholders of PixTech, Inc. will be held at the
Grand Hyatt, Park Avenue, Grand Central, in New York, New York, at 3 p.m. on
Wednesday, March 25, 1998 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 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 February 23, 1998 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: February 24, 1998
<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 1998 Annual Meeting of Stockholders to be
held on Wednesday, March 25, 1998, 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 February 26, 1998.
The principal business expected to be transacted at the meeting, as more fully
described below, will be the election of two directors.
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 February 23, 1998 will
be entitled to vote at the meeting. On that date, the Company had outstanding
13,762,732 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. 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.
<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. Jean Luc
Grand-Clement and William C. Schmidt, 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>
Present
Director Term
Name and Age Business Experience and Other Directorships Since Expires
<S> <C> <C> <C>
Jean-Luc Jean-Luc Grand-Clement, a co-founder of the 1992 1998
Grand-Clement * Company, has served as Chairman of the Board of
Age: 58 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 the 1995 1999
Age: 59 Company in May 1995. From 1994 to 1997, 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. 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>
Present
Director Term
Name and Age Business Experience and Other Directorships Since Expires
<S> <C> <C> <C>
Pierre-Michel Pierre-Michel Piccino has been a director of the 1994 2000
Piccino Company since May 1994. In 1987, Mr. Piccino
Age: 53 joined Baring Private Equity Partners, an
international private capital company, where he is
a Senior Partner. 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. William C. Schmidt has been a director of the 1992 1998
Schmidt * Company since 1992. Since 1988, Mr. Schmidt has
Age: 42 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 Company 1994 2000
Age: 37 since 1994. Since August, 1995, Mr. Hawkins has
been a founding partner of Generation Capital
Partners, L.P., a 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 1997. The Compensation Committee, whose
members in 1997 were 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 two meetings
in 1997. The entire Board of Directors functions as a nominating committee,
considering nominations submitted by the Chairman of the Board. The Board of
Directors held eight meetings during 1997, 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
1997 Annual Meeting of Stockholders, Messrs. Piccino and Hawkins were both
granted an option to purchase 6,000 shares of Common Stock of the Company, at an
exercise price of $3.91 per share. The next grant of options under the Director
Plan will be on the date of the 1998 Annual Meeting of Stockholders.
Options granted under the Director Plan are not intended to qualify as incentive
stock options under the Internal Revenue Code. The exercise of an option under
the Director Plan results in ordinary income to the director and a corresponding
deduction for the Company, in each case equal to the difference between the
option price and the fair market value of the shares on the date of exercise.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table (1)
The following table provides summary information on the cash compensation and
certain other compensation paid, awarded, or accrued by the Company and its
subsidiaries to or for the Chief Executive Officer of the Company and each of
the Company's other four most highly compensated executive officers for 1997
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
=======================================================================================================================
Long-Term
Compensation
Annual Compensation Awards
Securities
Underlying
Name and Principal Position Year Salary($) Bonus($) Options(#)
=======================================================================================================================
<S> <C> <C> <C> <C>
Jean-Luc Grand-Clement 1997 $193,708 -- 165,000
- -----------------------------------------------------------------------------------------------------------------------
Chairman of the Board, Chief 1996 212,502 -- 40,000 (2)
- -----------------------------------------------------------------------------------------------------------------------
Executive Officer, and President 1995 181,639 $100,000 212,893
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
Richard Rodriguez 1997 137,137 -- 172,000
- -----------------------------------------------------------------------------------------------------------------------
Executive Vice President, 1996 104,275 -- 120,000 (2)
- -----------------------------------------------------------------------------------------------------------------------
Chief Operating Officer
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
Francis G. Courreges 1997 150,850 -- 77,000
- -----------------------------------------------------------------------------------------------------------------------
Executive Vice President 1996 172,053 -- 20,000 (2)
- -----------------------------------------------------------------------------------------------------------------------
1995 165,007 20,082 54,307
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
Michel Garcia 1997 102,852 -- 56,000
- -----------------------------------------------------------------------------------------------------------------------
Vice President, 1996 107,045 -- 15,000 (2)
- -----------------------------------------------------------------------------------------------------------------------
Industrial Partners 1995 100,577 10,041 13,333
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
Tom M. Holzel 1997 122,500 -- 85,000
- -----------------------------------------------------------------------------------------------------------------------
Vice President, 1996 122,500 -- 10,000 (2)
- -----------------------------------------------------------------------------------------------------------------------
Marketing & Sales 1995 60,000 -- 70,000 (2)
=======================================================================================================================
</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
4.9796, 5.1147 and 5.8336 French francs to U.S. dollars for 1995, 1996 and 1997
respectively.
(2) All of these options have been terminated unexercised as of February 21,
2007.
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table provides information on stock options granted during 1997 to
the Named Executive Officers. In addition, during 1997, certain stock options
were terminated unexercised as described under "Summary Compensation Table"
above.
<TABLE>
<CAPTION>
=======================================================================================================================
Number of % of Total Potential Realized Value
Securities Options at Assumed Annual
Underlying Granted to Exercise Rates of Stock Price
Options Employees Price Expiration Appreciation for Option
Name Granted (#) in 1997 ($ / share) Date Term ($) (1)
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
5% 10%
=======================================================================================================================
Jean-Luc Grand-Clement 40,000(2) 4% 5.58 02/21/2007 140,369 355,723
- -----------------------------------------------------------------------------------------------------------------------
35,000(5) 3% 5.58 02/21/2007 122,823 311,258
- -----------------------------------------------------------------------------------------------------------------------
90,000(6) 8% 3.125 10/28/2007 176,877 448,240
- -----------------------------------------------------------------------------------------------------------------------
165,000 15% 440,069 1,115,221
=======================================================================================================================
Richard Rodriguez 120,000(3) 11% 5.58 02/21/2007 421,108 1,067,170
- -----------------------------------------------------------------------------------------------------------------------
10,000(5) 1% 5.58 02/21/2007 35,092 88,931
- -----------------------------------------------------------------------------------------------------------------------
42,000(6) 4% 3.125 10/28/2007 82,542 209,179
- -----------------------------------------------------------------------------------------------------------------------
172,000 15% 538,743 1,365,279
=======================================================================================================================
Francis G. Courreges 20,000(2) 2% 5.58 02/21/2007 70,185 177,862
- -----------------------------------------------------------------------------------------------------------------------
20,000(5) 2% 5.58 02/21/2007 70,185 177,862
- -----------------------------------------------------------------------------------------------------------------------
37,000(6) 3% 3.125 10/28/2007 72,716 184,276
- -----------------------------------------------------------------------------------------------------------------------
77,000 7% 213,085 540,000
=======================================================================================================================
Michel Garcia 15,000(2) 1% 5.58 02/21/2007 52,638 133,396
- -----------------------------------------------------------------------------------------------------------------------
10,000(5) 1% 5.58 02/21/2007 35,092 88,931
- -----------------------------------------------------------------------------------------------------------------------
31,000(6) 3% 3.125 10/28/2007 60,924 154,394
- -----------------------------------------------------------------------------------------------------------------------
56,000 5% 148,655 376,721
=======================================================================================================================
Tom M. Holzel 80,000(4) 7% 5.58 02/21/2007 280,739 711,447
- -----------------------------------------------------------------------------------------------------------------------
5,000(5) 1% 5.58 02/21/2007 17,546 44,465
- -----------------------------------------------------------------------------------------------------------------------
85,000 8% 298,285 755,912
=======================================================================================================================
</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 May 21, 1997,
1998, 1999 and 2000.
(3) These options become exercisable as to 25% of the shares on April 21, 1997,
1998, 1999 and 2000.
(4) These options become exercisable as follows: 35,000 shares on February 21,
1997, 20,000 shares on July 21, 1997, 2,500 shares on May 21, 1998, 17,500
shares on July 21, 1998, 2,500 shares on May 21, 1999 and 2,500 shares on May
21, 2000.
(5) These options become exercisable as to 25% of the shares on each of the four
anniversaries of the date of grant.
(6) These options may be exercised at any time after October 28, 2002. Should
the French social security laws enforced since January 1997 be amended so that
the Company would no longer have to support the payment of the Company's social
security contribution or other similar taxes, these options might become
exercisable as to 25% of the shares on October 28, 1997, and on each of October
1 of each of 1998, 1999 and 2000. Exercisability may be accelerated if certain
levels of sales and profitability are reached by the Company.
<PAGE>
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, 1997 held by the Named Executive Officers. No
options were exercised during fiscal year 1997 by any Named Executive Officer.
<TABLE>
<CAPTION>
=======================================================================================================================
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at 12/31/97(#) at 12/31/97($)(1)
=======================================================================================================================
Name Exercisable Unexercisable Exercisable Unexercisable
=======================================================================================================================
<S> <C> <C> <C> <C>
Jean-Luc Grand-Clement 432,274 279,187 778,238 200,695
- -----------------------------------------------------------------------------------------------------------------------
Richard Rodriguez 30,000 142,000 -- --
- -----------------------------------------------------------------------------------------------------------------------
Francis G. Courreges 108,680 101,654 190,698 47,272
- -----------------------------------------------------------------------------------------------------------------------
Michel Garcia 107,356 59,749 198,237 12,030
- -----------------------------------------------------------------------------------------------------------------------
Tom M. Holzel 55,000 30,000 -- --
=======================================================================================================================
</TABLE>
(1) Based on the difference between the respective option exercise price and the
closing market price of the Common Stock on December 31, 1997, which was 25/16.
Executive Employment Agreements
Each of Messrs. Grand-Clement, Rodriguez, Courreges and Garcia 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.
<PAGE>
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, as well as the programs described below.
Base Salaries. Base salaries for new 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 weight is
given to any of these financial or non-financial factors.
The determination of Mr. Grand-Clement's base salary for 1997 was based on the
overall successful development of the Company and in particular on his ability
to produce research & development and manufacturing partnership agreements. Mr.
Grand-Clement was granted a base salary of $193,708 for 1997, a decrease of 9%
over his $212,502 base salary for 1996. 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 US dollar against the french franc in 1997, Mr.
Grand-Clement's base salary was unchanged in 1997 as compared to 1996. No bonus
was awarded to Mr. Grand-Clement in 1997.
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,
1997.
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
1997, Mr. Grand-Clement received options to purchase 75,000 and 90,000 shares
with an exercise price of respectively $5.58 and $3.125 per share, representing
fair market value of the Common Stock of the Company on February 21,1997 and
October 28, 1997, respectively. In addition, 40,000 options owned by Mr.
Grand-Clement were terminated unexercised in February 1997.
<PAGE>
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 1997. At such
time as it becomes likely that the applicable compensation for a covered
executive will exceed the deductibility limit, the Compensation Committee will
consider the 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 1997, 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, 1997, 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.
Comparison of cumulative Total Return of
PixTech, Inc., Electronic Components, N.E.C. Index and NASDAQ Market Index
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
=======================================================================================================================
7/37/1995 12/29/1995 12/31/1996 12/31/1997
=======================================================================================================================
<S> <C> <C> <C> <C>
PixTech, Inc. 100 127.87 50.82 30.31
- -----------------------------------------------------------------------------------------------------------------------
Electronic Components, NEC Index 100 84.37 145.86 152.92
- -----------------------------------------------------------------------------------------------------------------------
NASDAQ Market Index 100 105.65 129.94 159.45
=======================================================================================================================
</TABLE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1997, 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 the
Commissariat a l'Energie Atomique ("CEA"), the French atomic agency. In
September 1992, the Company licensed its fundamental technology from the
Laboratoire d'Electronique, de Technologie et d'Instrumentation ("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,
March 1994 and October 1997. 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. Pursuant to an amendment to the LETI
License Agreement signed in October 1997 (the 1997 CEA Amendment"), the royalty
rates and minimum payments from the Company to CEA were increased for a period
of three years. An amount of $109,000 was accrued in 1997, which included the
minimum royalty obligation of $100,000 paid pursuant to the 1997 CEA Amendment.
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 expensed
$35,871 in 1992, $1,334,734 in 1993, $1,506,130 in 1994, $1,338,789 in 1995
including purchases of certain equipment from CEA, and $643,957 in 1996. In
1997, the Company recorded $637,224 as expenses 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 February 10, 1998 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:
================================================================================
Shares of Common Stock
Beneficially Owned (1)
Beneficial Owner Shares Percent of Class
================================================================================
Fidelity International Limited 1,177,000 (2) 8.6%
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
================================================================================
Cavendish Nominees Limited 956,646 7.0%
Barfield House
St. Julian Avenue
St. Peter Port
Guernsey
================================================================================
Motorola, Inc. 927,416 (4) 6.5%
1303 E. Algonquin Road
Schaumburg, Illinois 60196
================================================================================
Entities affiliated with
Mercury Asset Management 847,000 (3) 6.1%
33 King William Street
London, EC4R 9AS
================================================================================
CEA Industrie 793,656 5.8%
31-33 rue de la Federation
75752 Paris Cedex 15 France
================================================================================
FINNO S.A 689,281 5.0%
142, Avenue de Malakoff
75116 Paris France
================================================================================
Jean-Luc Grand-Clement 624,359 (5) 4.4%
================================================================================
Francis G. Courreges 131,257 (6) *
================================================================================
Michel Garcia 120,951 (7) *
================================================================================
Richard Rodriguez 32,500 (8) *
================================================================================
Tom M. Holzel 61,250 (9) *
================================================================================
Pierre-Michel Piccino 4,000 (10) *
================================================================================
John A. Hawkins 4,000 (11) *
================================================================================
William C. Schmidt 2,000 (12) *
================================================================================
Jean-Pierre Noblanc -- --
================================================================================
All directors and executive officers
as a group (11 persons) 1,011,775 (13) 6.9%
================================================================================
* 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 February 10, 1998.
<PAGE>
(2) Consists of 1,177,000 shares held by Fidelity International Limited
("FIL"). FIL is held by the shareholders of FMR, a holding company whose
principal assets is the capital stock of a wholly-owned subsidiary,
Fidelity. Information herein regarding FIL is as of February 18, 1998.
(3) Consists of 847,000 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 20, 1998.
(4) Includes warrants to purchase 463,708 shares of Common Stock, which
warrants were exercisable on March 31, 1997.
(5) Includes 53,605 shares held by Mr. Grand-Clement's wife and 499,648 shares
of Common Stock subject to options exercisable as of February 10, 1998 or
within 60 days thereafter, of which 5,401 shares are subject to options
held by Mr. Grand-Clement's wife.
(6) Includes 127,257 shares of Common Stock subject to options exercisable as
of February 10, 1998 or within 60 days thereafter.
(7) Includes 113,190 shares of Common Stock subject to options exercisable as
of February 10, 1998 or within 60 days thereafter.
(8) Consists of 32,500 shares of Common Stock subject to options exercisable as
of February 10, 1998 or within 60 days thereafter.
(9) Includes 56,250 shares of Common Stock subject to options exercisable as of
February 10, 1998 or within 60 days thereafter.
(10) Consists of 4,000 shares of Common Stock subject to an option exercisable
as of February 10, 1998 or within 60 days thereafter. Mr. Piccino, a
director of the Company, is a Partner of Baring Private Equity Partners,
the management Advisor of Cavendish Nominees Limited, and disclaims
beneficial ownership of all shares held by Cavendish Nominees Limited
except to the extent of his proportionate pecuniary interests therein.
(11) Consists of 4,000 shares of Common Stock subject to an option exercisable
as of February 10, 1998 or within 60 days thereafter. 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.
(12) Consists of an option which will be granted upon Mr. Schmidt'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. 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 limited partner in Advent International Investors
II L.P..
(13) Excludes shares, as to which beneficial ownership is disclaimed, described
in footnotes (10)-(12). Includes 868,596 shares of Common Stock subject to
options exercisable as of February 10, 1998 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 1997 the executive officers and directors of the Company
complied with all applicable Section 16(a) filing requirements, except that Mr.
Louart, an executive Officer of the Company, reported in a Form 5 filed in
February 1998, Form 3 holdings.
INFORMATION CONCERNING AUDITORS
The firm of Ernst & Young L.L.P., independent auditors, has audited the
Company's accounts since the inception of the Company and will do so for 1998.
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 1999 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, Chief Financial Officer,
no later than December 19, 1998.
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,
1997, 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, CHIEF
FINANCIAL OFFICER, AVENUE OLIVIER PERROY, ZONE INDUSTRIELLE DE ROUSSET, 13790
ROUSSET, FRANCE.
<PAGE>
Front of Card:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PIXTECH, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MARCH 25, 1998
The undersigned stockholder of Pixtech, Inc. (the "Company") hereby
appoints Jean-Luc Grand-Clement, Yves Morel, Michael Lytton, and Lynette C.
Fallon, and each of them acting singly, the attorneys and proxies of the
undersigned, with full power of substitution, to vote on behalf of the
undersigned all the shares of capital stock of the company entitled to vote at
the Annual meeting of Stockholders of the Company to be held on March 25, 1998,
and at all adjournments thereof, hereby revoking any proxy heretofore given with
respect to such shares.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
Back of Card:
A [X] Please mark your
votes as in this
example.
WITHHELD
FOR from both
both nominees nominees Nominees: William C. Schmidt
[ ] [ ] Jean-Luc Grand-Clement
1. Proposal to elect directors
FOR, except vote withheld from the following nominee:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDERS. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1. IN THEIR DISCRETION, THE PROXIES ARE AT SO
AUTHORIZED TO VOTE UPON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Signature Date 1998
Signature Date 1998
(IF HELD JOINTLY)
NOTE: Please sign exactly as name appears on stock certificates. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partner, please sign in partnership.
