SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[_]CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X]Preliminary Proxy Statement RULE 14A-6(E)(2))
[_]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)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
---------------------------------------------------------------------------
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
---------------------------------------------------------------------------
is calculated and state how it was determined):
- ------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
PIXTECH, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
The 2000 Special Meeting of Stockholders of PixTech, Inc. will be held at
the offices of Palmer & Dodge LLP, One Beacon Street, in Boston, Massachusetts,
at 10 a.m. on Tuesday, January 18, 2000 for the following purposes:
1. To amend the Restated Certificate of Incorporation of the
Company to increase the authorized shares of capital stock of the
Company from 61,000,000 shares to 101,000,000 shares.
2. To approve the issuance of up to 9,320,359 shares of the Company's
Common Stock to United Microelectronics Corporation.
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 December 20, 1999
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: December ___, 1999
<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 2000 Special Meeting of
Stockholders to be held at the offices of Palmer & Dodge LLP, One Beacon Street,
in Boston, Massachusetts, at 10 a.m. on Tuesday, January 18, 2000, 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 December
28, 1999.
The principal business expected to be transacted at the meeting, as more
fully described below, will be to increase the number of shares authorized under
the Company's Restated Certificate of Incorporation and to approve the issuance
of Common Stock to United Microelectronics Corporation ("UMC").
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 amend the Company's Restated Certificate of
Incorporation and to authorize the issuance of Common Stock to UMC.
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.
Page 1
<PAGE>
VOTING SECURITIES AND VOTES REQUIRED
Only stockholders of record at the close of business on December 20, 1999
will be entitled to vote at the meeting. On that date, the Company had
[36,044,284] shares of Common Stock, $0.01 par value (the "Common Stock")
outstanding, each of which is entitled to one vote. In addition, the Company
had [297,269] shares of Series E Preferred Stock, $0.01 par value (the "Series E
Stock") outstanding, each of which is entitled to the number of votes equal to
the number of whole shares of Common Stock which the shares of Series E
Preferred Stock are convertible into as of the record date. As of December 20,
1999, the record date for the 2000 Special Meeting, the Series E Stock would
have been convertible into [4,441,294] shares of Common Stock. A majority in
interest of the outstanding Common Stock and shares convertible into Common
Stock entitled to vote, represented at the meeting in person or by proxy,
constitutes a quorum for the transaction of business. 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. The amendment to the
Restated Certificate of Incorporation requires approval from a majority of the
Common Stock and shares convertible into Common Stock outstanding. In voting on
amending the Restated Certificate of Incorporation, abstentions and broker
non-votes will have the effect of votes against approval of the amendment. The
issuance of the shares to UMC requires approval from a majority of the total
votes cast in person or by proxy. In voting on the issuance of shares to UMC,
abstentions and broker non-votes will not affect the outcome of this matter.
Page 2
<PAGE>
AMENDMENT OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK
Currently the Company's Restated Certificate of Incorporation authorizes
the issuance of 60,000,000 shares of Common Stock, par value $.01 per share, and
of 1,000,000 shares of Preferred Stock, par value $.01 per share. On October
27, 1999, the Company's Board of Directors approved, and recommended for
adoption by the stockholders at the meeting, a proposed amendment to the
Company's Restated Certificate of Incorporation which would, if approved by the
stockholders, effect an increase in the number of authorized shares of Common
Stock of the Company from 60,000,000 shares to 100,000,000 shares, $.01 par
value per share, resulting in the aggregate number of authorized shares of
capital stock of the Company to be increased from 61,000,000 shares to
101,000,000 shares.
As of the close of business on December 20, 1999, [37,037,283] shares of
Common Stock were issued and outstanding, leaving [22,962,717] shares of Common
Stock authorized but unissued. Of the authorized but unissued shares, the
Company has currently reserved [4,851,449] shares under the Company's 1993 Stock
Option Plan, 100,000 shares under the Company's 1995 Employee Stock Purchase
Plan, 50,000 shares under the Company's 1995 Director Stock Option Plan and
582,500 shares following the exercise of warrants. As of the close of business
on December 20, 1999, the Company had outstanding the following convertible
securities and equity arrangements:
- - SERIES E PREFERRED STOCK. As of the close of business on December 20, 1999,
297,269 shares of Series E Stock were outstanding. The Company has agreed
with the holders of the Series E Stock to reserve, out of the authorized
but unissued shares, 150% of the number of shares of Common Stock into
which the Series E Stock is convertible. The Series E Stock is generally
convertible into Common Stock at a rate equal to the lesser of (a)
$1.60938, and (b) the average closing price of the Common Stock over the
ten trading day period ending on the day immediately preceding the day upon
conversion. In addition, if the Company issues shares of Common Stock at a
price less than $1.60938 per share, the limit in clause (a) above will be
reduced to the price at which the new shares are issued. The Series E Stock
was sold to certain purchasers on December 22, 1998 at a price per share of
$22.5313. As of December 20, 1999, the Series E Stock would have been
convertible into [4,459,735] shares of Common Stock, thus requiring the
Company to reserve [6,689,603] shares of the remaining authorized but
unissued shares.
- - $5 MILLION CONVERTIBLE NOTE. The Company issued a $5 million convertible
note to Sumitomo Corporation in 1997. This note is convertible into shares
of Common Stock at a conversion price equal to 80% of the market price on
the conversion date. As of December 20, 1999, [$0.7 million] of the
convertible note had been converted into [450,000 shares] of Common Stock
and the remaining [$4.3 million] would have been convertible into
[2,917,116] shares of Common Stock of the Company.
Page 3
<PAGE>
- - EQUITY LINE AGREEMENT. The Company has reserved 15,909,091 shares of Common
Stock to be issued to Kingsbridge Capital Limited pursuant to an equity
line agreement. Pursuant to the equity line agreement, the Company may
sell, from time to time, up to $15 million worth of Common Stock to
Kingsbridge. The price at which the Common Stock will be issued to
Kingsbridge will be 88-90% of the consecutive five-day average market price
of Common Stock ending on the date the shares are issued, depending on
certain factors. The Company must sell a minimum of $5 million, and a
maximum of $15 million, worth of Common Stock to Kingsbridge. The rate at
which the Company may sell shares of Common Stock to Kingsbridge varies
depending on the price and trading volume of the Common Stock. Generally,
the greater the volume and market price, the greater the rate at which the
Company may sell shares of Common Stock to Kingsbridge. The Company may not
issue shares of Common Stock to Kingsbridge unless the market price of the
Common Stock is at least $1.00. As of December 20, 1999, [$1 million] worth
of Common Stock has been issued to Kingsbridge.
Therefore, on December 20, 1999, out of the 60,000,000 authorized shares of
Common Stock, no shares were available for issuance by the Company. Moreover,
[8,137,041] additional shares of authorized common stock would be required in
order to satisfy the Company's obligations under the benefits plans and
financing agreements described above.
The Company has received limited waivers from certain investors with
respect to the number of shares that it is required to keep reserved under the
various arrangements described above, so that the Company is not currently in
breach of any of its agreements, by-laws or Restated Certificate of
Incorporation.
Page 4
<PAGE>
The following table set forth certain information regarding the potential
dilutive effect of the Company's existing financing arrangements, stock option
plans and warrants agreements as of December 20, 1999. The number of shares of
Common Stock that the Company would be required to issue pursuant to existing
financing arrangements was computed using the closing market price as of
December 20, 1999, which was $1.938, and a stock price of $1 and $4.14,
representing a range of conversion prices for the Company's Common Stock based
upon the high and low stock prices during the past twelve months as reported by
the Nasdaq National Market, plus and minus a 25% margin, respectively. As of
December 20, 1999, the Company had 37,037,283 shares of Common Stock
outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK
ISSUABLE AS OF NUMBER OF SHARES OF
DECEMBER 20, 1999 COMMON STOCK ISSUABLE AS OF
BASED ON THE DECEMBER 20, 1999
MARKET PRICE AS PERCENT OF ASSUMING A ASSUMING A
OF DECEMBER 20, COMMON MARKET PRICE MARKET PRICE
1999 STOCK OF $1 OF $4.14
<S> <C> <C> <C> <C> <C>
Series E Preferred Stock Conversion 4,459,735 11% (1) 7,167,079 4,459,735
Sumitomo Convertible Loan 2,917,116 7% (2) 5,429,219 1,311,405
Kingsbridge Equity Line 8,209,025 18% (3) 15,909,091 3,842,776
1993 Stock Option Plan 3,923,850 10% 3,923,850 3,923,850
1995 Employee Stock Purchase Plan -- * -- --
Directors Stock Option Plan 22,000 * 22,000 22,000
Warrants 582,500 2% 582,500 582,500
--------------- ------------ ------------
Total additional shares 20,114,226 35% 33,033,739 14,142,266
<FN>
* Less than one percent.
(1) As of December 20, 1999, 297,269 shares of Series E Stock were outstanding.
As of December 20, 1999, these Series E Stock, including accrued dividends,
would have been convertible into [4,459,735] shares of Common Stock. The
Series E Stock is convertible into Common Stock at a rate equal to the
lesser of (a) $1.60938, and (b) the average closing price of the Common
Stock over the ten trading day period ending on the day immediately
preceding the day upon conversion. In addition, the holders of Series E
Preferred Stock are entitled to receive cumulative dividends. Dividends are
calculated on a 6% interest basis per annum on the purchase price paid for
the Series E Preferred shares for the numbers of days that the stock price
is above $2.253, on an 8% interest basis for the numbers of days that the
stock price is between $1.127 and $2.253, and on a 10% interest basis for
the numbers of days that the stock price is below $1.127. There is no
ceiling regarding the number of shares to be issued upon the conversion of
Series E Stock; unless the Company were to issue shares of its Common Stock
at less than $1.60938 per share, the minimum number of shares of Common
Stock issuable upon conversion of the Series E Stock is [4,459,735] shares.
Page 5
<PAGE>
(2) The Company issued a $5 million convertible note in 1997 to Sumitomo. This
loan is convertible into shares of Common Stock of the Company at a
conversion price equal to 80% of the market price on the conversion date.
As of December 20, 1999, [$0.7 million] of the convertible note had been
converted into [450,000] shares of Common Stock, and the remaining [$4.3
million] would have been convertible into [2,917,116] shares of Common
Stock of the Company. There is no floor or ceiling to the number of common
shares that could be issued upon the conversion of the Sumitomo convertible
loan.
(3) Under the terms of Kingsbridge equity line agreement, PixTech has the
irrevocable right, subject to certain conditions, to draw up to [$15
million] cash in exchange for PixTech's common stock, in increments over a
two-year period. In November 1999, the Company drew [$1 million] cash in
exchange for the issuance of [624,809] shares of its common stock. As of
December 20, 1999, the remaining [$14 million] commitment under the
Kingsbridge equity line agreement would correspond to the issuance of
[8,209,025] shares based on a [$1.938] market price. The Company's ability
to raise capital through the Kingsbridge equity line agreement is subject
to the satisfaction of certain conditions at the time of each sale of
common stock to Kingsbridge, including a minimum common stock price of $1.
Consequently, there is a maximum of [15,909,091] additional shares to be
issued pursuant to the Kingsbridge equity line agreement and no minimum
number of shares issuable to Kingsbridge
</TABLE>
The Series E Stock and the note held by Sumitomo are convertible into
Common Stock at, and the shares to be issued to Kingsbridge pursuant to the
equity line agreement are issuable at, a floating rate designed to provide a
discount to the then-prevailing market price of the Common Stock. The discount
requires the Company to issue a greater number of shares as the market price of
the Common Stock falls. As a result, the issuance of the shares will have a
dilutive impact on the Company's current stockholders and could have an
immediate adverse effect on the market price of the Common Stock. Moreover, the
Company's net income or loss per share could be materially decreased in future
periods, and the market price of the Common Stock could be further depressed.
All of the shares of Common Stock to be issued to the holders of Series E Stock,
Sumitomo and Kingsbridge will be available for immediate resale in the public
market and these resales, or the prospect of resales, could have an additional
adverse effect on the market price of Common Stock, making subsequent issuances
under these agreements even more dilutive.
The Board of Directors of the Company believes that the adoption of the
proposed amendment to the Company's Restated Certificate of Incorporation
increasing the authorized shares of Common Stock is advisable and in the best
interests of the Company and its stockholders. The Company is currently
negotiating an equity financing to issue 9,320,359 shares of the Company's
Common Stock to UMC at a price of $1.61 per share. In order to issue such
number of shares, the Company's Restated Certificate of Incorporation must be
amended to increase the number of authorized shares of capital stock of the
Company. Stockholder approval of the proposed amendment to the Company's
Restated Certificate of Incorporation is a condition to UMC's obligation to
purchase the shares. Increasing the number of authorized shares of Common Stock
Page 6
<PAGE>
is also necessary for the Company to comply with its obligations to reserve
specified quantities of Common Stock under the equity arrangements and benefits
plans described above. In addition, the adoption of the proposed amendment
would increase the flexibility of the Company to issue Common Stock and would
ensure that an adequate supply of authorized and unissued shares of Common Stock
is available for general corporate needs, including stock splits, issuances
under the Company's 1993 Stock Option Plan, 1995 Director Stock Option Plan and
1995 Employee Stock Purchase Plan, acquisitions and other equity financings.
The availability of additional shares of Common Stock for issue will afford the
Company greater flexibility in taking these corporate actions.
The additional shares of Common Stock for which authorization is sought
would be identical to the shares of Common Stock of the Company currently
authorized. The newly authorized Common Stock, like the currently authorized
Common Stock, may be used by the Company for any proper corporate purpose. Such
purposes may include, without limitation, issuance as part or all of the
consideration required to be paid by the Company in the acquisition of other
businesses or properties, or issuance in public or private sales for cash as a
means of obtaining additional capital for use in the Company's business and
operations.
If approved by the stockholders, the increased authorized shares of Common
Stock will be available for issue from time to time for such purposes and
consideration as the Board of Directors may approve, and no further vote of the
stockholders of the Company will be required, except as required under the
Delaware General Corporation Law or the rules of any national securities
exchange or quotation system, such as the Nasdaq National Market, on which the
shares of the Company are at the time listed or quoted.
Although the Board of Directors will authorize the issuance of additional
Common Stock based on its judgment as to the best interests of the Company and
its stockholders, the issuance of Common Stock could have a dilutive effect on
the earnings per share, book value per share, and on the equity and voting power
of existing holders of Common Stock. Holders of Common Stock are not now, and
will not be entitled to preemptive rights to purchase shares of any authorized
capital stock of the Company. In addition, the issuance of additional shares of
Common Stock could, in certain instances, render more difficult or discourage a
merger, tender offer, or proxy contest and thus potentially have an
"anti-takeover" effect, especially if Common Stock were issued in response to a
potential takeover.
If the amendment is approved by the stockholders, the first paragraph of
Article FOURTH of the Company's Restated Certificate of Incorporation will be
amended to read as follows:
FOURTH: The Corporation shall be authorized to issue One Hundred One
Million (101,000,000) shares of capital stock, which shall be divided into
One Hundred Million (100,000,000) shares of Common Stock, par value $0.01
per share and One Million (1,000,000) shares of Preferred Stock, par value
$0.01 per share ("Preferred Stock").
The affirmative vote of holders of a majority of the shares of capital
stock outstanding and entitled to vote at the meeting is required to approve
this proposal and adopt the proposed amendment to the Company's Restated
Certificate of Incorporation increasing the number of authorized shares of
Common Stock of the Company. For purposes of the vote to amend the Company's
Page 7
<PAGE>
Restated Certificate of Incorporation to increase the number of authorized
shares of capital stock, abstentions and broker non-votes are treated as votes
against the proposal. If the amendment is not approved by the stockholders, the
Company's authorized capital stock will remain at 61,000,000 shares. In
addition, if the amendment is not approved by the stockholders, the Company may
(i) not be able to issue more than the minimum number of shares available to it
under the equity line agreement with Kingsbridge thus limiting its potential
cash reserves, (ii) be deemed to be in default on the note held by Sumitomo and
any and all amounts owed to Sumitomo shall become immediately due and payable,
and (iii) be deemed to be in breach of its Restated Certificate of Incorporation
due to its failure to reserve the required number of shares for conversion of
the Series E Stock. All of these consequences could have a materially adverse
effect as the Company may be unable to obtain additional financing and may be
required to make cash payments to certain investors as a result of the foregoing
breaches.
[/R]
If approved by the stockholders, the amendment to the Company's Restated
Certificate of Incorporation increasing the authorized shares of Common Stock
will become effective upon the filing of an amendment to the Company's Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware, which is expected to occur promptly following approval by the
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
===
Page 8
<PAGE>
PROPOSAL TO ISSUE SECURITIES
As described in the section of this proxy statement entitled "AMENDMENT OF
THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF CAPITAL STOCK," the Company is currently negotiating an
equity financing to issue 9,320,359 shares of the Company's Common Stock to UMC
at a price of $1.61 per share. UMC would purchase the shares on the same terms
as Unipac purchased shares from the Company in October 1999. UMC is currently
the beneficial owner of [37]% of the Company's outstanding Common Stock. After
the issuance of these shares, UMC would be deemed to beneficially own
approximately [49]% of the Company's outstanding Common Stock and approximately
[45]% of the aggregate shares of Common Stock plus shares convertible into
Common Stock. The Company's Common Stock is traded on the Nasdaq National
Market and Easdaq, and the Company is thus governed by certain Nasdaq and Easdaq
rules. Pursuant to these rules, the Company is required to obtain the approval
of its stockholders prior to the issuance of securities that (i) will result in
a change of control of the Company, or (ii) constitute more than 20% of the
number of shares of Common Stock outstanding before the issuance and is made at
less than market value. Because the issuance of the shares to UMC may
constitute a change of control of the Company as a result of the level of
ownership by UMC and may be an issuance of more than 20% of the outstanding
Common Stock at a price less than market value, stockholder approval must be
obtained in order to issue this number of shares to UMC. Stockholder approval
of the proposed issuance is a condition to UMC's obligation to purchase the
shares. The Board of Directors believes that the issuance to UMC will benefit
the Company in numerous ways, including (i) the acceleration of production
programs in Taiwan, as UMC is the parent company of Unipac, the Company's only
contract manufacturer, and (ii) the Company's obtaining additional cash for
future projects. The shares to be sold to UMC will not be registered under the
Securities Act and may not be offered or sold in the United States without
registering the shares or utilizing an applicable exemption from registration.
The affirmative vote of holders of a majority of the shares of capital
stock voting at the meeting and cast on this proposal is required to approve
this proposal and issue the shares to UMC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
===
Page 9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1998, the Company's Compensation
Committee consisted of Messrs. Schmidt and Hawkins. None of the members of the
Compensation Committee has been an officer or employee of the Company.
Mr. Noblanc, who was a member of the Company's Board of Directors and its
Audit Committee until March 1999, is an officer of CEA Industrie, S.A., which is
controlled by the Commissariat 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 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 $308,000 was accrued in 1998 in that respect.
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
$36,000 in 1992, $1,335,000 in 1993, $1,506,000 in 1994, $1,339,000 in 1995,
$644,000 in 1996, and $637,000 in 1997. In 1998, the Company recorded $848,000
as expenses pursuant to the LETI Research Agreement.
Page 10
<PAGE>
SHARE OWNERSHIP
The following tables set forth certain information regarding the ownership
of the Company's Common Stock and Series E Preferred Stock as of November 30,
1999 by (i) persons known by the Company to be beneficial owners of more than 5%
of its Common Stock and Series E Preferred Stock, (ii) the executive officers of
the Company, (iii) the directors of the Company, and (iv) all current executive
officers and directors of the Company as a group:
COMMON STOCK
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)
-----------------------------
BENEFICIAL OWNER SHARES PERCENT OF
CLASS
- ------------------------------------- ---------- -----------
<S> <C> <C> <C>
United Microelectronics Corporation . 13,538,257 (2) 36.6%
2F, NO. 76 SEC 2, Tunhwa S. RD.,
Taipei, Taiwan, R.O.C.
Unipac Optoelectronics Corporation. . 12,427,146 (3) 33.5%
No 5 Hsin Road VI
Science Based Industrial Park
Hsin Chu City Taiwan R.O.C.
Micron Technology, Inc. . . . . . . . 7,443,562 (4) 19.9%
8000 South Federal Way
Boise, Idaho 83716-9632
Sumitomo Corporation. . . . . . . . . 2,917,116 (5) 7.3%
1-2-2 Hitosubashi, Chiyoda-Ku
Tokyo, 100 Japan
Jean-Luc Grand-Cl ment. . . . . . . . 725,464 (6) 1.9%
Dieter Mezger . . . . . . . . . . . . 525,000 (7) 1.4%
Francis G. Courreges. . . . . . . . . 29,000 (8) *
Michel Garcia . . . . . . . . . . . . 135,116 (9) *
Tom M. Holzel . . . . . . . . . . . . 0 *
John A. Hawkins . . . . . . . . . . . 16,000 (10) *
William C. Schmidt. . . . . . . . . . 4,000 (11) *
Ronald J. Ritchie . . . . . . . . . . 2,000 (12) *
All directors and executive officers. 1,559,787 (13) 4.1%
as a group (11 persons)
<FN>
* 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 November 30, 1999.
Page 11
<PAGE>
(2) Includes the 12,427,146 shares held by Unipac. UMC is the owner of 40.7% of
the outstanding shares of Unipac and three members of the UMC board of
directors serve as members of the Unipac board of directors.
(3) Consists of 12,427,146 shares of Common Stock issued to Unipac in a private
placement closed on October 15, 1999.
(4) Consists of 7,133,562 shares of Common Stock and a warrant to purchase
310,000 shares of Common Stock exercisable until May 19, 2001. The Common
Stock and the warrant were issued to Micron Technology, Inc. in a private
placement May 19, 1999 in consideration for substantially all of the assets
of Micron's Field Emission Display Division and $4.4 million in cash.
(5) Consists of 2,917,116 shares of Common Stock subject to the conversion of a
$5 million convertible note issued in 1997, of which approximately $4.3
million is outstanding as of November 30, 1999. This note is convertible
into shares of our common stock at a conversion price equal to 80% of the
market price on the conversion date, the market price being determined as
the average closing market price over the twenty consecutive trading days
immediately prior to the notice of conversion.
(6) Includes 53,605 shares held by Mr. Grand-Clement's wife and 600,753 shares
of Common Stock subject to options exercisable as of November 30, 1999 or
within 60 days thereafter, of which 6,792 shares are subject to options
held by Mr. Grand-Clement's wife.
(7) Consists of 525,000 shares of Common Stock subject to options exercisable
as of November 30, 1999 or within 60 days thereafter.
(8) Includes 25,000 shares of Common Stock subject to options exercisable as of
November 30, 1999 or within 60 days thereafter.
(9) Includes 127,355 shares of Common Stock subject to options exercisable as
of November 30, 1999 or within 60 days thereafter.
(10) Includes 6,000 shares of Common Stock subject to an option exercisable as
of November 30, 1999 or within 60 days thereafter.
(11) Consists of 4,000 shares of Common Stock subject to an option exercisable
as of November 30, 1999 or within 60 days thereafter. 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 Partnership and 192
Shares which he beneficially owns as a partner in Advent International
Investors II L.P.
(12) Consists of 2,000 shares of Common Stock subject to an option exercisable
as of November 30, 1999 or within 60 days thereafter.
(13) Excludes shares, as to which beneficial ownership is disclaimed, described
in footnote (10). Includes 1,396,608 shares of Common Stock subject to
options exercisable as of November 30, 1999 or within 60 days thereafter.
</TABLE>
SERIES E PREFERRED STOCK
<TABLE>
<CAPTION>
SHARES OF SERIES E PREFERRED STOCK
BENEFICIALLY OWNED
-------------------------------
BENEFICIAL OWNER SHARES PERCENT OF CLASS
- -------------------------------- ------- -----------------
<S> <C> <C> <C>
The Kaufmann Fund, Inc.. . . . . 266,297 (1) 89.6%
140 East 45th Street
43rd floor
New York, NY 10017
Citadel Investment Group, L.L.C. 18,766 (2) 6.3%
225 West Washington Street
Chicago, Illinois 60606
<FN>
(1) As of November 30, 1999, these shares of Series E Preferred Stock
would have been convertible into 3,995,082 shares of Common Stock. In addition,
the Kaufmann Fund, Inc. holds 1,678,169 shares of Common Stock of the Company.
As of November 30, 1999, the Kaufmann Fund, Inc. holds 5,673,251 shares of
Common Stock on a as-converted basis.
Page 12
<PAGE>
(2) As of November 30, 1999, these shares of Series E Preferred Stock
would have been convertible into 281,534 shares of Common Stock. In addition,
Citadel Investment Group, L.L.C. holds 336,702 shares of Common Stock of the
Company (Information as of January 4, 1999). As of November 30, 1999, Citadel
Investment Group, L.L.C. holds 618,236 shares of Common Stock on a as-converted
basis.
</TABLE>
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.
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 2000 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 30, 1999.
Page 13
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PIXTECH, INC.
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS JANUARY 18, 2000
The undersigned stockholder of PixTech, Inc. (the "Company") hereby appoints
Jean-Luc Grand-Clement, Dieter Mezger, Michael Lytton and Marc A. Rubenstein,
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 Special Meeting
of Stockholders to be held on January 18, 2000, and at any adjournment thereof,
hereby revoking any proxy heretofore given with respect to such shares.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
PLEASE MARK VOTES
[X] AS IN THIS EXAMPLE
PIXTECH, INC.
- --------------
1. Proposal put forth by the Board of Directors of the Company to amend the
Company's Restated Certificate of Incorporation to increase number of authorized
shares of the Company's Capital Stock from 61,000,000 to 101,000,000 shares.
For Against Abstain
[_] [_] [_]
2. Proposal put forth by the Board of Directors of the Company to issue up to
9,320,359 shares of the Company's Common Stock to United Microelectronics
Corporation.
For Against Abstain
[_] [_] [_]
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 PROPOSALS 1 AND 2. In their discretion, the proxies are also
authorized to vote upon such matters as may properly come before the meeting.
Signature Date
----------------------- ----------
Signature Date
----------------------- ----------
(IF HELD JOINTLY)
NOTE: Please sign exactly as name appears on stock certificate. 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.
<PAGE>
