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,
/S/ MICHAEL LYTTON
---------------------------
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
37,237,283 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 generally 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 4,478,232 shares of Common Stock. Pursuant to Nasdaq
National Market Marketplace Rules, however, votes cast by holders of Series E
Stock will not be counted in determining the approval of the issuance of
securities to UMC.
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 by holders of the issued and outstanding shares of Common Stock,
whether in person or by proxy. In voting on the issuance of shares to UMC,
abstentions will have no effect upon approval of the issuance
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, 37,237,283 shares of
Common Stock were issued and outstanding, leaving 22,762,717 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 4,478,232 shares of Common Stock, thus
requiring the Company to reserve 6,717,348 shares of the remaining authorized
but unissued shares.
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 4,478,232 shares.
Page 3
<PAGE>
- - $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, $0.9 million of the convertible note
had been converted into 650,000 of Common Stock and the remaining $4.0 million
would have been convertible into 2,901,188 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
- - 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 over a two-year period. 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.
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 9,427,609 shares based on a $1.6875 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.
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,
8,348,859 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 $1.6875, 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 37,237,283 shares of Common Stock
outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK COMMON STOCK
ISSUABLE AS OF ISSUABLE AS OF
DECEMBER 20,1999 DECEMBER 20,1999
BASED ON THE PERCENT ASSUMING A PERCENT OF ASSUMING PERCENT
MARKET PRICE AS OF OF MARKET PRICE COMMON A MARKET OF
DECEMBER 20, 1999 COMMON OF $1 STOCK PRICE OF COMMON
STOCK $4.14 STOCK
<S> <C> <C> <C> <C> <C> <C>
Series E Preferred Stock 4,478,232 11% 7,167,079 16% 4,478,232 11%
Sumitomo Convertible Loan 3,110,676 8% 5,429,219, 13% 1,311,405 3%
Kingsbridge Equity Line 9,427,609 20% 15,909,091 30% 3,842,776 9%
1993 Stock Option Plan 3,892,025 9% 3,892,025 9% 3,892,025 9%
1995 Employee Stock Purchase Plan -- * -- * -- *
Directors Stock Option Plan 22,000 * 22,000 * -- *
Warrants 582,500 2% 582,500 2% 582,500 2%
Total additional shares 21,513,042 37% 33,001,914 47% 14,128,938 28%
<FN>
* Less than one percent.
</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.
Page 5
<PAGE>
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
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.
Page 6
<PAGE>
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
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.
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 7
<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. In the October
1999 financing, the Company issued approximately 12.4 million shares to Unipac
in a private placement at a price of $1.61 per share for a total purchase price
of $20,000,000. In connection with the financing, Unipac agreed to certain
restrictions regarding the acquisition of additional shares of the Company's
stock and entering into voting agreements. The Company also agreed to register
the shares for resale with the Securities and Exchange Commission upon request
by Unipac at any time after one year from the date of issuance.
UMC is currently the beneficial owner of 36% 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. As a result of its level of ownership of the
Company's outstanding common stock, UMC may be able to control the outcome of
actions submitted for a vote of the stockholders, including actions relating to
the election of directors, amendments to the Company's Certificate of
Incorporation, mergers, sales of assets and amendments of the Company's option
plans. UMC will owe no duty to the other stockholders of the Company with
respect to the manner in which it votes the shares that it controls. UMC may
have interests in a matter submitted to the stockholders that are different than
the interest of other stockholders of the Company. As a result of UMC's
ownership of the Company's common stock and its ability to control the outcome
of stockholder actions, the interests of other stockholders may not be served.
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.
Page 8
<PAGE>
The affirmative vote of holders of a majority of the issued and outstanding
shares of Common Stock 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.
===
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 9
<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 December 20,
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>
United Microelectronics Corporation 13,538,257(2) 36.3%
2F, NO. 76 SEC 2, Tunhwa S. RD.,
Taipei, Taiwan, R.O.C.
Unipac Optoelectronics Corporation 12,427,146(3) 33.4%
No 5 Hsin Road VI
Science Based Industrial Park
Hsin Chu City Taiwan R.O.C.
Micron Technology, Inc. 7,443,562(4) 19.8%
8000 South Federal Way
Boise, Idaho 83716-9632
Sumitomo Corporation 2,901,188(5) 7.2%
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) 4.0%
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 December 20, 1999.
Page 10
<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 2,901,188 shares of Common Stock subject to the
conversion of a $5 million convertible note issued in 1997, of which
approximately $4.0 million is outstanding as of December 20, 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 December 20, 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 December 20, 1999 or within 60 days thereafter.
(8) Includes 25,000 shares of Common Stock subject to options
exercisable as of December 20, 1999 or within 60 days thereafter.
(9) Includes 127,355 shares of Common Stock subject to options
exercisable as of December 20, 1999 or within 60 days thereafter.
(10) Includes 6,000 shares of Common Stock subject to an option
exercisable as of December 20, 1999 or within 60 days thereafter.
(11) Consists of 4,000 shares of Common Stock subject to an option
exercisable as of December 20, 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 December 20, 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 December 20, 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>
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 December 20, 1999, these shares of Series E Preferred Stock
would have been convertible into 4,011,652 shares of Common Stock. In addition,
the Kaufmann Fund, Inc. holds 1,678,169 shares of Common Stock of the Company.
As of December 20, 1999, the Kaufmann Fund, Inc. holds 5,689,821 shares of
Common Stock on a as-converted basis.
Page 11
<PAGE>
(2) As of December 20, 1999, these shares of Series E Preferred Stock
would have been convertible into 282,702 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 December 20, 1999, Citadel
Investment Group, L.L.C. holds 619,404 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: Marie Boem, Interim Chief Financial
Officer, no later than December 30, 1999.
Page 12
<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>
