-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ONI/d1lYqShU/tgxv6H88OKjzgLvfnZAj2+B3aw/Q1egGz2CL02aHvgmwgfhJ66x ZgZktVJmamVE4rbYNmq1Zw== 0000891554-98-000192.txt : 19980225 0000891554-98-000192.hdr.sgml : 19980225 ACCESSION NUMBER: 0000891554-98-000192 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980325 FILED AS OF DATE: 19980224 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIXTECH INC /DE/ CENTRAL INDEX KEY: 0000946144 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER TERMINALS [3575] IRS NUMBER: 043214691 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-26380 FILM NUMBER: 98548247 BUSINESS ADDRESS: STREET 1: AVENUE VICTOIRE 13790 CITY: ROUSSET FRANCE STATE: I0 DEF 14A 1 DEFINITIVE 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: [ ] 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: 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 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. 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.
Present Director Term Name and Age Business Experience and Other Directorships Since Expires 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.
Present Director Term Name and Age Business Experience and Other Directorships Since Expires 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.
* Nominee for election as director 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 $3.91 per share. The next grant of options under the Director Plan will be on the date of the 1998 Annual Meeting of Stockholders. Options granted under the Director Plan are not intended to qualify as incentive stock options under the Internal Revenue Code. The exercise of an option under the Director Plan results in ordinary income to the director and a corresponding deduction for the Company, in each case equal to the difference between the option price and the fair market value of the shares on the date of exercise. EXECUTIVE COMPENSATION Summary Compensation Table (1) The following table provides summary information on the cash compensation and certain other compensation paid, awarded, or accrued by the Company and its subsidiaries to or for the Chief Executive Officer of the Company and each of the Company's other four most highly compensated executive officers for 1997 (collectively, the "Named Executive Officers").
======================================================================================================================= Long-Term Compensation Annual Compensation Awards Securities Underlying Name and Principal Position Year Salary($) Bonus($) Options(#) ======================================================================================================================= 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) =======================================================================================================================
(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. 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.
======================================================================================================================= 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) ======================================================================================================================= 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 =======================================================================================================================
(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. 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.
======================================================================================================================= 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 ======================================================================================================================= 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 -- -- =======================================================================================================================
(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. 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. 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 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]
======================================================================================================================= 7/37/1995 12/29/1995 12/31/1996 12/31/1997 ======================================================================================================================= 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 =======================================================================================================================
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. 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. (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. 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. 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. -----END PRIVACY-ENHANCED MESSAGE-----