SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A 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))
[/] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Sec. 240.14 a - 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):
[/] 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:
-1-
PIXTECH, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2001 Annual Meeting of Stockholders of PixTech, Inc. will be held at
4:00 p.m. on Wednesday, May 16, 2001 for the following purposes:
1. To elect two directors to hold office for a term of three years and until
their 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 April 2, 2001 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 ENVELOPPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING AND YOU WISH TO VOTE IN PERSON, YOUR
PROXY WILL NOT BE USED.
By order of the Board of Directors,
Richard B. Smith, Secretary
Dated: April 23, 2001
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PIXTECH, INC.
Avenue Olivier Perroy, Zone Industrielle de Rousset
13790 Rousset France
Telephone 011 334 42 2910 00
Proxy Statement
The enclosed proxy is solicited on behalf of the board of directors of
PixTech, Inc. for use at the 2001 annual meeting of stockholders to be held on
Wednesday, May 16, 2001, at Grand Hyatt New York, Park Avenue at Grand Central,
New York, NY 10017, 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 April 23, 2001.
The principal business expected to be transacted at the meeting will be the
election of two directors, as more fully described below.
The authority granted by an executed proxy may be revoked at any time
before its exercise by filing with our secretary 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.
We 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 our officers and employees in person or by telephone.
VOTING SECURITIES AND VOTES REQUIRED
Only stockholders of record at the close of business on April 2, 2001 will
be entitled to vote at the meeting. On that date, we had outstanding 56,045,198
shares of common stock, $0.01 par value, each of which is entitled to one vote.
In addition, we had outstanding 3,329 shares of series E preferred stock, $0.01
par value, 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 stock are
convertible into as of the record date. As of April 2, 2001, the record date for
the 2001 annual meeting, each share of series E stock would have been
convertible into 83,604 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. A plurality of the votes cast is required to elect
the nominees for directors. 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.
-3-
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. Andre
Borrel, who was elected a director by the board of directors in 2000 to fill a
vacancy created by the resignation of a director whose term expires in 2001, has
been nominated for re-election by the board of directors. Jean-Luc
Grand-Clement, who was elected a director in 1992 and re-elected in 1995 and in
1998, has been nominated for re-election by the board of directors. Unless a
properly signed and returned proxy withholds authority to vote for 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 the nominees are unable to
serve, which is not expected, the shares represented by a properly signed and
returned proxy will be voted for such other candidates as may be nominated by
the board of directors.
The following table contains certain information about the nominees for
directors 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 founder of PixTech, has been our chairman of the 1992 2001
Grand-Clement (1) board of directors since our inception in 1992. Mr. Grand-Clement was our
Age: 61 president through March 1998 and our chief executive officer through
January 1999. Prior to founding PixTech, Mr. Grand-Clement co-founded
European Silicon Structures, a European applications specific integrated
circuit supplier for cell based and full custom semiconductor products, and
served as chief executive officer and then as Chairman of the board of
directors of European Silicon Structures 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 metal-oxide semiconductor design and fabrication joint
venture between National Semiconductor and Saint-Gobain. Mr. Grand-
Clement graduated from Ecole Nationale Superieure des Telecommunications
in Paris.
Dieter Mezger Dieter Mezger joined PixTech in March 1998 as president and was elected 1999 2002
Age: 57 chief executive officer in January 1999. Between 1996 and 1998, Mr. Mezger
worked as a marketing consultant in California. Between 1990 and 1996, Mr.
Mezger was president of Compass Design Automation, a wholly owned
subsidiary of VLSI Technology, Inc. which develops and markets computer
assisted design software tools for integrated circuits designs. From 1984 to
1990, Mr. Mezger established VLSI's European presence in Munich, building
the European marketing and sales organizations, design centers, research and
development operations, as well as its finance and human resources
departments. Mr. Mezger simultaneously built VLSI's wireless and Global
System for mobile communication businesses. Prior to joining VLSI, Mr.
Mezger career included fifteen years with Texas Instruments, where he rose
to the position of manager, sales and marketing, Europe. He holds a B.S. in
engineering from the University of Stuttgart.
-4-
Present
Director Term
Name and Age Business Experience and Other Directorship Since Expires
- --------------------- ------------------------------------------------------------------------------ -------- -------
John A. Hawkins John A. Hawkins has been one of our directors since 1994. Since August 2000 2003
Age: 40 1995, Mr. Hawkins has been a managing partner of Generation Capital
Partners, L.P., a private equity firm. From 1992 until August 1995, Mr.
Hawkins was a general partner of various funds affiliated with Burr, Egan,
Deleage & Co. He is currently a limited partner of various funds associated
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, and HotJobs.com, Ltd., an internet recruiter.
Mr. Hawkins holds degrees from Harvard College and Harvard Business
School.
Ronald J. Ritchie Ronald J. Ritchie was elected to our board of directors effective October 27, 1999 2002
Age: 59 1999. From 1998 to 1999 until its recent acquisition, Mr. Ritchie was
chairman of the board of VXI electronics, Inc., a private power conversion
company based in Oregon. From 1996 to 1998, Mr. Ritchie was president and
chief executive officer of Akashic Memories Corporation, a private
manufacturer of thin film, hard disk media used in disk drives. From 1994 to
1996, Mr. Ritchie was a consultant for start-up or high-tech companies. Prior
to that, Mr. Ritchie held various senior executive positions with various
multinational firms, including Texas Instruments, from 1965 to 1992, where
he begun his career and rose to the position of vice president, Worldwide S/C
Marketing. Mr. Ritchie holds degrees from the Southern Methodist University
and Stanford University. Mr. Ritchie serves as a director of SBE, Inc., a
company that provides communications connectivity and application
solutions for servers and other communications systems.
Andre Borrel (1) Andre Borrel was elected to our board of directors effective February 2, 2000. 2000 2001
Age: 64 Mr. Borrel is a 33-year veteran of the semiconductor industry. He retired in
1994 from Motorola as senior vice president and general manager of the
Communications, Power and Signal Technology Group, a $1.5 billion
operation with 13,000 employees. Prior to that, Mr. Borrel held a number of
management positions with Motorola, including vice president of
International Operations of Motorola Semiconductor Sector from 1986 to
1990. Mr. Borrel currently serves on the boards of directors of Mitel, a
Canadian telecom and semiconductor company, Chartered Semiconductor
Manufacturing in Singapore and MiCS, Microchemical Systems, a chemical
sensor company in Switzerland.
<FN>
(1) Nominee for re-election as director.
-5-
Committees of the Board
The audit committee, which met 4 times during the fiscal year ended
December 31, 2000, is currently composed of two directors, Mr. Ritchie and Mr.
Borrel, both of whom are independent as defined by applicable NASDAQ listing
standards. The board of directors intends to appoint a third independent
director to the audit committee prior to June 14, 2001. The audit committee
selects and evaluates PixTech's independent auditors, reviews the audited
financial statements and discusses the adequacy of PixTech's internal controls
with management and the auditors. The audit committee operates under a written
charter adopted by the board, a copy of which is included in Appendix A to this
proxy statement.
The compensation committee, whose members in 2000 were Messrs. Hawkins and
Ritchie, acts for the board of directors with respect to our compensation
practices and their implementation. It sets and implements the compensation of
our officers and administers the amended and restated 1993 stock option plan and
the 1995 employee stock purchase plan. The compensation committee held 2
meetings in 2000. The compensation committee currently consists of Messrs.
Hawkins and Ritchie.
The entire board of directors functions as a nominating committee,
considering nominations submitted by the chairman of the board.
Attendance at Meetings
The board of directors held 4 meetings during 2000, and each director
attended at least 75% of the meetings of the board and of all committees of the
board on which he served.
Audit Committee Report
In the course of its oversight of PixTech's financial reporting process,
the audit committee of the board of directors has (i) reviewed and discussed
with management PixTech's audited financial statements for the fiscal year ended
December 31, 2000, (ii) discussed with Ernst & Young, PixTech's independent
auditors, the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, and (iii) received the
written disclosures and the letter from the auditors required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
discussed with the auditors their independence, and considered whether the
provision of nonaudit services by the auditors is compatible with maintaining
their independence.
Based on the foregoing review and discussions, the audit committee
recommended to the board of directors that the audited financial statements be
included in our Annual Report on Form 10-K for the year ended December 31, 2000
for filing with the Securities and Exchange Commission.
By the audit committee,
Ronald Ritchie (Chair)
Andre Borrel
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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. Messrs. Mezger and Grand-Clement are the only directors who are our
employees and they will not receive additional compensation for their services
as directors.
1995 Director Stock Option Plan
- -----------------------------------
The 1995 director stock option plan provides that each director who is not
our employee 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 our common
stock on the day immediately preceding the grant date. In 2000, Andre Borrel
received a grant under the Director Plan of an option to purchase 6,000 shares
of our common stock.
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 our common stock. Messrs. Hawkins, Ritchie and
Borrel are currently eligible to participate under the director plan. As of
December 31, 2000, options to purchase 26,000 shares of our common stock were
outstanding pursuant to the director plan.
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 us, in each case equal to the difference between the
option price and the fair market value of the shares on the date of exercise.
-7-
SUMMARY COMPENSATION TABLE (1)
The following table provides summary information on the cash compensation
and certain other compensation paid, awarded, or accrued by us and our
subsidiaries to or for our chief executive officer and each of our other four
most highly compensated executive officers for 2000.
Annual Compensation (1) Long-Term
----------------------- Compensation
Awards
Securities
Underlying
Name and Principal Position Year Salary ($) Other ($) Options (#)
- ------------------------------------------ ---- ---------- ----------- ----------
Dieter Mezger 2000 177,288 5,400 (2) 600,000
President and Chief Executive Officer
1999 180,000 -- 300,000
1998 156,000 -- 300,000
Donald Crim (3) 2000 161,827 76,860 (4) 250,000
Vice President, Taiwan Operations
1999 165,000 37,460 (4) 160,000
James J. Cathey (5) 2000 140,000 44,413 (6) 220,000
Vice President, Marketing and Business
Development
1999 84,541 165,333 (6) 154,000
Michel Garcia 2000 92,462 35,858 (7) 200,000
Vice President, Chief Technology Officer
1999 91,891 44,714 (7) 100,000
1998 101,728 53,808 (7) --
Jean-Luc Grand-Clement 2000 112,141 -- --
Former President, Former Chief Executive
Officer Current Chairman of the Board
1999 133,329 -- 100,000
1998 192,246 -- --
<FN>
(1) Some dollar amounts shown for Messrs. Garcia and Grand-Clement reflect the
conversion of Euros to U.S. dollars at an average conversion rate for Euros
to U.S. dollars of 0.8992 in 1998, 0.9954 in 1999 and 1.075 in 2000.
(2) Automobile expenses.
(3) Mr. Crim joined PixTech in June 1999.
(4) In 2000, consisted in $76,860 daily expenses. In 1999, consisted in $32,460
daily expenses and $5,000 relocation expenses.
(5) Mr. Cathey joined PixTech in May 1999.
(6) In 2000, bonus in connection with the DARPA program contract. In 1999,
bonus in connection with the acquisition of Micron Technology, Inc.'s field
emission display division.
(7) In 2000, consisted of $31,787 daily expenses, $3,498 in rent and $573 in
automobile expenses. In 1999, consisted of $36,500 in daily expenses,
$6,500 in rent, and $1,714 in automobile expenses.
-8-
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on stock options granted during
2000 to the executive officers named in the summary compensation table.
Name Number of % of Total Exercise Expiration Potential Realized Value at
---- --------- ---------- -------- ---------- ---------------------------
Securities Options Price Date Assumed Annual Rates of Stock
---------- ------- ----- ---- -----------------------------
Underlying Granted to ($/share) Price Appreciation for Option Term
---------- ---------- --------- ----------------------------------
Options Employees ($) (1)
------- --------- -------
Granted (#) in 2000
----------- -------
5% 10%
--- ---
Dieter Mezger 400,000 (2) 22.45 2.083 01/18/10 554,618 1,376,669
200,000 (3) 2.250 10/30/10 283,003 717,184
Donald Crim 150,000 (4) 9.36 2.083 01/18/10 207,982 516,251
100,000 (5) 2.250 10/30/10 141,501 358,592
James J. Cathey 120,000 (6) 8.23 2.083 01/18/10 166,385 413,001
100,000 (7) 2.250 10/30/10 141,501 358,592
Michel Garcia 100,000 (8) 7.49 2.083 01/18/10 138,655 344,167
100,000 (9) 2.250 10/30/10 141,501 358,592
Jean-Luc Grand-Clement -- -- -- -- -- --
<FN>
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% appreciation rate 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) This option vests as to 400,000 shares on January 18, 2005. The
exercisability of 133,334 of these shares shall be accelerated at any time
after the price of the stock has been at $6.00 for three consecutive
months; the exercisability of 133,333 of the shares shall be accelerated at
any time after the production output at Unipac has reached 2,500 displays
in one month, and the exercisability of the 133,333 remaining shares shall
be accelerated at any time after the date a cumulative net product billing
of $5 million has been reached, starting from January 1, 2000.
(3) This option vests as to 200,000 shares on October 30, 2005. The
exercisability of 80,000 of such shares will be accelerated upon the
achievement of the 2001 product revenue goal for first six months for
January-June 2001. The exercisability of 80,000 additional shares will be
accelerated upon the achievement of the 2001 product revenue goal for
second six months for July-December 2001. The exercisability of 40,000
remaining shares shall be accelerated upon the occurrence of an average
closing price of our common stock of at least $6 for any three consecutive
months.
(4) This option vests as to 150,000 shares on January 18, 2005. The
exercisability of 75,000 of these shares shall be accelerated at any time
after the achievement of a 3 months production output at Unipac of 1,000
units per month, and the exercisability of the remaining 75,000 shares
shall be accelerated at any time after a 3 months production output at
Unipac of 2,500 units per month.
(5) This option vests as to 100,000 shares on October 30, 2005. The
exercisability of 33,334 of such shares shall be accelerated upon the
achievement of a 45% overall yield for 4 weeks. The exercisability of
33,333 shares will be accelerated upon the achievement of a 60% overall
yield for 4 weeks. The exercisability of the 33,333 remaining shares shall
be accelerated upon the occurrence of an average closing price of our
common stock of at least $6 for any three consecutive months.
-9-
(6) This option vests as to 120,000 shares on January 18, 2005. The
exercisability of 40,000 of these shares shall be accelerated at any time
after completion of invoicing of the DARPA 2000 program with minimum $6
million; the exercisability of 40,000 of the shares shall be accelerated at
any time after entering orders representing cumulative $5 million revenue,
starting January 1, 2000, with firm delivery dates, and the exercisability
of the remaining 40,000 shares shall be accelerated at any time after
entering orders representing cumulative $20 million revenue, starting
January 1, 2000, with firm delivery dates.
(7) This option vests as to 100,000 shares on October 30, 2005. The
exercisability of 33,334 of such shares shall be accelerated upon the
occurrence of a $5 million 5.2 inch monochrome display revenue. The
exercisability of 33,333 additional shares shall be accelerated upon the
occurrence of a $20 million 5.2 inch monochrome display and 7 inch color
display revenue. The exercisability of the remaining 33,333 shares shall be
accelerated upon the occurrence of an average closing price of our common
stock of at least $6 for any three consecutive months.
(8) This option vests in four equal installments on July 18, 2001, July 18,
2002, July 18, 2003 and July 18, 2004.
(9) This option vests as to 100,000 shares on October 30, 2005. The
exercisability of 33,334 of such shares shall be accelerated upon the
achievement of 5,000 hours lifetime of monochrome 5.2 inch display with
less than 5% differential aging. The exercisability of 33,333 additional
shares shall be accelerated upon the achievement of the same results on the
7-inch color display. The exercisability of the remaining 33,333 shares
shall be accelerated upon the occurrence of an average closing price of our
common stock of at least $6 for any three consecutive months.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END STOCK OPTION VALUES
The following table sets forth certain information concerning the
exercisable and unexercisable stock options as of December 31, 2000, held by
executive officers named in the summary compensation table.
Value Number of Securities
----- --------------------
Name Shares Realized Underlying Unexercised Value of Unexercised
---- ------ ----------- ---------------------- --------------------
Acquired On ($) Options In-The Money Options
----------- --- ------- --------------------
Exercise (#) at 12/31/00 (#) at 12/31/00 ($) (1)
------------ --------------- -------------------
Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- ----------- ----------- ------------- ----------- -------------
Dieter Mezger 100,000 682,380 462,500 637,500 0 0
Donald Crim 20,000 147,919 40,000 350,000 0 0
James J. Cathey -- -- 77,000 297,000 0 0
Michel Garcia 50,000 432,405 108,605 308,500 0 0
Jean-Luc Grand-Clement -- -- 637,711 173,750 0 0
<FN>
(1) Based on the difference between the respective option exercise price and
the closing market price of our common stock on December 31, 2000, which
was $1.094.
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EXECUTIVE EMPLOYMENT AGREEMENTS
Each of Messrs. Grand-Clement, Garcia and Louart have entered into
employment agreements in substantially the same form as most of the Company's
other employees. 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 PixTech. Messrs. Mezger, Crim and Cathey have entered
into employment agreements providing for employment for an indefinite period,
non-competition and non-solicitation for one year following termination, and
confidentiality provisions. However, Mr. Mezger's employment agreement includes
the following provisions: (i) upon a change of control all of Mr. Mezger's
options accelerate and vest, (ii) upon termination of Mr. Mezger's employment by
PixTech without cause, Mr. Mezger's options accelerate and vest and PixTech is
obligated to pay Mr. Mezger a lump sum equal to two years base salary, and (iii)
upon termination of Mr. Mezger's employment by Mr. Mezger due to a demotion or a
decrease in base salary, PixTech is obligated to pay Mr. Mezger a lump sum equal
to two years base salary. Mr. Cathey's employment agreement includes the
following provisions: (i) upon a change of control all of Mr. Cathey's options
accelerate and vest, (ii) upon termination of Mr. Cathey's employment by PixTech
without cause, PixTech is obligated to pay Mr. Cathey a lump sum equal to six
month base salary plus any benefits to which he is entitled to. Mr. Crim's
employment agreement includes the following provisions (i) all options will vest
in case of change of majority ownership of PixTech, (ii) upon termination of Mr.
Crim's employment by Pixtech without cause, Mr. Crim will be entitled to a one
time payment equal to six month salary and his stock options will continue to
vest for 12 months.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This compensation committee report describes the compensation policies
applicable to our executive officers, including Mr. Dieter Mezger as chief
executive officer.
OVERALL POLICY. Our executive compensation program is designed to be closely
linked to corporate performance and returns to stockholders. To this end, we
have developed an overall compensation strategy and specific compensation plan
that tie a portion of executive compensation to PixTech's success in meeting
specified performance goals. In addition, through the use of stock options, we
ensure that a part of the executive's compensation is closely tied to
appreciation in PixTech'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 our 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.
We determine the compensation of the seven most highly compensated
corporate executives, including the executive officers named in the summary
compensation table. We take into account the views of our chief executive
officer in reviewing the individual performance of these executives (other than
the chief executive officer).
The key elements of PixTech's executive compensation consist of base
salary, annual bonus and stock options. Our policies with respect to each of
these elements, including the basis for the compensation awarded to Mr. Mezger,
are discussed below. In addition, while the elements of compensation described
below are considered separately, we take into account the full compensation
package afforded by PixTech to the individual, including insurance and other
employee benefits, as well as the programs described below.
-11-
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, we consider
generally available information regarding salaries prevailing in the industry,
but do not utilize any particular indices or peer groups.
Annual salary adjustments are determined by evaluating the financial
performance of PixTech and of each executive officer, and also take into account
new responsibilities. We do, where appropriate, also consider 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 base salary for 2000 for each of the executive officers, including Mr.
Mezger, was based on the performance of the individual as well as a review of
compensation paid to persons holding comparable positions in other companies.
In 2000, Mr. Mezger was paid a base salary of $177,288, which represented
no increase compared to his 1999 base salary. No bonus was awarded to Mr. Mezger
in 2000.
ANNUAL BONUS. Our executive officers are eligible for an annual cash bonus,
based primarily on achievement of PixTech's overall performance. For the year
ended December 31, 2000, no annual bonuses were awarded to our executive
officers, other than Mr. Cathey who was awarded a bonus of $44,413 in 2000 in
connection with his 1% commission on the DARPA contract.
STOCK OPTIONS. Stock options are granted to our executive officers under our
amended and restated 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 based on the undiscounted fair market value of
our common stock 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, we
evaluate the job level of the executive, responsibilities to be assumed in the
upcoming year, and responsibilities in prior years, and also take into account
the size of the officer's awards in the past. Based on these factors and on the
level of his existing stock ownership, options to purchase 600,000 shares of our
common stock were granted to Mr. Mezger in 2000.
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 PixTech received applicable compensation at that level in 2000. At such time
as it becomes likely that the applicable compensation for a covered executive
will exceed the deductibility limit, we will consider the adoption of a policy
in this regard.
CONCLUSION. Through the programs described above, a very significant portion of
our executive compensation is linked directly to individual and corporate
performance and stock appreciation. In 2000, as in previous years, a substantial
portion of PixTech's targeted executive compensation consists of
performance-based variable elements. We intend to continue the policy of linking
executives' compensation to PixTech's 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 A. Hawkins
Ronald J. Ritchie
-12-
STOCK PERFORMANCE GRAPH
The following graph shows the cumulative total stockholder return on our
common stock over the period beginning December 31, 1996 and ending December 31,
2000, 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
reinvestments of dividends. The Electronic Components, N.E.C. Index consists of
190 publicly traded electronic components companies reporting under the same
Standard Industrial Classification Code (SIC 3670-3679) as PixTech.
[Graphic omitted]
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------- -------- -------- -------- -------- --------
PixTech, Inc. 100 39.700 23.70 24.70 23.10 28.23
Electronics Components, NEC Index 100 173.200 181.60 161.95 301.18 246.25
NASDAQ Market Index 100 123.000 122.48 172.72 321.00 193.18
-13-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 2000, our compensation committee
consisted of Messrs. Hawkins and Ritchie. None of the members of our
compensation committee has been an officer or employee of PixTech.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease a total of approximately 73,000 square feet (7,300 square meters)
of space from Micron Technology, Inc. in Boise, Idaho, under a three-year lease
expiring in May 2002 at a monthly rent of $25,000 per month. The lease is
renewable for an additional term of three years. This rented space includes a
clean room devoted to our research and development activities. Micron is a
greater than ten percent shareholder of PixTech.
In May 1997, we entered into a Foundry Agreement with Unipac, a Taiwanese
liquid crystal display manufacturer, in order to accelerate the time to
manufacturing and to reduce the huge investment costs needed for a volume
production of our field emission displays. This agreement will terminate on
December 31, 2005. We have granted Unipac a non-exclusive right and license,
without the right to grant sublicenses, under all of PixTech's intellectual
property rights, to make and sell FED devices only to PixTech and its industrial
partners and their respective affiliates. Unipac has acquired at its own expense
the key equipment for use in connection with FED devices and PixTech may use
equipment belonging to Unipac. In addition to and independently of the charges
for FED components and devices under the agreement, PixTech pays Unipac a
monthly service fee of approximately NTD 20 million. Unipac is a greater than
ten percent shareholder of PixTech.
-14-
SHARE OWNERSHIP
The following tables set forth certain information regarding the ownership
of our common stock and series E preferred stock as of March 28, 2001 by (i)
persons known by us to be beneficial owners of more than 5% of our common stock
and series E preferred stock, (ii) our executive officers, (iii) our directors,
and (iv) all of our current executive officers and directors as a group:
COMMON STOCK
BENEFICIAL OWNER SHARES OF COMMON STOCK BENEFICIALLY OWNED (1)
- ---------------- ---------------------------------------------
SHARES PERCENT OF CLASS
------------- ----------------
Unipac Optoelectronics Corporation 12,427,146 22.1%
No. 5 Hsin Road VI
Science Based Industrial Park
Hsin Chu City, Taiwan, R.O.C.
United Microelectronics Corporation 9,883,470 (2) 17.6%
2F, NO. 76 SEC 2,
Tunhwa S. RD.,
Taipei, Taiwan, R.O.C.
Micron Technology, Inc. 7,443,562 (3) 13.2%
8000 South Federal Way
Boise, Idaho 83716-9632
Jean-Luc Grand-Clement 653,428 (4) 1.2%
Dieter Mezger 550,000 (5) 1.0%
Michel Garcia 148,366 (6) *
Marie Boem 71,667 (7) *
James Cathey 82,000 (8) *
Don Crim 40,000 (9) *
John A. Hawkins 6,000 (10) *
Ronald J. Ritchie 4,000 (11) *
Andre Borrel 4,000 (12) *
All directors and executive officers 1,559,461 2.7%
As a group (10 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 March 28, 2001.
(2) Excludes 12,427,146 shares held by Unipac. In a Schedule 13D/A filed with
the Securities and Exchange Commission on November 22, 1999, UMC stated its
view that Unipac's shares need not be aggregated with UMC's shares.
(3) 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.
(4) Consists of shares of common stock subject to options exercisable as of
March 28, 2001 or within 60 days thereafter, 6,967 are subject to options
held by Mr. Grand-Clement's wife.
(5) Consists of 50,000 shares of common stock and of 500,000 shares of common
stock subject to options exercisable as of March 28, 2001 or within 60 days
thereafter.
(6) Consists of 12,261 shares of Common Stock and of 136,105 shares of Common
Stock subject to options exercisable as of March 28, 2001 or within 60 days
thereafter.
-15-
(7) Consists of 5,000 shares of common stock and 66,667 shares of Common Stock
subject to options exercisable as of March 28, 2001 or within 60 days
thereafter.
(8) Consists of 5,000 shares of common stock and 77,000 shares of Common Stock
subject to options exercisable as of March 28, 2001 or within 60 days
thereafter.
(9) Consists of 40,000 shares of Common Stock subject to options exercisable as
of March 28, 2001 or within 60 days thereafter.
(10) Consists of 6,000 shares of common stock subject to options exercisable as
of March 28, 2001 or within 60 days thereafter.
(11) Consists of 4,000 shares of common stock subject to options exercisable as
of March 28, 2001 or within 60 days thereafter.
(12) Consists of 4,000 shares of common stock subject to options exercisable as
of March 28, 2001 or within 60 days thereafter.
SERIES E PREFERRED STOCK
SHARES OF SERIES E PREFERRED STOCK
BENEFICIALLY OWNED
BENEFICIAL OWNER SHARES PERCENT OF
CLASS
- ----------------------------------------------- ------------ ------------
Banque Generale du Luxembourg 3,329 (1) 100
(1) As of March 28, 2001, these shares of series E stock would have been
convertible into 80,626 shares of common stock.
-16-
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our executive officers and directors are required under Section 16(a) of
the Exchange Act to file reports of ownership of PixTech securities and changes
in ownership with the Securities and Exchange Commission. Copies of those
reports must also be furnished to us.
Based solely on a review of the copies of reports furnished to us and
written representation that no other reports were required, we believe that
during 2000 the executive officers and directors of the Company complied with
all applicable Section 16(a) filing requirements, except as follows:
In February 2000, Mr. Garcia filed an Annual Statement of Changes in
Beneficial Ownership of Securities on Form 5 for the year 2000. In addition to
the timely reporting of certain option grants during 2000, this filing also
reported the open market purchase of 4,500 shares of our common stock on
September 8, 2000.
In April 2000, Mr. Garcia filed a Statement of Changes in Beneficial
Ownership on Form 4 for the period of February 2000. This filing reported the
purchase of 50,000 shares of our common stock upon exercise of options on
February 27, 2000. In July 2000, Mr. Garcia filed an amended Form 4 to correct
the reporting of this same transaction.
In April 2000, Mr. Grand-Clement filed a Statement of Changes in Beneficial
Ownership on Form 4 for the period of February 2000. This filing reported open
market sales of an aggregate of 124,711 shares of our common stock on February
29, 2000.
In April 2000, Mr. Crim filed a Statement of Changes in Beneficial
Ownership on Form 4 for the period of February 2000. This filing reported the
purchase of 20,000 shares of our common stock upon exercise of options on
February 27, 2000 and the open market sale of 10,000 shares of our common stock
on February 28, 2000.
INFORMATION CONCERNING AUDITORS
The firm of Ernst & Young, independent accountants, has audited our
accounts since our inception and will do so for 2001. Representatives of Ernst &
Young have been invited to attend the annual meeting.
The fees for the services provided by Ernst & Young to us in 2000 were as
follows:
AUDIT FEES $50,151
ALL OTHER FEES $20,235
-17-
STOCKHOLDER PROPOSALS
Our bylaws require a stockholder who wishes to bring business before or
propose directors nominations at an annual meeting to give written notice to our
secretary 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 2002 annual
meeting of stockholders and desires that it be considered for inclusion in our
proxy statement and form of proxy, it must be received by us at Avenue Olivier
Perroy, Zone Industrielle de Rousset, 13790 Rousset, France; Attention: Marie
Boem, Chief Financial Officer, not later than December 20, 2001.
OTHER MATTERS
Our 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 herein to vote the shares in their discretion.
IN ADDITION TO OUR ANNUAL REPORT, WHICH HAS BEEN MAILED TO STOCKHOLDERS, ANY
HOLDER OR BENEFICIAL OWNER OF OUR COMMON STOCK MAY OBTAIN A COPY OF OUR FORM
10-K FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. WRITTEN REQUEST FOR COPIES OF OUR FORM 10-K SHOULD BE
ADDRESSED TO MARIE BOEM, CHIEF FINANCIAL OFFICER, AVENUE OLIVIER PERROY, ZONE
INDUSTRIELLE DE ROUSSET, 13790 ROUSSET, FRANCE.
-18-
APPENDIX A
PIXTECH, INC.
Audit Committee Charter
Purpose
The principal purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its responsibility to oversee management's conduct of
the Company's financial reporting process, including by reviewing the financial
reports and other financial information provided by the Company, the Company's
systems of internal accounting and financial controls, and the annual
independent audit process.
In discharging its oversight role, the Committee is granted the power to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose.
The outside auditor is ultimately accountable to the Board and the Committee, as
representatives of the stockholders. The Board and the Committee shall have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditor. The Committee shall be responsible for
overseeing the independence of the outside auditor.
This Charter shall be reviewed for adequacy on an annual basis by the
Board.
Membership
The Committee shall be comprised of not less than three members of the
Board, and the Committee's composition will meet the requirements of the Nasdaq
Audit Committee Requirements. Accordingly, all of the members will be directors:
- Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
- Who are financially literate or who become financially literate within
a reasonable period of time after appointment to the Committee.
In addition, at least one member of the Committee will have accounting or
related financial management expertise.
Key Responsibilities
The Committee's role is one of oversight, and it is recognized that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditor is responsible for auditing those
financial statements.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. The functions are set forth as
a guide and may be varied from time to time as appropriate under the
circumstances.
- The Committee shall review with management and the outside auditor the
audited financial statements to be included in the Company's Annual
Report on Form 10-K and the Annual Report to Stockholders, and shall
review and consider with the outside auditor the matters required to
be discussed by Statement on Auditing Standards No. 61.
- As a whole, or through the Committee chair, the Committee shall review
with the outside auditor, prior to filing with the Securities and
Exchange Commission, the Company's interim financial information to be
included in the Company's Quarterly Reports on Form 10-Q and the
matters required to be discussed by SAS No. 61.
- The Committee shall periodically discuss with management and the
outside auditor the quality and adequacy of the Company's internal
controls.
- The Committee shall request from the outside auditor annually a formal
written statement delineating all relationships between the auditor
and the Company consistent with Independence Standards Board Standard
No. 1, discuss with the outside auditor any such disclosed
relationships and their impact on the outside auditor's independence,
and take or recommend that the Board take appropriate action regarding
the independence of the outside auditor.
- The Committee, subject to any action that may be taken by the Board,
shall have the ultimate authority and responsibility to select (or
nominate for stockholder approval), evaluate and, where appropriate,
replace the outside auditor.
APPENDIX B
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PIXTECH, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 16, 2001
The undersigned stockholder of PixTech, Inc. hereby appoints Jean-Luc
Grand-Clement, Dieter Mezger, Marie Boem and Richard Smith, 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 PixTech entitled to vote at the annual meeting of stockholders to be
held on May 16, 2001, 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)
Back of Card:
A [X] Please mark your
votes as in this
example.
1. Election of Directors
[ ] FOR [ ] WITHHELD Nominees: Andre Borrel
ALL NOMINEES FROM ALL NOMINEES Jean-Luc Grand-Clement
[ ] ____________________________________
FOR ALL NOMINEES EXCEPT FOR THE
NOMINEE LISTED IN THE SPACE ABOVE
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 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 name by authorized person.