This Proxy Statement was inadvertently not filed with the SEC at the time it was
delivered to the shareholders of Cimetrix Incorporated on April 14, 1999,
consequently this filing is being made to bring the Company's file with the SEC
current.
CIMETRIX INCORPORATED
6979 South High Tech Drive
Salt Lake City, Utah 84047-3757
April 14, 1999
Dear Shareholder:
On behalf of the Board of Directors and management, I cordially invite
you to attend the Annual Meeting of the Shareholders of Cimetrix Incorporated,
which will be held on Saturday, May 15, 1999, at 9:00 a.m. in the Marriott
Hotel, 75 South West Temple, Salt Lake City, Utah.
At the meeting, in addition to electing five (5) directors, your Board
is asking shareholders to ratify a contract with Bicoastal Holding Company for
my continuing services through December 2000. These proposals are fully set
forth in the accompanying proxy statement which you are urged to read
thoroughly. I will also report on the progress of the Company and answer
shareholder questions.
It is important that your shares are represented and voted at the
meeting whether or not you plan to attend. Accordingly, you are requested to
sign, date and mail the enclosed proxy in the envelope provided at your earliest
convenience.
Thank you for your cooperation.
Very truly yours,
/s/ Paul A. Bilzerian
---------------------
Paul A. Bilzerian
President
CIMETRIX INCORPORATED
6979 South High Tech Drive
Salt Lake City, Utah 84047-3757
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Meeting Date: May 15, 1999
TO OUR SHAREHOLDERS:
The Annual Meeting of the Shareholders of Cimetrix Incorporated, a
Nevada corporation (the "Company"), will be held on May 15, 1999, commencing at
9:00 a.m., in the Marriott Hotel, 75 South West Temple, Salt Lake City, Utah, to
consider and vote on the following matters described in this notice and the
accompanying Proxy Statement:
1. To elect five directors to the Company's Board of Directors to serve
for one-year terms.
2. To ratify a contract with Bicoastal Holding Company for: (i)Paul A.
Bilzerian's continuing services to Cimetrix as its President, through December
31, 2000, (ii) authorization for Mr. Bilzerian to make special bonus payments,
in the event of a sale of a majority of the common stock of Cimetrix to a third
party or the sale of substantially all of the assets of Cimetrix. Such bonus
payments shall not exceed 5% of the total sales price of the Company's stock or
assets, up to a maximum amount of $5,000,000. Such bonus payments shall be
payable to Cimetrix employees whom Mr. Bilzerian believes, in his sole
discretion, contributed most to the success of Cimetrix.
The Board of Directors has fixed the close of business on March 1, 1999
as the record date for determination of shareholders entitled to vote at the
Annual Meeting or any adjournments thereof, and only record holders of Common
Stock at the close of business on that day will be entitled to vote. At the
record date, 23,450,928 shares of Common Stock were issued and outstanding.
TO ASSURE REPRESENTATION AT THE ANNUAL MEETING, SHAREHOLDERS ARE URGED
TO SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY SHAREHOLDER ATTENDING
THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE PREVIOUSLY RETURNED A
PROXY. A PROXY MAY BE REVOKED BY WRITTEN REVOCATION DELIVERED TO THE COMPANY AT
ANY TIME PRIOR TO THE ANNUAL MEETING.
By Order of the Board of Directors,
/s/ Riley G. Astill
-------------------
Riley G. Astill
Vice President of Finance and Secretary
April 14, 1999
Salt Lake City, Utah
CIMETRIX INCORPORATED
6979 South High Tech Drive
Salt Lake City, Utah 84047-3757
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
Meeting Date: May 15, 1999
This Proxy Statement is being sent on or about April 14, 1999 in
connection with the solicitation of proxies by the Board of Directors of
Cimetrix Incorporated, a Nevada corporation (the "Company" or "Cimetrix"). The
proxies are for use at the 1999 Annual Meeting of the Shareholders of the
Company, which will be held on May 15, 1999, commencing at 9:00 a.m., in the
Marriott Hotel, 75 South West Temple, Salt Lake City, Utah, and at any meetings
held upon adjournment thereof (the "Annual Meeting"). The record date for the
Annual Meeting is the close of business on March 1, 1999 (the "Record Date").
Only holders of record of the Company's Common Stock on the Record Date are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting.
A proxy card is enclosed. Whether or not you plan to attend the Annual
Meeting in person, please sign, date and return the enclosed proxy card as
promptly as possible, in the postage-prepaid envelope provided, to ensure that
your shares will be voted at the Annual Meeting. Any shareholder who returns a
proxy has the power to revoke it at any time prior to its effective use by
filing with the Secretary of the Company an instrument revoking it or a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person. Unless contrary instructions are given, any such proxy, if not
revoked, will be voted at the Annual Meeting for the five nominees for election
as directors as set forth in this Proxy Statement and for the proposal to ratify
a contract with Bicoastal Holding Company for: (i) Paul A. Bilzerian's
continuing services to Cimetrix as its President, through December 31, 2000,
(ii) authorization for Mr. Bilzerian to make special bonus payments, in the
event of a sale of a majority of the common stock of Cimetrix to a third party
or the sale of substantially all of the assets of Cimetrix. Such bonus payments
shall not exceed 5% of the total sales price of the Company's stock or assets,
up to a maximum amount of $5,000,000. Such bonus payments shall be payable to
Cimetrix employees whom Mr. Bilzerian believes, in his sole discretion,
contributed most to the success of Cimetrix.
At the Record Date, March 1, 1999, there were 23,450,928 Shares of the
Company's Common Stock issued and outstanding. The presence, either in person or
by proxy, of persons entitled to vote a majority of the Company's outstanding
Common Stock is necessary to constitute a quorum for the transaction of business
at the Annual Meeting. Abstentions and broker non-votes are counted for purposes
of determining a quorum, but are not considered as having voted for purposes of
determining the outcome of a vote. No other voting securities of the Company
were outstanding at the Record Date.
Holders of the Common Stock have one vote for each share on any matter
that may be presented for consideration and action by the shareholders at the
Annual Meeting. In order for action to be taken on any matter, it must receive a
majority of the votes present and voting in person or by proxy except the
election of directors. Directors may be elected by a plurality vote. The five
nominees for director receiving the highest number of votes at the Annual
Meeting will be elected. Unless instructed otherwise, the shares represented by
proxies to management will be voted for the named nominees.
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying form of proxy, and the cost of soliciting proxies
relating to the Annual Meeting, will be borne by the Company. The Company may
request banks and brokers to solicit their customers who beneficially own Common
Stock listed of record in names of nominees, and will reimburse such banks and
brokers for their
-1-
reasonable out-of-pocket expenses for such solicitations. The solicitation of
proxies by mail may be supplemented by telephone, telegram and personal
solicitation by officers, directors and regular employees of the Company, but no
additional compensation will be paid to such individuals.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors has determined that the five directors named
below will be nominated for election as directors at the Annual Meeting. Each
nominee has consented to being named in the Proxy Statement as a nominee for
election as director and has agreed to serve as director if elected.
The Board of Directors have advised the Company that it intends at the
Annual Meeting to vote the shares covered by the proxies for the election of the
nominees named below. If any one or more of such nominees should for any reason
become unavailable for election, the Board of Directors may vote for the
election of such substitute nominees as the Board of Directors may propose. The
accompanying form of proxy contains a discretionary grant of authority with
respect to this matter.
The nominees for election as directors at the Annual Meeting are set
forth below.
Positions with Director
Name the Company Since
Paul A. Bilzerian President, Chief Executive February 9, 1996
Officer and Director
Lowell Anderson Director January 23, 1998
Dr. Ron Lumia Director January 1, 1996
Randall Mackey Director January 23, 1998
Bill Van Drunen Director May 16, 1998
Biographical Information
There is no family relationship among the current directors and
executive officers. The following sets forth brief biographical information for
each director and prospective director of Cimetrix.
Paul A. Bilzerian, age 48, President, Chief Executive Officer and director, has
been involved in Cimetrix in various capacities since 1994. Mr. Bilzerian has
been the President of Bicoastal Holding Company, a private investment company,
since 1993. During the period 1988 to 1989, he was the Chairman and Chief
Executive Officer of the Singer Company. Mr. Bilzerian has been involved in more
than $10 billion dollars of corporate transactions and financing. He has a B.S.
Degree in Political Science from Stanford University and a Masters in Business
Administration from Harvard University.
Dr. Lowell K. Anderson, age 56, has been a director of Cimetrix since
January 23, 1998. Dr. Anderson has practiced Oral and Maxillofacial Surgery from
1975 to the present. From 1973 to 1975, Dr. Anderson served
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as a Major in the United States Air Force. From 1970 to 1973, Dr. Anderson
did his residency at Mayo Clinic and Mayo Graduate School of Medicine. Dr.
Anderson graduated from the University of Louisville Dental School with honors
in 1966. Dr. Anderson is currently a member of the Brigham Young University
Alumni Board. Dr. Anderson also served as President of the Western Society of
Oral and Maxillofacial Surgeons, representing over 600 surgeons.
Dr. Ron Lumia,age 48, has been a director of Cimetrix since January 1,
1996. He has been a Professor in the Mechanical Engineering Department of the
University of New Mexico since October, 1994. From 1986 through September, 1994,
Dr. Lumia served as Group Leader at the National Institute of Standards and
Technology (NIST), performing research in the areas of advanced automation,
robotics, machine vision, and systems integration. Previously, he taught at
ESIEE (Paris, France), Virginia Tech, and the National University of Singapore,
where he consulted for a variety of companies. Dr. Lumia received a B.S. from
Cornell University and a M.S. and Ph.D. from the University of Virginia, all in
electrical engineering. He is the author of over 100 technical papers.
Randall A. Mackey, age 53,has been a director of Cimetrix since January 23,
1998. Mr. Mackey has been a shareholder of the Salt Lake City law firm of
Mackey, Price & Williams and its predecessor firms. From 1979 to 1989, he
practiced law with the Salt Lake City law firm of Fabian & Clendenin, where he
was a shareholder and director of the firm from 1982 to 1989. From 1977 to 1979
Mr. Mackey was associated with the Washington, D.C. law firm of Hogan & Hartson.
Mr. Mackey received a Bachelor of Science degree in Economics from the
University of Utah in 1968, a Master in Business Administration degree from
Harvard University in 1970, a Juris Doctor degree from Columbia University in
1975 and a Bachelor of Civil law degree from Oxford University in 1977. Mr.
Mackey has served as Secretary and a director since November 1995 of Paradigm
Medical Industries, Inc., which develops, manufactures and sells ophthalmic
surgical systems.
John W. ("Bill") Van Drunen, age 44, has been a director of Cimetrix since
May 16, 1998. Mr. Van Drunen is a Vice President at First Security Bank. He has
been with First Security Bank since 1993. Prior to this he was with Bank America
in various assignments from 1988 to 1993. He has a B.S. degree in Business
Management from Colorado State University.
Board Meetings and Committees
The Company's Board of Directors met twelve times during 1998. Each of
the Company's directors attended at least 75% of the meetings of the Board of
Directors. The Company's Board of Directors serves in its entirety as the
Nominating, Compensation and Audit Committees, with the exception of Mr.
Bilzerian, who does not serve on the Audit Committee.
All directors of the Company hold office until the next annual meeting
of shareholders and until their successors have been elected and qualified.
-3-
EXECUTIVE OFFICERS
The following table sets forth certain biographical information with
respect to the executive officers of the Company (biographical information for
Mr. Bilzerian is set forth above):
Name Age Title
Paul A. Bilzerian 48 President and Chief Executive Officer
David P. Faulkner 44 Executive Vice President of Marketing
Robert Reback 39 Executive Vice President of Sales
Michael D. Feaster 28 Vice President of Software Development
Steven K. Sorensen 40 Vice President and Chief Engineer
Riley G. Astill 38 Vice President of Finance, Chief Financial Officer
David P. Faulkner, Executive Vice President of Marketing, joined the
Company in August 1996. Mr. Faulkner was previously employed as the Manager of
PLC Marketing, Manager of Automotive Operations and District Sales Manager for
GE Fanuc Automation, a global supplier of factory automation computer equipment
specializing in programmable logic controllers, factory software and computer
numerical controls from 1986-1996. Mr. Faulkner has a B.S. Degree in Electrical
Engineering and a Masters Degree in Business Administration from Rensselaer
Polytechnic Institute.
Robert H. Reback, Executive Vice President of Sales, joined Cimetrix as
Vice President of Sales in January 1996 and was promoted to Executive Vice
President of Sales and Marketing in January, 1997. Mr. Reback was the District
Manager of Fanuc Robotics' West Coast business unit from 1994-1995. From
1985-1993 he was Director of Sales/Account Executives for Thesis, Inc., a
privately-owned supplier of factory automation software and was previously a
Senior Automation Engineer for Texas Instruments. Mr. Reback has a B.S. Degree
in Mechanical Engineering and a M.S. Degree in Industrial Engineering from
Purdue University.
Michael D. Feaster, Vice President of Software Development, joined the
company in April 1998, as Director of Customer Services. In December 1998, Mr.
Feaster was promoted to Vice President of Software Development. From 1994 to
1998, Mr. Feaster was employed at Century Software, Inc., as the Vice President
of Software Development, directing 25 engineers. Century Software, Inc., is a
global supplier of PC to UNIX connectivity software, specializing in internet
access of Windows to legacy mission critical applications. From 1988 to 1994 he
served as a software engineer contractor/subcontractor for such companies as
Fidelity Investments, IAT, Inc., NASA, and Mexico's Border Inspection Division.
Dr. Steven K. Sorensen, Vice President and Chief Engineer, joined the
Company in 1990. Prior to joining Cimetrix, Dr. Sorensen was an Associate
Professor at Brigham Young University, where he received his Ph.D. in Mechanical
Engineering. Dr. Sorensen has been working to develop the Cimetrix technology
for the past twelve years and is one of the principal architects of many of the
Company's most important products.
-4-
Riley G. Astill, Vice President of Finance, Chief Financial Officer,
originally joined Cimetrix as Controller, in July, 1994. He remained Controller
until October, 1996, when he left the Company prior to its moving to Tampa, FL.
Mr. Astill rejoined Cimetrix as Vice President of Finance in December, 1997. Mr.
Astill was Controller of a privately held Salt Lake City publisher from
1991-1994. From 1990-1991, he was a Senior Accountant for Oryx Energy Company.
From 1988-1990 he was an Accountant for Ernst & Young in Dallas. He has a B.S.
Degree in Accounting from the University of Utah and a Masters Degree in
Accounting from Utah State University.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Director Compensation
Directors of the Company receive no cash compensation, but are
reimbursed for expenses. Each director (but not including directors who are
officers or employees) is granted stock options to purchase 24,000 shares of
common stock at an exercise price per share in excess of the market price at the
time of grant. Vested options become exercisable six months after vesting. The
following table summarizes the options held by each of the Company's directors.
Director Number Exercise
Name of Options Price
Paul A. Bilzerian 0 n/a
Lowell K. Anderson 32,000 2.50
Dr. Ron Lumia 74,000 2.50
Randall A. Mackey 32,000 2.50
Bill Van Drunen 24,000 2.50
-5-
Executive Officer Compensation
The following table discloses compensation, for the three fiscal years
ended December 31, 1998, paid by the Company to the named executive officers
whose annual salary equals or exceeds $100,000 (collectively the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
--------------------Long-Term Compensation--------------------
---Annual Compensation-- ---------Awards---------- ----------Payout------------
Restricte Securities Long-term
Stock Underlying Incentive All Other
Name and Principal Position Year Salary($) Bonus Other Awards($) Options(#) Payout($) Compensation
- --------------------------- ---- ---------- ----- ----- --------- ---------- --------- ------------
Paul A. Bilzerian, President, 1998 120,000(1) 0 0 0 0 0 0
Chief Executive Officer 1997 90,000(1) 0 0 0 0 0 0
1996 50,000(1) 0 0 0 0 0 0
Robert H. Reback, Executive 1998 120,000 20,000 5,000 4,000 200,000 0 0
Vice President of Sales 1997 121,769 0 0 0 0 0 0
1996 115,000 15,000 0 0 0 0 0
David P. Faulkner, Executive 1998 100,000 5,000 5,000 0 100,000(2) 0 0
Vice President Marketing 1997 101,475 0 20,000 0 0 0 0
1996 35,483 0 0 0 0 0 0
(1) These amounts were paid or are owed to Bicoastal Holding Company for Mr.
Bilzerian's services. (See "Certain Relationships and Related Transactions.")
(2) Excludes 100,000 options which were awarded on February 1, 1999, subsequent
to the Company's fiscal year end December 31, 1998.
The following table sets forth certain information on option grants in
fiscal 1998 to the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Fiscal Year-End(#) Fiscal Year-End ($)
On Exercise Value ---------------------- --------------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------- -------------- ----------- ------------- ----------- -------------
Paul A. Bilzerian 0 0 0 (1) 0 0 0
Robert H. Reback 0 0 0 200,000 0 0
David P. Faulkner 0 0 0 100,000 (2) 0 0
(1) Excludes 27,500 warrants for Cimetrix common stock held indirectly by the
Paul A. Bilzerian and Terri L. Steffen Family Trust of 1995. Mr. Bilzerian
disclaims any beneficial ownership of these shares. See beneficial
ownership disclosure below.
(2) Excludes 100,000 options which were awarded on February 1, 1999,
subsequent to the Company's fiscal year end December 31, 1998.
-6-
REPORT ON EXECUTIVE OFFICER COMPENSATION
The Board of Directors reviewed and approved the compensation and fringe
benefits for the Company's officers, consisting of six persons. The Board
evaluates the performance of all officers, including the President and Chief
Executive Officer, and administers the Company's compensation program for
officers.
Compensation Philosophy
The Company's compensation philosophy for officers conforms to its
compensation philosophy for all employees generally. The Company's compensation
is designed to:
o Provide compensation comparable to that offered by companies with
similar business, allowing the Company to successfully attract and
retain the employees necessary to its long-term success.
o Provide compensation that rewards individual achievement and
differentiates among employees based upon individual performance.
o Provide incentive compensation that varies according to both the
Company's success in achieving its performance goals and the
employee's contribution to that success; and
o Provide an appropriate linkage between employee compensation and
the creation of shareholder value through awards that are tied to
the Company's financial performance and by facilitating employee
stock ownership.
In furtherance of these goals, the Company's officers' compensation comprises
salary, annual cash bonuses, long-term incentive compensation in the form of
stock options and various fringe benefits, including medical benefits and a
401(k) savings plan.
Salaries
The Board of Directors reviewed the salaries of all the officers of the
Company for fiscal year 1998. The Board of Directors made salary decisions
concerning the officers based upon a variety of considerations in conformance
with the compensation philosophy stated above. First, salaries were
competitively set relative to both other companies in the software industry and
other comparable companies. Second, the Board of Directors considered each
officer's level of responsibility and individual performance, including an
assessment of the person's overall value to the Company. Third, internal equity
among employees was factored into the decision. Finally, the Board of Directors
considered the Company's financial performance and its ability to absorb any
increases in salaries.
Bonuses
Each officer is eligible to receive an annual cash bonus that is
generally paid pursuant to an incentive compensation formula established at the
beginning of a year in connection with the preparation of the Company's
operating budget for the year. In formulating decisions with respect to cash
bonus awards, the Board of Directors evaluates each officer's role and
responsibility in the Company and other factors that the Board deems relevant to
motivate each officer to achieve strategic performance goals.
-7-
Stock Options
The Company has a stock option plan that is designed to align the
interests of the shareholders and the Company's officers in the enhancement of
shareholder value. Stock options are granted under the plan by an administrative
committee comprising disinterested members of the Board of Directors. In
general, stock options are granted at an exercise price not lower than the fair
market value of the Company's Common Stock on the date of grant. In formulating
its recommendations to the administrative committee for the stock option plan,
the Board of Directors evaluates the Company's overall financial performance for
the year, the desirability of long-term service from an officer and the number
of stock options held by other officers in the Company who have the same, more
or less responsibility. To encourage long-term performance, the stock options
granted in fiscal year 1998 vest ratably over a four-year period and expire up
to five years after the date of grant.
Chief Executive Officer Compensation
The total compensation of the President and Chief Executive Officer for
fiscal year 1998 was based on a contract between the Company and Bicoastal
Holding Company, which was approved by the shareholders on May 31, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 1, 1999 the Company entered into a new agreement with
Bicoastal Holding Company providing for the continued services of Paul A.
Bilzerian, as President of Cimetrix. The agreement provides that the Company is
to pay Bicoastal Holding Company for his services at a rate of $10,000 per month
for his services through December 31, 2000. In addition, the Company will
provide a $1,500 monthly living allowance and reimbursement for reasonable
travel expenses. A copy of this agreement is attached as Exhibit 1.
In February 1999, the Company entered into a six month lease, for $930
per month, for a residential property, which it provides rent-free to the
President and other employees as temporary accommodations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and greater than 10% shareholders to
file reports of ownership (on Form 3) and periodic changes in ownership (on
Forms 4 and 5) of Company securities with the Securities and Exchange
Commission. For the fiscal year 1998, the Company's officers and directors,
timely filed all required Forms 3, 4 and 5. The Company believes that its
officers and directors are current in their 16(a) reporting requirements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to beneficial
ownership of the Company's common stock (exclusive of options or warrants), as
of April 14, 1999, for (i) each executive officer of the Company; (ii) each
director of the Company; and (iii) each beneficial owner of more than 5% of the
Company's common stock; and (iv) all executive officers and directors as a
group:
Name of Person of Group Number of Shares Percent of Ownership
Paul Bilzerian 0 (1) 0% (1)
16229 Villarreal De Avila
Tampa, Florida 33613
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Overseas Holdings Ltd.Partnership 2,900,000 (1) 12.4% (1)
Park Tower, Suite 2630
400 North Tampa Street
Tampa, Florida 33602
1994 Bilzerian Irrevocable Trust 2,315,000 (2) 9.9% (2)
Park Tower, Suite 2630
400 North Tampa Street
Tampa, Florida 33602
Dr. Lowell K. Anderson 149,450 *
2842 North Foothill Drive
Provo, Utah 84604
Dr. Ron Lumia 4,000 *
443 Live Oak Loop NE
Albuquerque, New Mexico 87122
Randall A. Mackey - -
1474 Harvard Ave
Salt Lake City, Utah 84105
Bill Van Drunen 20,764 *
3391 Larchmont Drive
Salt Lake City, Utah 84109
Robert H. Reback 7,000 *
600 Daybreaker Drive
Park City, UT 84098
Michael D. Feaster - -
7577 South Butler Hills Dr.
Salt Lake City, UT 84121
David P. Faulkner - -
8803 South Willow Green Drive
Sandy, UT 84093
Riley G. Astill - -
2312 South 200 East
Bountiful, UT 84010
Officers and Directors (9 persons) 178,714 (1) * (1)
- ---------------------------------
* Less than 1%.
(1) As of April 14, 1999, Overseas Holdings Limited Partnership, whose general
partner is Overseas Holding Company, was the owner of 2,900,000 shares of the
Company's common stock, representing 12.4% of the Company's outstanding stock.
As of April 14, 1999 Bicoastal Holding Company was the owner of 180,000 shares
of the Company's common stock, representing 0.8% of the Company's outstanding
stock. Bicoastal Holding Company was also the owner of 27,500 warrants to
purchase the Company's common stock for $2.50 per share, representing .1% of the
Company's outstanding stock. As of April 14, 1999, the Paul A. Bilzerian
-9-
and Terri L. Steffen Family Trust of 1995 is the beneficial owner of 3,080,000
shares of the Company's stock and 27,500 warrants to purchase the Company's
stock, representing 13.3% of the Company's outstanding stock, because it is the
99% limited partner of Overseas Holdings Limited Partnership, and the owner of
100% of the stock of Overseas Holding Company, and the owner of 100% of the
stock of Bicoastal Holding Company. As of April 14, 1999, Paul A. Bilzerian may
be deemed the beneficial owner of these shares and warrants, because he is
married to Terri L. Steffen, the beneficiary of the Paul A. Bilzerian and Terri
L. Steffen Family Trust of 1995. The number of shares indicated for Mr.
Bilzerian also excludes shares held by the Paul A. Bilzerian and Terri L.
Steffen 1994 Irrevocable Trust for the Benefit of Adam J. Bilzerian and Dan B.
Bilzerian, (see footnote 2 below).
(2) The Paul A. Bilzerian and Terri L. Steffen 1994 Irrevocable Trust for the
Benefit of Adam J. Bilzerian and Dan B. Bilzerian owns 2,315,000 shares,
representing 9.9% of the Company's outstanding common stock. Adam J. Bilzerian
and Dan B. Bilzerian are the sons of Paul A. Bilzerian and Terri L. Steffen.
Paul A. Bilzerian and Terri L. Steffen disclaim any beneficial ownership of this
stock. The Trust is irrevocable and has independent trustees responsible for the
affairs of the Trust.
PROPOSAL NO. 2
RATIFICATION OF AGREEMENT WITH BICOASTAL HOLDING COMPANY
The Company wishes to retain Mr. Bilzerian's services through December
31, 2000. These services are to be contracted through Bicoastal Holding Company,
an affiliate of Mr. Bilzerian. Accordingly, pursuant to the proposed agreement,
the Company will pay Bicoastal Holding Company a rate of $10,000 per month for
Mr. Bilzerian's services, $1,500 per month for a living allowance and all
reasonable travel and living expenses which include at least one coach class
round-trip airfare per month to any destination in the United States to visit
his family.
This agreement also provides authorization for Mr. Bilzerian to make
special bonus payments, in the event of a sale of a majority of the common stock
of Cimetrix to a third party or the sale of substantially all of the assets of
Cimetrix. Such bonus payments shall not exceed 5% of the total sales price of
the Company's stock or assets, up to a maximum amount of $5,000,000. Such bonus
payments shall be payable to Cimetrix employees whom Mr. Bilzerian believes, in
his sole discretion, contributed most to the success of Cimetrix.
A copy of this agreement is attached as Exhibit 1.
-10-
PERFORMANCE GRAPH
The following graph shows a comparison of the three year cumulative
total return for the Company's Common Stock, the Nasdaq Stock Market (U.S.)
Index, and the Nasdaq Computer and Data Processing Stocks Index, assuming an
investment of $100 on December 1, 1994. The cumulative return of the Company was
computed by dividing the difference between the price of the Company's Common
Stock at the end and the beginning of the measurement period (December 1, 1994
to December 31, 1998) by the price of the Company's Common Stock at the
beginning of the measurement period.
[GRAPHIC OMITTED]
-11-
ANNUAL REPORT
A copy of the Company's Annual Report, including financial statements
for the years ended December 31, 1998, 1997 and 1996, is being mailed with this
Proxy Statement to shareholders of record on the Record Date.
INDEPENDENT AUDITORS
Tanner + Co., Certified Public Accountants, served as the Company's
independent auditors for 1998. One or more representatives of Tanner + Co. are
expected to be present at the Annual Meeting and will be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's
2000 Annual Meeting of Shareholders in next year's proxy statement must, in
addition to other applicable requirements, cause their proposals to be received
in writing by the Company at its address set forth on the first page of this
Proxy Statement no later than January 1, 2000. Such proposals should be
addressed to the Company's Secretary and may be included in next year's proxy
statement if they comply with certain rules and regulations promulgated by the
Securities and Exchange Commission.
OTHER MATTERS
Management knows of no matters other than those listed in the attached
Notice of the Annual Meeting which are likely to be brought before the Annual
Meeting. However, if any other matters should properly come before the Annual
Meeting or any adjournment thereof, the persons named in the enclosed proxy will
vote all proxies given to them in accordance with their best judgment of such
matters.
By Order of the Board of Directors,
/s/ Riley G. Astill
--------------------
Riley G. Astill
Vice President of Finance and Secretary
Salt Lake City, Utah
April 14, 1999
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EXHIBIT 1
AGREEMENT
THIS AGREEMENT is made effective this 1st day of April 1999, between
Bicoastal Holding Company, a Nevada corporation (hereinafter "BICOASTAL"), and
CIMETRIX Incorporated, a Nevada corporation located at 6979 South High Tech
Drive, Midvale, Utah 84047 (hereinafter "CIMETRIX").
RECITALS
Whereas, BICOASTAL employs Paul A. Bilzerian (hereinafter "Bilzerian")
under that certain employment agreement, dated January 1, 1998; and
Whereas, CIMETRIX desires to utilize Bilzerian from time to time as an
officer, director, and/or management consultant to CIMETRIX.
NOW, THEREFORE, in consideration of the mutual covenants and promises
of the parties, BICOASTAL and CIMETRIX covenant and agree as follows:
1. BICOASTAL agrees to provide Cimetrix with the full-time services of
Bilzerian for a fee of $10,000 per month from the effective date of this
Agreement until December 31, 2000.
2. Cimetrix agrees to provide Bilzerian with housing and the use of an
automobile during the term of this Agreement. In addition, Cimetrix agrees to
provide Bilzerian with a living allowance of $1,500 per month during the term of
this Agreement. Cimetrix also agrees to pay all reasonable travel expenses of
Bilzerian during the term of this Agreement. Reasonable travel expenses will
include at least one coach class round-trip airfare per month (or up to
twenty-one trips during the term of this Agreement) to any destination in the
United States to visit his family. Cimetrix also agrees to reimburse Bicoastal
for all reasonable costs incurred and paid for by Bicoastal, which were incurred
or paid for the benefit of Cimetrix.
3. Cimetrix agrees that, in the event of a sale of a majority of the
common stock of Cimetrix to a third party purchaser or the sale of substantially
all of the assets of Cimetrix during the term of this Agreement, Bilzerian will
be authorized to make special bonus payments, of up to a maximum total of $5
million, to be paid to those Cimetrix employees whom Bilzerian believes, in his
sole discretion, contributed most to the success of Cimetrix. Notwithstanding
the aforesaid, the special bonus payments can not exceed 5% of the total sales
price of the Company's stock or assets.
4. This written Agreement contains the sole and entire agreement
between the parties and will supersede any and all other agreements between the
parties. The parties acknowledge and agree that none of them has made any
representation with respect to the subject matter of this Agreement or any
representations inducing its execution and delivery except such representations
as are specifically set forth in this writing and the parties acknowledge that
they have relied on their own judgment in entering into the same. The parties
further acknowledge that any statements or representations that may have been
made by any of them to the other are void and of no effect and that none of them
has relied on such statements or representations in connection with its dealings
with the other.
5. It is agreed that no waiver or modification of this Agreement or of
any covenant, condition, or limitation contained in it will be valid unless it
is in writing and duly executed by the party to be charged with it, and that no
evidence of any waiver or modification will be offered or received in evidence
in any proceeding, arbitration, or litigation between the parties arising out of
or affecting this Agreement, or the rights or obligations of any party under it,
unless such waiver or modification is in writing, duly executed as above. The
parties agree that the provisions of this paragraph may not be waived except in
writing.
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6. The parties agree that it is their intention and covenant that this
Agreement and performance under it and all suits and special proceedings
relating to it will be construed in accordance with and under and pursuant to
the laws of the State of Florida and that in any action, or other proceeding
that may be brought arising out of, in connection with, or by reason of this
Agreement, the laws of the State of Florida will be applicable and will govern
to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.
7. The Agreement will be binding on and inure to the benefit of the
respective parties and their executors, administrators, heirs, personal
representatives, successors and assigns.
8. This Agreement will expire on December 31, 2000. There shall be no
right to terminate this Agreement for any reason by either party hereto unless
both parties agree in writing.
9. This Agreement is not assignable by either party without the written
consent of the other party.
10. The parties hereto irrevocably agree that the prevailing party of
any such legal action or proceeding will be entitled to reasonable attorneys
fees and costs, including any appeals.
11. If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall have no effect upon and shall not
impair the enforceability of any other provision of this Agreement.
12. The parties hereto warrant and represent that each has the legal
capacity to enter into this Agreement and CIMETRIX further represents that its
Board of Directors has authorized CIMETRIX to enter this Agreement.
13. All of the terms of this Agreement and the Agreement itself are
subject to the approval of the Cimetrix shareholders not later than May 15,
1999. In the event the Cimetrix shareholders fail to approve this Agreement, it
shall be deemed null and void.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement on
the dates set forth below.
BICOASTAL HOLDING COMPANY:
By
Paul A. Bilzerian, President Date
CIMETRIX, INC.:
By
Riley G. Astill, Vice President Date:
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