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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
CIMETRIX INCORPORATED
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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CIMETRIX INCORPORATED
April 25, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of the
Shareholders of Cimetrix Incorporated, which will be held on Saturday, May 31,
1997 at the Marriott Hotel, 75 South West Temple, Salt Lake City, Utah,
commencing at 9:00 a.m. Your Board of Directors and management look forward to
greeting personally those shareholders able to attend.
At the meeting, in addition to electing five (5) directors, your Board
is asking shareholders to approve an amendment to the 1994 Stock Option Plan,
to ratify the issuance of stock purchase warrants granted to the Company's new
Chief Financial Officer, to ratify the issuance of stock options to
non-employee directors, and to ratify a contract with Bicoastal Holding Company
for my continuing services to Cimetrix. These proposals are fully set forth in
the accompanying proxy statement which you are urged to read thoroughly. For
the reasons set forth in the proxy statement, your Board of Directors
recommends a vote "FOR" each of the proposals.
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.
Sincerely,
/s/ PAUL A. BILZERIAN
---------------------------------
Paul A. Bilzerian
President
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CIMETRIX INCORPORATED
100 N. TAMPA ST., SUITE 3550
TAMPA, FLORIDA 33602
_____________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MEETING DATE: MAY 31, 1997
TO OUR SHAREHOLDERS:
The Annual Meeting of the Shareholders of Cimetrix Incorporated, a
Nevada corporation (the "Company"), will be held at the Marriott Hotel, 75
South West Temple, Salt Lake City, Utah, commencing at 9:00 a.m., on May 31,
1997, to consider and vote on the following matters described in this notice
and the accompanying Proxy Statement:
1. To elect five (5) directors to the Company's Board of
Directors to serve for one-year terms.
2. To approve an amendment to the Cimetrix Incorporated 1994
Stock Option Plan, in order to increase the number of shares
of the Company's common Stock reserved for issuance thereunder
by 506,184 shares to an aggregate of 2,500,000 shares.
3. To ratify the issuance of warrants to purchase 325,000 shares
of the Company's common stock to David L. Redmond, the
Company's new Chief Financial Officer.
4. To ratify the issuance of options to purchase 132,000 shares
of the Company's common stock to non-employee directors of
the Company.
5. To ratify a contract with Bicoastal Holding Company for Paul
Bilzerian's continuing services to Cimetrix as its President.
6. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 30,
1997 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, 24,143,928 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.
If you plan to attend the Annual Meeting in person, we would
appreciate your response by indicating so at the appropriate place on the proxy
card enclosed.
By Order of the Board of Directors,
/s/ DAVID L. REDMOND
------------------------------------
David L. Redmond
Secretary
Tampa, Florida
May 2, 1997
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CIMETRIX INCORPORATED
100 N. TAMPA ST., SUITE 3550
TAMPA, FLORIDA 33602
________________________________
PROXY STATEMENT
_______________________________
ANNUAL MEETING OF SHAREHOLDERS
MEETING DATE: MAY 31, 1997
This Proxy Statement is being sent on or about May 5, 1997 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 1997 Annual Meeting of the Shareholders of the
Company, which will be held at the Marriott Hotel, 75 South West Temple, Salt
Lake City, Utah, on May 31, 1997, commencing at 9:00 a.m., and at any meetings
held upon adjournment thereof (the "Annual Meeting"). The record date for the
Annual Meeting is the close of business on April 30, 1997 (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 date, sign 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 (5) nominees
for election as directors as set forth in this Proxy Statement, for the
proposal to amend the Cimetrix Incorporated 1994 Stock Option Plan, for the
proposal to ratify the issuance of stock purchase warrants granted to David L.
Redmond, the Company's Chief Financial Officer, for the proposal to ratify the
issuance of stock options to the Company's non-employee directors, and for the
proposal to ratify a contract with Bicoastal Holding Company for Paul
Bilzerian's continuing services to Cimetrix, and as recommended by the Board of
Directors, in its discretion, with regard to all other matters which may
properly come before the Annual Meeting. The Company does not currently know
of any such other matters.
At the Record Date, there were 24,143,928 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
(5) 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 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.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 30, 1997, the number of
shares of the Company's common stock, par value $0.0001, held of record or
beneficially by each person who held of record or was known by Cimetrix to own
beneficially, more than 5% of the Company's common stock, and the name and
share holdings of each officer and director and of all officers and directors
as a group.
Amount and Nature of Ownership
-----------------------------------------------------
Sole Voting and Warrants and Percent of
Name of Person of Group Investment Power (1) Options (2) Class (3)(4)
- - ----------------------- -------------------- ----------- -------------
PRINCIPAL SHAREHOLDERS:
Shirlee Dastrup 500,000(5) 2.1%
6337 Highland Drive -0- 2.1%
Salt Lake City, Utah 84121
Lincoln and Linda Dastrup 2,328,100(5) 9.6%
871 Osmond Lane -0- 9.6%
Provo, Utah 84604
Paul Bilzerian and Terri Steffen 3,300,000(6) 13.7%
16229 Villarreal De Avila -0- 13.7%
Tampa, Florida 33613
Adam J. Bilzerian 1,200,000(7) 5.0%
16229 Villarreal De Avila -0- 5.0%
Tampa, Florida 33613
Dan B. Bilzerian 1,200,000(7) 5.0%
16229 Villarreal De Avila -0- 5.0%
Tampa, Florida 33613
Paul A. Bilzerian 8,206,112(5)(6) 34.0%
16229 Villarreal De Avila -0- 34.0%
Tampa, Florida 33613
OFFICERS AND DIRECTORS:
Paul A. Bilzerian 8,206,112(5)(6) 34.0%
-0- 34.0%
Douglas A. Davidson 55,000 0.2%
75,000 0.5%
Paul A. Johnson -0- 0.0%
10,000 0.1%
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Amount and Nature of Ownership
------------------------------------------------------
Sole Voting and Warrants and Percent of
Name of Person of Group Investment Power (1) Options (2) Class (3)(4)
- - ----------------------- -------------------- ----------- -------------
OFFICERS AND DIRECTORS (CONT.):
Dr. Ron Lumia 1,500 0.0%
75,000 0.3%
David L. Redmond 140,000 0.6%
375,000 2.1%
David P. Faulkner -0- 0.0%
150,000 0.6%
Robert H. Reback -0- 0.0%
120,000 0.5%
Andrea J. Berry -0- 0.0%
25,000 0.1%
Ron Hair -0- 0.0%
50,000 0.2%
Norman J. Ibrahim -0- 0.0%
50,000 0.2%
Dr. Steven Sorensen 274,390 1.1%
124,610 1.6%
Dr. Xuguang Wang 180,722 0.8%
219,278 1.6%
ALL OFFICERS AND DIRECTORS
AS A GROUP (12 PERSONS) 8,857,724 36.7%
1,273,888 39.9%
___________________________________________________________
(1) Except as otherwise indicated, to the best knowledge of the Company,
all stock is owned beneficially and of record, and each shareholder has sole
voting and investment power. In the case of Shirlee Dastrup and Lincoln and
Linda Dastrup, voting power is shared by proxy with Mr. Bilzerian.
(2) All options have been awarded under the Company's 1994 Stock Option Plan,
except: (i) those warrants granted to David L. Redmond, the Company's Chief
Financial Officer; (ii) those warrants granted to members of the advisory panel;
and (iii) those warrants held by former holders of notes payable by the Company
which warrants were issued in connection with the retirement of those notes
payable. The options issued under the stock option plan are exercisable at
prices ranging between $3.00 per share and $10.00 per share. They are
exercisable for up to five years from the date of grant and are subject to a
two-year vesting schedule. The 325,000 warrants held by David L. Redmond vest
ratably over two years from April 15, 1997 and are exercisable at $6.00 per
share. The warrants held by members of the advisory panel (450,000 in toto) are
fully vested and are exercisable at any time prior to September 15, 1999 at a
price of $3.00 per share. The warrants owned by former note holders (192,500 in
toto) are fully vested and were exercised on April 29, 1997 at a price of $2.00
per share.
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(3) The percentages shown are based on 24,143,928 shares of common stock of the
Company issued and outstanding as of April 30, 1997.
(4) The percentage ownership for the options held by the indicated individuals
is based on an adjusted total of issued and outstanding shares giving effect to
the assumed exercise of each individual's options, plus any shares owned by such
individuals.
(5) The number of shares indicated for Mr. Paul Bilzerian represents 4,806,112
shares for which Ms. Shirlee Dastrup and Linda and Lincoln Dastrup (2,828,100)
and Mr. W. Keith Seolas and family members (1,978,012), have granted the voting
rights by proxy to Mr. Bilzerian pursuant to an agreement between the Dastrup
family, the Seolas family and Mr. Bilzerian executed in March, 1994. Mr.
Bilzerian may be deemed to be the beneficial owner of all those shares pursuant
to the proxies, although he disclaims any beneficial interest in the shares
other than the right to vote them. Mr. Bilzerian holds the irrevocable proxies
to vote these shares for directors and on most ordinary matters presented to
shareholders, but not extraordinary matters, such as mergers, sales, or
dissolution. Ownership of shares held by W. Keith Seolas and his family members
are in dispute with the Company.
(6) Overseas Holdings Limited Partnership, a Nevada limited partnership (whose
general partner is Bicoastal Holding Company, a Cayman Islands corporation, and
whose limited partner is the Paul A. Bilzerian and Terri L. Steffen 1995
Revocable Family Trust), owns 3,000,000 shares of Cimetrix common stock.
Bicoastal Holding Company owns 400,000 shares of Cimetrix common stock. The
Paul A. Bilzerian and Terri L. Steffen 1995 Revocable Family Trust is the
beneficial owner of all the stock of Bicoastal Holding Company.
(7) Adam J. Bilzerian and Dan B. Bilzerian are the sons of Paul A. Bilzerian
and Terri L. Steffen. The Paul A. Bilzerian and Terri L. Steffen 1994
Irrevocable Trust for the Benefit of Adam J. Bilzerian and Dan B. Bilzerian owns
2.4 million shares of Cimetrix common stock. 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. 1: RATIFICATION OF AGREEMENT WITH BICOASTAL HOLDING COMPANY
On April 15, 1997, the Company entered into an Agreement with
Bicoastal Holding Company providing for the continued services of Paul A.
Bilzerian and Terri L. Steffen. Mr. Bilzerian has been a management consultant
to the Company since March, 1994 and has most recently served as the Company's
President and as a Director. Mr. Bilzerian holds the voting rights by proxy
from Ms. Shirlee Dastrup and Lincoln and Linda Dastrup of 2,828,100 shares of
Cimetrix common stock and from W. Keith Seolas and his family members of
1,978,012 shares of Cimetrix common stock. These proxies represent 4,806,112
common shares of Cimetrix or approximately 19.9% of the common shares
outstanding at April 30, 1997. Overseas Holdings Limited Partnership owns
3,000,000 shares of Cimetrix common stock as of April 30, 1997. Bicoastal
Holding Company owns 400,000 shares of Cimetrix common stock as of April 30,
1997. Mr. Bilzerian and his wife, Ms. Steffen, beneficially own Overseas
Holding Limited Partnership and Bicoastal Holding Company. Mr. Bilzerian's
beneficial ownership and the proxies he holds from the Dastrup and Seolas
families may be deemed to allow Mr. Bilzerian to vote 8,206,112 shares of
Cimetrix common stock or approximately 34.0% of the common shares of Cimetrix
outstanding as of April 30, 1997. Ms. Steffen, his wife, has also assisted the
Company in various administrative capacities since 1995. Pursuant to a
Consulting Agreement executed in March, 1994 and amended in June, 1994,
Bicoastal Holding Company received warrants to purchase 6,000,000 shares of the
Company's common stock for an aggregate price of $1,000,000 ($0.1667 per share)
in exchange for Mr. Bilzerian's services from March, 1994 through March, 1997.
Cimetrix common stock did not trade on any exchange in March, 1994 and did not
begin trading until December, 1994, when the opening trade was $1.00 per share.
Bicoastal Holding Company is an affiliate of Mr. Bilzerian and Ms. Steffen and
has exclusive employment contracts with them.
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The Company wishes to retain Mr. Bilzerian's and Ms. Steffen's
services for at least two more years. Accordingly, pursuant to the new
Agreement, the Company will pay Bicoastal Holding Company for their services at
the rate of $10,000 per month for Mr. Bilzerian's services and $4,000 per month
for Ms. Steffen's services. The Company may terminate the employment
arrangement at the end of any month.
Bicoastal, Overseas Holdings Limited Partnership and The Paul A.
Bilzerian and Terri L. Steffen 1994 Irrevocable Trust for the Benefit of Adam
J. Bilzerian and Dan B. Bilzerian are the holders of the 6,000,000 warrants
previously issued. As part of the Agreement, they have agreed to exercise all
of the warrants. Simultaneously, the Company agreed to repurchase 200,000
shares of stock from Bicoastal at a price of $5.00 per share, and Bicoastal
agreed to deliver, at no charge, 100,000 shares of the Company's stock to Cowen
& Company, the Company's investment advisers. Cowen & Company has been
assisting the Company with developing its business strategies since January,
1996, and the Company incurred costs of approximately $150,000 for their
services. This amount is significantly less than the normal fees for these
services. The Company believes that it is necessary to reward its investment
advisers for their efforts to date and to provide them with an incentive to
continue to assist the Company, but the Company does not wish to deplete its
cash reserves or to further dilute its shareholders' interests to accomplish
this goal. Accordingly, Bicoastal agreed to provide the shares to Cowen &
Company for the Company's benefit. The net effect of these provisions is to
provide Mr. Bilzerian's related entities with 5,700,000 shares of stock
pursuant to the exercise of the warrants, to reward the Company's investment
advisers for their efforts, and to return 200,000 shares to the Company's
treasury, all at no net cost to the Company. The transaction also has a
slightly anti-dilutive effect on the shareholders because the Company is able
to repurchase 200,000 shares at a market cost and the shares provided to Cowen
do not come from the Company.
The terms of the Agreement require approval by the shareholders of its
execution because of Mr. Bilzerian's position as a Director and President of
the Company. A copy of the Agreement is hereto attached as Exhibit 1. For
information about Mr. Bilzerian, see "Election of Directors - Biographical
Information."
The Board of Directors has authorized the execution of the Agreement
with Bicoastal Holding Company and recommends a vote FOR ratification of the
agreement.
PROPOSAL NO. 2: APPROVAL OF AMENDMENT TO STOCK OPTION PLAN
On March 24, 1997, the Board of Directors adopted an amendment to the
Company's Stock Option Plan (the "Plan") which became effective January 1,
1995. The Plan originally provided for the grant to directors, officers,
employees, and consultants of the Company of options to acquire up to 1,993,816
shares of the Company's common stock. At the Annual Meeting of Shareholders,
the shareholders are being asked to consider and approve the adoption of an
amendment to the Plan to add 506,184 shares to the option pool, making a total
of 2,500,000 shares of common stock available thereunder. The Company has
issued 1,801,213 options under the Plan and believes that additional shares are
needed for the Company to be able to continue to attract and retain key
employees. The essential features of the Plan are summarized below. A copy of
the Plan and the Amendment are attached hereto as Exhibit 2.
Purpose
The purpose of the Plan is to promote the interests of the Company and
its shareholders by enabling the Company to attract and retain, on a long-term
basis, key executives, employees, and outside consultants by providing them
with significant proprietary incentives based on the Company's long-term
success.
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Administration
The Plan is administered by a committee of the Board of Directors
designated to administer the Plan. The committee consists of Paul A. Bilzerian
and David L. Redmond. No compensation is paid to the committee members who
administer the Plan. No committee members charged with administrative duties
under the Plan may receive options under the Plan, although options under the
Plan may be used to replace options previously granted or contractually
promised prior to the date the committee members became committee members. The
interpretation and construction of the Plan by the committee is final and
conclusive.
Eligibility
The Plan provides that options may be granted to the Company's
officers, directors, employees, and consultants. The committee selects the
participants and determines the number of shares to be subject to each option.
In making such determinations, the participant's duties and responsibilities,
present and potential contributions to the Company's success, and other
relevant factors are considered. An optionee pays no consideration for the
grant of the option, but must continue to be employed by the Company in order
to realize any value from an option.
Option Terms
The terms of options granted are determined by the committee. Each
option is evidenced by a stock option agreement between the Company and the
participant. Each option is also subject to the following terms and
conditions:
(a) Vesting Schedule. Each participant earns the right to
exercise his option by continuing to perform services for the
Company for two years after the grant date. 50% of the option
vests one year after the grant date, and the remainder vests
two years after the grant date, subject to the earlier
termination of the option in the event of termination of
employment, death, or disability, and also subject to the
acceleration upon certain changes in control of the Company.
The committee can alter this vesting schedule in a particular
option agreement. An option is exercised by giving written
notice to the Company, specifying the number of shares to be
purchased and tendering to the Company the full purchase price
plus any tax withholding liability the Company may incur upon
exercise. The exercise price will be payable in cash or such
other form of consideration as the committee approves.
(b) Exercise Price. The exercise price of options granted under
the Plan is determined by the committee and for officers,
directors, or 10% shareholders, the exercise price must be not
less than 50% of the closing trade price of the Company's
stock on the date the option is granted. Exercise prices are
normally at the market price of the Company's stock at the
grant date. The Company's stock price was $5.875 on March 20,
1997.
(c) Termination of Employment. If an optionee's employment
relationship with the Company is terminated for reasons other
than death or disability, options held by such person cease to
be exercisable.
(d) Death or Disability of Optionee. If an optionee's employment
relationship with the Company terminates by reason of death or
disability, any option held by such optionee will be
exercisable as to the vested portion for one year from the
date of death or disability.
(e) Termination of Options. Unless otherwise provided in the
option agreement, all options granted will expire five years
after their grant dates.
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(f) Nontransferability of Options. Except in the event of death
or a transfer pursuant to a qualified domestic relations
order, an option is not transferable by an optionee. It is
exercisable only by the optionee or his former spouse during
the optionee's lifetime, and only by his heirs or executors,
pursuant to the laws of descent and distribution, following
his death.
(g) Other Provisions. An option agreement may contain such other
terms and conditions not inconsistent with the Plan as may be
determined by the committee.
Exchange of Options
The committee may accept surrenders of options and grant new options
in substitution therefor.
Adjustments in Capitalization
In the event of a stock split, reverse stock split, stock dividend, or
similar transaction with respect to the Company's common stock, which results
in a greater or lesser number of outstanding shares without receipt of
consideration, appropriate adjustment will be made to the aggregate number of
shares reserved for issuance under the Plan, as well as in the number of shares
subject to and the exercise price of all then outstanding options.
Changes in Control
If the Company sells all or substantially all its assets or is
acquired in a merger, tender offer transaction, or another type of
reorganization, the options will fully vest and become exercisable immediately
prior to such transaction.
Interpretation, Amendment and Termination
The committee has the authority to interpret the provisions of the
Plan and to resolve any issues arising under it, and may amend or terminate the
Plan at any time without shareholder approval; provided, however, that
shareholder approval is required for any amendment that materially increases
the maximum number of shares for which options may be granted, materially
alters eligibility requirements, or materially increases any benefits accruing
to participants. Further, no such amendment or termination may alter or impair
the rights of an optionee without his consent.
Tax Consequences
All options granted under the Plan are nonstatutory options, and will
not qualify for any special tax benefits. Under existing law, the options are
deemed to have no readily ascertainable value on the grant date, and the
optionee recognizes no taxable income on the date of grant. Upon exercise,
however, the difference between the market price of the stock and the exercise
price of the option is treated as ordinary income to the optionee and is
deductible at that time by the Company. However, if the optionee is an
officer, director, or ten-percent shareholder subject to the restrictions on
"short-swing" trading imposed by section 16 of the Securities Exchange Act of
1934, the date of income recognition and deduction may be deferred for at least
six additional months, and possibly longer. The optionee can avoid the tax
deferral by filing an election to be taxed on the exercise date, pursuant to
section 83(b) of the Internal Revenue Code. The income recognized upon
exercise by an employee is treated as wages subject to withholding, and in
order to exercise an option, the optionee who is an employee must pay to the
Company any withholding tax liability. Any resale of shares at a price above
the exercise price will generally result in capital gain.
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Plan Benefits
The following table illustrates the benefits or amounts that have been
received by or allocated to each of the listed persons or groups under the
Plan. The dollar value of the benefits under the Plan is indeterminable, and
will depend on such things as each participant's length of continued service
and option exercise price, as well as the value of the Company's stock on the
as-yet undefined option exercise dates.
PLAN BENEFITS
Cimetrix Incorporated Stock Option Plan
Name and Position Dollar Value Number of Shares
----------------- ------------ ----------------
Paul A. Bilzerian, President, Director n/a 0
Douglas A. Davidson, Director n/a 75,000
Paul A. Johnson, Director n/a 10,000
Dr. Ron Lumia, Director n/a 75,000
David L. Redmond, Director n/a 50,000
Robert H. Reback, Executive Vice
President of Sales & Marketing n/a 120,000
David P. Faulkner, Executive Vice
President of Operations n/a 150,000
Officer Group n/a 813,888
Non-Executive Director Group n/a 160,000
Non-Executive Employee Group n/a 487,000
The Board of Directors has adopted the amendment to the Company's
Stock Option Plan and recommends a vote FOR approval of the amendment.
PROPOSAL NO. 3: RATIFICATION OF ISSUANCE OF WARRANTS
On April 15, 1997, the Company agreed to issue to David L. Redmond,
its new Chief Financial Officer, stock purchase warrants that will enable him
to purchase 325,000 shares of the Company's stock for $6.00 per share. Mr.
Redmond has been a director of the Company since September, 1995. The stock
purchase warrants are similar to options issued under the Company's Stock
Option Plan, but they vest if the Company terminates Mr. Redmond's employment
and remain exercisable thereafter. If Mr. Redmond voluntarily terminates his
employment, the warrants are forfeited. The warrants are exercisable until June
30, 1999. The terms of the stock purchase warrants require approval by the
shareholders of their issuance because of Mr. Redmond's position as a Director
and Officer of the Company. A copy of the Mr. Redmond's Stock Purchase Warrant
is attached hereto as Exhibit 3. For information about Mr. Redmond, see
"Election of Directors - Biographical Information."
The Board of Directors has issued Mr. Redmond's stock purchase
warrants and recommends a vote FOR ratification of its action.
-8-
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PROPOSAL NO. 4: RATIFICATION OF ISSUANCE OF STOCK OPTIONS
Following the 1996 Annual Shareholders Meeting, Douglas A. Davidson
and Dr. Ron Lumia were each granted stock options to purchase 25,000 shares of
stock at an exercise price of $7.50 per share. On January 29, 1997, Paul A.
Johnson was granted options to purchase 10,000 shares of stock at an exercise
price of $7.50 per share. All of the options will be fully vested and
exercisable on May 31, 1997 (the date of the Annual Shareholders Meeting). The
committee has also agreed to issue options to purchase 24,000 shares of stock
to each of Douglas A. Davidson, Dr. Ron Lumia, and Paul A. Johnson for their
Board service for the year beginning May 31, 1997. The options will be
exercisable at a price of $6.00 per share. Those options will vest at the rate
of 2,000 per month, so that they will be fully vested and exercisable at the
1998 Annual Shareholders Meeting. Because the options have been and will be
issued to directors, the Board believes that the shareholders should have the
opportunity to ratify their issuance. Pursuant to authority delegated by the
Board, the Stock Option committee has issued the 1996 options and agreed to
issue the 1997 options, and the Board recommends a vote FOR ratification of its
action.
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ELECTION OF DIRECTORS
The Board of Directors has determined that the five (5) 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
Douglas A. Davidson Director March 1, 1995
Paul A. Johnson Director January 29, 1997
Dr. Ron Lumia Director January 1, 1996
David L. Redmond Executive Vice President, September 20, 1995
Chief Financial Officer and
Director
For additional biographical information concerning these individuals,
see "Biographical Information."
The Company's Board of Directors met twelve times during 1996. 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. All issues normally addressed by
these committees are addressed by the full Board of Directors during their
meetings.
All directors of the Company hold office until the next annual meeting
of shareholders and until their successors have been elected and qualified.
Directors who are not employees of the Company receive no cash
compensation, but are reimbursed for expenses. Douglas A. Davidson and Dr. Ron
Lumia were each granted stock options on August 24, 1996 (the date of the 1996
Annual Shareholders Meeting) to purchase 25,000 shares of common stock at an
exercise price of $7.50 per share, which vest and become exercisable on the
date of the 1997 Annual Shareholders Meeting. Paul A. Johnson was granted
stock options on January 29, 1997 to purchase 10,000 shares of common stock at
an exercise price of $7.50 per share, which vest and become exercisable on the
date of the 1997 Annual Shareholders Meeting.
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BIOGRAPHICAL INFORMATION
There is no family relationship among the current directors and
executive officers. The following sets forth brief biographical information
for each director of Cimetrix.
Paul A. Bilzerian, President, Chief Executive Officer and Director, age 46, 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. 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.
Douglas A. Davidson, age 58, is Chairman of the Board of PubNetics, Inc., an
electronic publishing software company and has been managing partner, since
1991, of Pensar, a consulting company that provides executive and consulting
services to information and technology companies. During 1993 and 1994, he
served as a consultant to and, later, Executive Vice President for XVT
Software, Inc. of Boulder, Colorado, a leader in cross platform Graphical User
Interface building tools. From 1989 to 1991, Mr. Davidson served as President
and Vice Chairman for Network Management, Inc., a privately-held systems
integration and services company specializing in network management for local
and wide area networks. Prior to 1989, Mr. Davidson had other similar
executive experiences with Honeywell Information Systems, Mohawk Data Sciences,
Display Data Corporation, and Science Management Corporation for over 20 years.
He received a Bachelor of Arts in Business Administration and Economics from
Colby College in 1960.
Paul A. Johnson, age 41, has been the Director of Consulting for Object Space,
Inc. since January, 1996. He was a Vice President-Project Engineer for
Citibank, N.A. during 1995 and a Senior Consultant with Rothwell International
during 1994. From 1992-1994, he was a Senior Software Engineer with Thesis,
Inc. and from 1985-1992 was a Staff Engineer with Martin Marietta Astronautics.
Mr. Johnson has a B.S. Degree in Physics from the United States Military
Academy in West Point, N.Y. and a M.S. Degree in Mechanical Engineering from
Georgia Institute of Technology.
Dr. Ron Lumia, age 46, 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.
David L. Redmond, Executive Vice President, Chief Financial Officer and
Director, age 45, joined Cimetrix as Executive Vice President and Chief
Financial Officer in February, 1997. He has been a Director of Cimetrix since
September 20, 1995. Mr. Redmond was Executive Vice President and Chief
Financial Officer of Pharmacy Corporation of America ("PCA") from 1995-1997.
From 1991-1995, he was Senior Vice President and Chief Financial Officer of
Pharmacy Management Services, Inc., a publicly- held company which was acquired
by PCA in June, 1995. Mr. Redmond spent approximately 16 years with KPMG Peat
Marwick, including 6 years as Partner in Charge of KPMG's High Technology
Practice in Florida. He was also a member of KPMG's High Technology Group.
Mr. Redmond is a Certified Public Accountant and has a B.S. Degree in
Accounting from the University of North Dakota.
-11-
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EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table discloses compensation paid to the named Executive
Officers for the three fiscal years ended December 31, 1996 by the Company's
executive officers whose annual salary equals or exceeds $100,000 ("Named
Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL -------------
COMPENSATION SECURITIES
-------------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION(1)
- - --------------------------- ---- ------------ ------------- -------------- ---------------
Paul A. Bilzerian, President and 1996 $ 50,000(2) - - -
Chief Executive Officer 1995 36,000(2) - - -
1994 8,000(2) - 6,000,000 -
Robert H. Reback, Executive Vice 1996 115,000 15,000 120,000 -
President of Sales & Marketing 1995 - - - -
1994 - - - -
David P. Faulkner, Executive Vice 1996 35,483 - 150,000 -
President of Operations 1995 - - - -
1994 - - - -
(1) The amounts disclosed in this column consist only of Company contributions
under the Company's 401(k) plan, and term life insurance premiums and in the
aggregate are less than 10% of total salary and bonus.
(2) These amounts were paid to Bicoastal Holding Company for Mr. Bilzerian's
services.
COMPENSATION PURSUANT TO STOCK OPTIONS
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information on option grants in
fiscal 1996 to the Named Executive Officers.
Individual Grants
----------------------------------------
Number of Percent of Potential Realizable
Securities Total Options Value at
Underlying Granted to Exercise Assumed Annual Rates of Stock
Options Employees in Price Expiration Price Appreciation for Option Term(2)
Name Granted (#)(1) Fiscal Year ($/Share) Date 0%(5) 5%($) 10%($)
- - ---- -------------- ------------ --------- ----- ----- ----- ------
Robert H. Reback 50,000 9.7% 9.00 01/01/01 0 124,325 274,730
50,000 9.7% 9.00 04/22/01 0 124,325 274,730
20,000 3.9% 7.50 08/26/01 0 41,442 91,577
David P. Faulkner 150,000 29.1% 7.00 08/05/01 0 290,096 641,036
(1) All options listed were granted pursuant to the 1994 Stock Option Plan.
Option exercise prices are generally at the market price when granted. The
options have terms of 5 years and vest over two years. The exercise price
and federal tax withholding may be paid in cash or with shares of Cimetrix
stock already owned.
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16
(2) The table above provides information regarding stock options that were
granted during fiscal year 1996 to the executive officers listed in the
Summary Compensation Table. The table also shows hypothetical values of
the granted options at the end of the option terms (five years), assuming
that the price of the Company's Common Stock appreciates annually at the
compounded rates of 5% and 10%, using the exercise price of each option as
the beginning price. The real value of the options in this table depends
on the actual appreciation of the value of the Company's Common Stock. No
assurance exists that the price of the Company's Common Stock will
appreciate at the rates assumed in the table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following provides information on option exercises in fiscal 1996 by
the Named Executive Officers and the value of such officers' unexercised
options at December 31, 1996.
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Fiscal Year-End(#) Fiscal Year-End ($)
On Exercise Value ---------------------------- ---------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- ------- ----------- ------------- ----------- -------------
Paul A. Bilzerian 0 0 6,000,000(1) 0 $ 39,500,000(1) 0
Robert H. Reback 0 0 0 120,000 0 0
David P. Faulkner 0 0 0 150,000 0 0
(1) Includes warrants for 2.4 million shares of Cimetrix stock, with a value of
unexercised in-the-money options at fiscal year end of $15,800,000, held by
the Paul A. Bilzerian and Terri L. Steffen 1994 Irrevocable Trust for the
Benefit of Adam J. Bilzerian and Dan B. Bilzerian. Paul A. Bilzerian and
Terri L. Steffen disclaim any beneficial ownership of these warrants. The
Trust is irrevocable and has independent trustees responsible for the
affairs of the Trust.
REPORT ON EXECUTIVE OFFICER COMPENSATION
The Board of Directors reviewed and approved the compensation and fringe
benefits for the Company's officers, consisting of approximately 9 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:
. 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.
. Provide compensation that rewards individual achievement and
differentiates among employees based upon individual performance.
. 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
. 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.
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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 1996. 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.
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
stockholder value. Stock options are granted under the plan by an
administrative committee comprising disinterested members of the Board of
Directors. The President and Chief Executive Officer does not participate in
the Company's stock option plan because he received substantial warrants in
1994 when he signed a services agreement with the Company. 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 1996 vest ratably over a two-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 1996 was based on his duties and responsibilities and in light
of the substantial warrants he received in 1994.
BOARD OF DIRECTORS
-14-
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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. Prior to December 1, 1994, there was
no public trading market for Cimetrix Common Stock, and hence, no reliable
information from which to establish "high" and "low" bids. 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, 1996) by the price of the Company's
Common Stock at the beginning of the measurement period.
-15-
19
COMPARISON OF 25 MONTH CUMULATIVE TOTAL RETURN*
AMONG CIMETRIX INCORPORATED, THE NASDAQ STOCK MARKET-US INDEX
AND THE NASDAQ COMPUTER & DATA PROCESSING INDEX
12/01/94 12/94 12/95 12/96
-------- ----- ----- -----
Cimetrix Incorporated 100 200 289 200
Nasdaq Stock Market-US 100 100 142 174
Nasdaq Computer & Data Processing 100 101 154 190
* $100 INVESTED ON 12/01/94 IN STOCK OR ON
11/30/94 IN INDEX - INCLUDING REIVESTMENT OF
DIVIENDS. FISCAL YEAR ENDED DECEMBER 31.
-16-
20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SERVICES AGREEMENT
On March, 1994, Cimetrix hired Paul A. Bilzerian to perform consulting
services. The Company was in financial crisis and turned to Mr. Bilzerian
because of his extensive prior business and management experience. As a
condition of his agreement to provide consulting services to Cimetrix, Mr.
Bilzerian received proxies to vote all shares held by the Company's former
management. The proxies are irrevocable until December 31, 1998. Bicoastal
Holding Company, an affiliate of Mr. Bilzerian, also received warrants to
acquire 6,000,000 shares of the Company's common stock. The warrants were
exercisable at any time before June 1, 1999, for an aggregate price of
$1,000,000 ($0.1666 per share). Mr. Bilzerian received no cash compensation
from the Company, other than expense reimbursements until late 1994, when the
Board voted to pay his company, Bicoastal Holding Company, $2,000.00 per month
for his services. In a supplemental consulting agreement dated August 8, 1995,
the Company renegotiated its contract with Mr. Bilzerian in order to retain his
services for an extended period of time and requested him to temporarily
relocate his family to Provo, Utah. In connection with the renegotiation,
Bicoastal Holding Company was paid $50,000 annually until March 31, 1997, and
Mr. Bilzerian had rent-free use of the Company's residence in Provo, Utah from
August, 1995 until June, 1996. The Company's residence was sold in December,
1996. Mr. Bilzerian is currently serving as President of the Company (see
Proposal No. 1).
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 and the New York Stock Exchange. Based solely on its review of
copies of such forms and such written representations regarding compliance with
such filing requirements as were received from its executive officers,
directors and greater than 10% shareholders (if any), the Company believes that
all such Section 16(a) filing requirements were complied with during 1996,
except as described below in this paragraph. Andrea J. Berry, David P.
Faulkner and Ronald E. Hair joined the Company during 1996 and failed to timely
file an initial or annual statement of beneficial ownership. They each filed
an annual statement of beneficial ownership on February 20, 1997, five days
after the due date. Dr. Steven Sorensen and Dr. Xuguang Wang filed their
annual statement of beneficial ownership on February 20, 1997, five days after
the due date. Robert H. Reback filed an annual statement of beneficial
ownership on February 27, 1997, twelve days after the due date. Douglas A.
Davidson and Dr. Ron Lumia, directors of the Company, filed their annual
statements of beneficial ownership on February 27, 1997 and March 31, 1997,
respectively, which were twelve days and forty-four days, respectively, after
the due date. Shirlee Dastrup and Lincoln and Linda Dastrup (10% shareholders)
filed their annual statements of beneficial ownership on March 12, 1997,
twenty-five days after the due date.
ANNUAL REPORT
A copy of the Company's Annual Report, including financial statements
for the years ended December 31, 1996, 1995 and 1994, is being mailed with this
Proxy Statement to shareholders of record on the Record Date.
INDEPENDENT AUDITORS
Pritchett, Siler & Hardy served as the Company's independent auditors
for 1996. One or more representatives of Pritchett, Siler & Hardy are expected
to be present at the Annual Meeting, will have an opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions.
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SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's
1998 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 November 10, 1997. 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
PRESENTED BY MANAGEMENT
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.
PRESENTED BY SHAREHOLDERS
Pursuant to the Bylaws of the Company, only such business shall be
conducted, and only such proposals shall be acted upon, at an annual meeting of
shareholders as are properly brought before the meeting. For business to be
properly brought before an annual meeting by a shareholder, in addition to any
other applicable requirements, timely notice of the matter must be first given
to the Secretary of the Company. To be timely, written notice must be received
at the principal executive offices of the Company not less than 60 days nor
more than 120 days prior to the scheduled meeting; provided, however, that if
less than 70 days' notice or prior public disclosure of the date of the
scheduled meeting has been given to shareholders, then notice of the proposed
business matter must be received not later than 10 days after the mailing of
notice of the meeting or such public disclosure. Any notice to the Secretary
must include as to each matter the shareholder proposes to bring before the
meeting: (a) a brief description of the proposal desired to be brought before
the meeting and the reason for conducting such business at the annual meeting,
(b) the name and record address of the shareholder proposing such business and
any other shareholders known by such shareholder to be supporting such
proposal, (c) the class and number of shares of the Company which are
beneficially owned by the shareholder on the date of such shareholder notice
and by other shareholders known by such shareholder to be supporting such
proposal on the date of such shareholder notice, and (d) any financial interest
of the shareholder in such proposal.
Each shareholder is urged to complete, date, sign and promptly return
the enclosed proxy card. Any questions should be addressed to Investor
Relations, at 100 N. Tampa St., Suite 3550, Tampa, Florida 33602, telephone
(813)277-9199.
/s/ DAVID L. REDMOND
---------------------------------------
David L. Redmond
Secretary
Tampa, Florida
May 2, 1997
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EXHIBIT 1
AGREEMENT
THIS AGREEMENT is made effective this 21st day of March, 1997, between
Bicoastal Holding Company, a Cayman Islands corporation (hereinafter
"BICOASTAL"), and CIMETRIX Incorporated, a Nevada corporation located at 100
North Tampa Street, Suite 3550, Tampa, Florida 33602 (hereinafter "CIMETRIX").
RECITALS
Whereas, BICOASTAL employs Paul A. Bilzerian (hereinafter "Bilzerian")
under that certain employment agreement, dated January 1, 1993; and
Whereas, CIMETRIX desires to utilize Bilzerian from time to time as an
officer, director, and/or management consultant to CIMETRIX; and
Whereas, CIMETRIX desires to utilize other BICOASTAL employees for
various tasks and projects.
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 exercise its warrants to purchase six
hundred thousand shares of Cimetrix stock and BICOASTAL hereby represents that
the present owners of the remaining warrants to purchase five million four
hundred thousand shares of Cimetrix common stock have agreed to exercise their
warrants for a collective exercise price of one million dollars.
2. CIMETRIX agrees to purchase from BICOASTAL two hundred
thousand (200,000) shares of Cimetrix stock for $5.00 per share.
3. BICOASTAL agrees to give Cowen & Company, Cimetrix's
investment advisor, one hundred thousand (100,000) shares of Cimetrix common
stock.
4. BICOASTAL agrees to provide the full-time services of
Bilzerian for a fee of $10,000 per month, and/or Terri L. Steffen for a fee of
$4,000 per month, both of which shall be subject to the unilateral termination
by Cimetrix on a month-to-month basis. This written Agreement contains the
sole and entire
-1-
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agreement between the parties and shall 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 shall 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 shall 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.
6. The parties agree that it is their intention and covenant that
this Agreement and performance under it and all suits and special proceedings
related to it 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 shall be applicable and shall
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 shall 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 shall expire on March 21, 1999. 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.
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10. The parties hereto irrevocably agree that any legal action or
proceeding hereunder, arising out of or in any manner relating to this
Agreement, will be brought in the Federal District Court for the Middle
District of Florida. The prevailing party of any such legal action or
proceeding shall 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 June 1,
1997. In the event the Cimetrix shareholders fail to approve this Agreement,
all of the transactions described herein shall be deemed rescinded.
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:
---------------------------------- ---------------------------
David L. Redmond Date
Executive Vice President
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EXHIBIT 2
CIMETRIX INCORPORATED
STOCK OPTION PLAN
This Stock Option Plan ("Plan") is created as of January 1, 1995, by
Cimetrix Incorporated, a Nevada Corporation, for the benefit of each person who
becomes a participant in the Plan.
1. Purpose; Effective Date.
(a) The purpose of this Plan is to provide long-term
incentive compensation to certain employees, directors, officers and
consultants, so that the Company may attract and retain the services
of qualified persons on whom the Company will depend for its continued
success.
(b) This Plan will become effective on the later of (i)
January 1, 1995; or (ii) the date the Plan is adopted by the Company's
Board of Directors; provided, however, that unless approved by the
Company's stockholders within 12 months after the effective date, this
Plan and any options granted pursuant to it shall be void ab initio.
2. Certain Definitions. Unless the context otherwise
requires, the following defined terms (together with other capitalized terms
defined elsewhere in this Plan) will govern the construction of this Plan, and
of any stock option agreements entered into pursuant to this Plan:
(a) "10% Stockholder" means a person who owns, either
directly or indirectly by virtue of the ownership attribution
provision set forth in Section 424(d) of the Code at the time he or
she is granted an Option, stock possessing more than ten percent (10%)
of the total combined voting power or value of all classes of stock of
the Company and/or of its subsidiaries.
(b) "1933 Act" means the Federal Securities Act of 1933,
as amended.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1956, as
amended.
(e) "Committee" means a committee appointed by the Board,
to administer and interpret this Plan; provided that the term
"Committee" will refer to the Board during such times as no Committee
is appointed by the Board.
(f) "Company" means Cimetrix Incorporated, a Nevada
Corporation.
(g) "Disability" has the same meaning as "permanent and
total disability," as defined in Section 22(e)(3) of the Code.
(h) "Eligible Participants" means persons who, at a
particular time, are employees, officers, consultants, or directors of
the Company or its subsidiaries.
(i) "Option" means an option granted pursuant to this
Plan entitling the option holder to acquire shares of Stock issued by
the Company pursuant to the valid exercise of the option.
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(j) "Option Agreement" means an agreement between the
Company and an Optionee, in form and substance satisfactory to the
Committee in its sole discretion, consistent with this Plan.
(k) "Option Price" with respect to any particular Option
means the exercise price at which the Optionee may acquire each share
of the Option Stock called for under such Option.
(l) "Option Stock" means Stock issued or issuable by the
Company pursuant to the valid exercise of an Option.
(m) "Optionee" means an Eligible Participant to whom
Options are granted hereunder, and any transferee thereof pursuant to
a Transfer authorized under this Plan.
(n) "Plan" means this Stock Option Plan of the Company.
(o) "QDRO" has the same meaning as "qualified domestic
relations order" as defined in Section 414(p) of the Code.
(p) "Stock" means shares of the Company's Common Stock
$0.0001 par value.
(q) "Subsidiary" has the same meaning as "Subsidiary
Corporation" as defined in Section 424(f) of the Code.
(r) "Transfer," with respect to Option Stock, includes,
without limitation, a voluntary or involuntary sale, assignment,
transfer, conveyance, pledge, hypothecation, encumbrance, disposal,
loan, gift, attachment or levy of such Option Stock, including without
limitation an assignment for the benefit of creditors of the Optionee,
a transfer by operation of law, such as a transfer by will or under
the laws of descent and distribution, an execution of judgments
against the Option Stock or the acquisition of record or beneficial
ownership thereof by a lender or creditor, a transfer pursuant to a
QDRO, or to any decree of divorce, dissolution or separate
maintenance, any property settlement, any separation agreement or any
other agreement with a spouse (except for estate planning purposes)
under which a part or all of the shares of Option Stock are
transferred or awarded to the spouse of the Optionee or are required
to be sold; or a transfer resulting from the filing by the Optionee of
a petition against such Optionee, under the bankruptcy laws of the
United States or of any other nation.
3. Eligibility. The Company may grant Options under this Plan
only to persons who are Eligible Participants as of the time of such grant.
Subject to the provisions of sections 4(d), 5 and 6 hereof, there is no
limitation on the number of Options that may be granted to an Eligible
Participant. Nothing herein contained shall require the Company to grant any
Option to any Eligible Participant, and the Company's decision whether to do so
shall be solely in the Committee's discretion.
4. Administration.
(a) Committee. The Committee, if appointed by the Board,
will administer this Plan. If the Board, in its discretion, does not
appoint such a Committee, the Board itself will administer this Plan
and take such other actions as the Committee is authorized to take
hereunder in the same manner as the Board may take other actions under
the Company's Charter and By-laws generally.
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(b) Authority and Discretion of Committee. The
Committee will have full and final authority in its discretion, at any
time and from time to time, subject only to the express terms,
conditions and other provisions of the Company's Charter, By-laws, and
this Plan, and the specific limitations on such discretion set forth
herein:
(i) to select and approve the persons who will be granted
Options under this Plan from among the Eligible Participants,
and to grant to any person so selected one or more Options to
purchase such number of shares of Option Stock as the
Committee may determine;
(ii) to determine the period or periods of time during
which options may be exercised, the Option Price and the
duration of such Options, and other matters to determine by
the Committee in connection with specific Option grants and
Option Agreements as specified under this Plan; and
(iii) to interpret this Plan, to prescribe, amend and rescind
rules and regulations relating to this Plan, and to make all
other determinations necessary or advisable for the operation
and administration of this Plan.
(c) Limitation on Authority. Notwithstanding the
foregoing, or any other provision of this Plan, the Committee will
have no authority to grant Options to any of its members, whether or
not approved by the Board.
(d) Option Agreements. Options will be deemed
granted hereunder only upon the execution and delivery of an Option
Agreement by the Optionee and a duly authorized officer of the
Company, and a Spousal Consent, if the Optionee is married. Options
will not be deemed granted hereunder merely upon the authorization of
such grant by the Committee.
5. Shares Reserved for Options.
(a) Option Pool. The aggregate number of shares of
Options Stock that may be issued pursuant to the exercise of Options
granted under this Plan will not exceed One Million Nine Hundred
Ninety-three Thousand Eight Hundred Sixteen (1,993,816) shares of
Stock (the "Option Pool"), provided that such number will be increased
by the number of shares of Option Stock that the Company subsequently
may reacquire through repurchase or otherwise. Shares of Option Stock
that would have been issuable pursuant to Options, but that are no
longer issuable because all or part of those Options have terminated
or expired, will be deemed not to have been issued for purposes of
computing the number of shares of Option Stock remaining in the Option
Pool and available for issuance.
(b) Adjustments Upon Changes. In the event of any
change in the outstanding Stock of the Company as a result of a stock
split, reserve stock split, stock dividend, recapitalization,
combination or reclassification, appropriate proportionate adjustments
will be made in: (i) the aggregate number of shares of Option Stock
in the Option Pool that may be issued pursuant to the exercise of
Options granted hereunder; (ii) the Option Price and the number of
shares of Option Stock called for in each outstanding Option granted
hereunder; and (iii) other rights and matters determined on a per
share basis under this Plan or any Option Agreement hereunder. Any
such adjustments will be made only by the Board, and when so made will
be effective, conclusive and binding for all purposes with respect to
this Plan and all Options then outstanding. No such adjustments will
be required by reason of the
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issuance or sale by the Company for cash or other consideration of
additional shares of its Stock or securities convertible into or
exchangeable for shares of its Stock.
6. Terms of Stock Option Agreements. Each option granted
pursuant to this Plan will be evidenced by an agreement (an "Option Agreement")
between the Company and the person to whom such Option is granted, in form and
substance satisfactory to the Committee in its sole discretion, consistent with
this Plan. Without limiting the foregoing, each Option Agreement (unless
otherwise stated therein) will be deemed to include the following terms and
conditions:
(a) No Promise of Employment. Nothing contained in this
Plan, any Option Agreement or in any other agreement executed in
connection with the granting of an Option under this Plan will confer
upon any Optionee any right with respect to the continuation of his or
her status as an employee of, consultant or independent contractor to,
or director of, the Company or its subsidiaries.
(b) Vesting Periods. Unless the Option Agreement
executed by an Optionee expressly otherwise provides and except as set
forth herein, the right to exercise an Option granted hereunder will
be subject to the following Vesting Periods, subject to the Optionee
continuing to be an Eligible Participant and the occurrence of any
other event (including the passage of time) that would result in the
cancellation or termination of the option:
(i) no portion of the Option will be exercisable prior to
the first anniversary of the grant date set forth in the
Option Agreement;
(ii) the Option will become exercisable on a cumulative
basis as to fifty percent (50%) of the Option Stock on each of
the first and second anniversaries of such grant date, so that
the Option will have become fully exercisable, subject to the
Optionee's remaining an Eligible Participant, on the second
anniversary of such grant date.
(c) Exercise of the Option.
(i) Mechanics and Notice. An Option may be exercised
to the extent exercisable (1) by giving written notice of
exercise to the Company, specifying the number of shares of
Option Stock to be purchased and accompanied by full payment
of the Option Price thereof and the amount of withholding
taxes pursuant to subsection 6(c)(ii) below; and (2) by giving
assurances satisfactory to the Company that the shares of
Option Stock to be purchased upon such exercise are being
purchased for investment and not with a view to resale in
connection with any distribution of such shares in violation
of the 1933 Act; provided, however, that in the event the
Option Stock is registered under the 1933 Act, or in the event
resale of such Option Stock without such registration would
otherwise be permissible, this second condition will be
inoperative if, in the opinion of counsel for the Company,
such condition is not required under the 1993 Act, or any
other applicable law, regulation or rule of any governmental
agency.
(ii) Withholding Taxes. As a condition to the issuance of
the shares of Option Stock upon full or partial exercise of an
Option granted under this Plan, the Optionee will pay to the
Company in cash, or in such other form as the Committee may
determine in its discretion, the amount of the Employee's tax
withholding liability required in connection with such
exercise. For purposes of this subsection 6(c)(ii), "tax
withholding liability" will mean all federal and state income
taxes, social security and unemployment taxes, and any other
taxes applicable to
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the compensation income arising from the transaction required
by applicable law to be withheld by the Company.
(d) Payment of Option Price. Each Option Agreement will
specify the Option Price with respect to the exercise of the Option
and the purchase of Option Stock thereunder, to be fixed by the
Committee in its discretion, but in no event will the Option Price
hereunder be less than 50% of the closing trade price of the Company's
common stock on the date the Option is granted; provided, however,
that this restriction shall apply only to Options granted to officers,
directors and 10% shareholders. The Option Price will be payable to
the Company in United States legal tender in case of payment by check,
or in such other form of legal consideration as may be approved by the
Committee, in its discretion.
(e) Termination of the Option. Except as otherwise
provided herein, each Option Agreement will specify the period of
time, to be fixed by the Committee in its discretion, during which the
Option granted therein will be exercisable (the "Option Period");
provided that the Option Period will not exceed five years from the
date of the grant, and if no Option Period is specified in the Option
Agreement, the Option Period shall be deemed to be five years from the
date of grant. To the extent not previously exercised, each Option
will terminate upon the expiration of the Option Period specified in
the Option Agreement; provided, however, that each such Option will
terminate, if earlier: (i) on the date that the Optionee ceases to be
an Eligible Participant for any reason, other than by reason of death
or disability; or (ii) twelve months after the date that the Optionee
ceases to be an Eligible Participant by reason of such person's death
or disability. In the event of a sale of all or substantially all of
the assets of the Company, or a merger or consolidation or other
reorganization in which the Company is not the surviving corporation,
or in which the Company becomes a subsidiary of another corporation (a
"Corporate Transaction"), then notwithstanding anything else herein,
the right to exercise all then outstanding Options will vest
immediately prior to such Corporate Transaction and will terminate
immediately after such Corporate Transaction.
(f) Options Nontransferable. No Option will be
transferable by the Optionee otherwise than by will or the laws of
descent and distribution, or pursuant to a QDRO. During the lifetime
of the Optionee, the Option will be exercisable only by the Optionee,
or the transferee if there has been a Transfer pursuant to a QDRO.
(g) Qualification of Stock. If, at any time, the Board
determines, in its discretion, that the listing, registration or
qualification of the Option Stock upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory authority, is necessary or desirable as a
condition of or in connection with the granting of any Option or the
purchase of shares of Option Stock thereunder, the Option may not be
exercised, in whole or in part, unless and until such listing,
registration, qualification, consent or approval is effected or
obtained free of any conditions not acceptable to the Board, in its
discretion. If the Board determines that disclosure materials must be
provided to any Optionee prior to the exercise of any Option, the
Board may delay the exercise of such Option until such materials are
prepared and distributed.
(h) Additional Restrictions on Transfer. By accepting
Options or Option Stock under this Plan, the Optionee will be deemed
to represent, warrant and agree as follows:
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(i) Securities Act of 1933. The Optionee understands
that the shares of the Option Stock have not been registered
under the 1933 Act, and that such shares are not freely
tradeable and must be held indefinitely unless such shares are
either registered under the 1933 Act or an exemption from such
registration is available. The Optionee understands that the
Company is under no obligation to register the shares of
Option Stock, and that, absent such registration, the Option
Stock will only be transferable in accordance with the
provisions of Rule 144 of the Securities and Exchange
Commission.
(ii) Other Applicable Laws. The Optionee further
understands that Transfer of the Option Stock requires full
compliance with the provisions of all applicable laws.
(iii) Investment Intent. Unless a registration statement
is in effect with respect to the sale of Option Stock obtained
through exercise of Options granted hereunder: (1) Upon
exercise of any Option, the Optionee will purchase the Option
Stock for his or her own account and not with a view to
distribution within the meaning of the 1933 Act, and the
Optionee may not Transfer the Option Stock other than as may
be effected in compliance with the 1933 Act and the rules and
regulations promulgated thereunder; (2) no one other than the
Optionee will have any beneficial interest in the Option
Stock; and (3) the Optionee has no present intention of
disposing of the Option Stock at any particular time.
(i) Compliance with Law. Notwithstanding any other
provision of this Plan, Options may be granted pursuant to this Plan,
and Option Stock may be issued pursuant to the exercise thereof by an
Optionee, only after there has been compliance with all applicable
federal and state securities laws. The Company will not be required
to register or qualify Option Stock with the Securities and Exchange
Commission or any State agency, except that the Company will register
with, or as required by local law, file for and secure an exemption
from such registration requirements from the applicable securities
administrator or other official of each state in which an Eligible
Participant would be granted an Option hereunder prior to such grant.
(j) Stock Certificates. Certificates representing the
Option Stock issued pursuant to the exercise of Options will bear all
legends required by law and necessary to effectuate this Plan's
provisions. The Company may place a "stop transfer" order against
shares of the Option Stock until all restrictions and conditions set
forth in this Plan and in the legends referred to in this section (j)
have been complied with.
(k) Notices. Any notice to be given to the Company under
the terms of an Option Agreement will be addressed to the Company at
its principal executive office, Attention: Chief Financial Officer, or
at such other address as the Company may designate in writing. Any
notice to be given to an Optionee will be addressed to the Optionee at
the address provided to the Company by the Optionee. Any such notice
will be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or
branch post office regularly maintained by the United States
Government, or when actually delivered if not mailed.
(l) Other Provisions. The Option Agreement may contain
such other terms, provisions and conditions, including such special
forfeiture conditions, rights of repurchase, rights of first refusal
and other restrictions on Transfer of Option Stock issued upon
exercise of any Options granted hereunder, not inconsistent with this
Plan, as may be determined by the Committee in its sole discretion.
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7. Proceeds from Sale of Stock. Cash proceeds from the sale of
shares of Option Stock issued from time to time upon the exercise of Options
granted pursuant to this Plan will be added to the general funds of the Company
and as such will be used from time to time for general corporate purposes.
8. Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of this Plan, the Committee
may modify, extend or renew outstanding Options granted under this Plan, or
accept the surrender of outstanding Options (to the extent not theretofore
exercised) and authorize the granting of new Options in substitution therefor.
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, materially alter or impair any
rights or obligations under any Option theretofore granted under this Plan.
9. Amendment and Discontinuance. The Board may amend, suspend or
discontinue this Plan at any time or from time to time; provided that no such
action may, without the approval of the stockholders of the Company, materially
increase (other than by reason of an adjustment pursuant to section 5(b)
hereof) the maximum aggregate number of shares of Option Stock in the Option
Pool that may be issued under Options granted pursuant to this Plan or
materially increase the benefits accruing to Plan participants or materially
modify eligibility requirements for the participants. Moreover, no such action
may alter or impair any Option previously granted under this Plan without the
consent of the holder of such Option.
10. Plan Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the Securities Exchange Act of 1934, transactions
under this plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under such Act. To the extent any provision of the
Plan or action by the Plan administrators fails so to comply, it shall be
deemed null and void.
11. Copies of Plan. A copy of this Plan will be delivered to each
Optionee at or before the time he or she executes an Option Agreement.
Date Plan Adopted by Board of Directors: December 21, 1994
Date Plan Approved by Stockholders: July 29, 1995
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AMENDMENT NO. 1 TO THE
CIMETRIX INCORPORATED
STOCK OPTION PLAN
This Amendment No. 1 to the Cimetrix Incorporated Stock Option Plan is
made as of March 21, 1997, by Cimetrix Incorporated, a Nevada corporation for
the benefit of each person who becomes a participant in the Plan.
WHEREAS, Cimetrix Incorporated created a Stock Option Plan for the
benefit of Eligible Participants; and
WHEREAS, the Company believes that it is in the best interests of the
Company and the participants in the Plan to amend the Plan;
NOW, THEREFORE, Section 5 (a) of the Plan is hereby amended to read as
follows:
(a) Option Pool. The aggregate number of shares of
Option Stock that may be issued pursuant to the exercise of Options
granted under this Plan will not exceed Two Million Five Hundred
Thousand (2,500,000) shares of Stock (the "Option Pool"), provided
that such number will be increased by the number of shares of Option
Stock that the Company subsequently may reacquire through repurchase
or otherwise. Shares of Option Stock that would have been issuable
pursuant to Options, but that are no longer issuable because all or a
part of those Options have terminated or expired, will be deemed not
to have been issued for purposes of computing the number of shares of
Option Stock remaining in the Option Pool and available for issuance.
Date Amendment adopted by Board of Directors: March 21, 1997
Date Amendment approved by Shareholders: __________________________, 1997
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EXHIBIT 3
No. Twenty
STOCK PURCHASE WARRANT
BY THESE PRESENTS, CIMETRIX INCORPORATED, a Nevada corporation
("Issuer"), hereby grants to DAVID L. REDMOND ("Holder"), a resident of
Hillsborough County, Florida, the right to purchase, during the term hereof on
the terms and conditions herein contained, Three Hundred Twenty-Five Thousand
shares of the Issuer's common capital stock, $0.0001 par value, for Six and
no/100 Dollars ($6.00) per share (the "Warrant Price"). This Warrant may be
exercised in whole or in part by presentation of this Warrant duly endorsed, to
Issuer at 6979 South High Tech Drive, Midvale, Utah 84047, together with
payment of the Warrant Price prior to 5:00 P.M. on June 30, 1999. Any portion
hereof not exercised prior to such date and time shall lapse. Payment shall be
made in such United States coin or currency that at the time of payment
constitutes legal tender for the payment of public or private debt, or such
other property as may be agreed by Issuer and Holder. Upon any partial
exercise hereof, Issuer shall execute and deliver to Holder a replacement
Warrant for the shares with respect to which this Warrant is not exercised, and
which shall be exercisable during the remainder of the term hereof in
accordance with the terms and conditions herein contained. The right to
exercise this Warrant and purchase shares as provided herein will be subject
to the following Vesting Periods, subject to the Holder continuing to be
employed by the Issuer throughout such Vesting Periods:
(i) no portion of the Warrant will be exercisable prior to April
15, 1998;
(ii) the Warrant will become exercisable on a cumulative basis as
to fifty percent (50%) of the shares on each of the first and second
anniversaries of the date hereof, so that the Warrant will become
fully exercisable, subject to the Holder's continuing employment, on
April 15, 1999.
If Holder voluntarily terminates employment with the Issuer other than because
of death or disability, this Warrant shall become void and of no effect as to
any portion hereof that is then not exercised; provided, however,
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that if the Holder terminates employment because of death or disability, any
vested portion of this Warrant may be exercised prior to the natural expiration
hereof, but no portion hereof shall thereafter vest. If Holder 's employment by
Issuer is terminated by Issuer for any reason and with or without cause, this
Warrant shall immediately vest. Nothing contained in this Warrant shall confer
upon Holder any right with respect to the continuation of his status as an
employee, director, or officer of the Issuer. In the event of a sale or all or
substantially all of the assets of the Issuer, or a merger or consolidation or
other reorganization in which the Issuer is not the surviving corporation, or
in which the Issuer becomes a subsidiary of another corporation (any of the
foregoing events, a "Corporate Transaction"), then notwithstanding anything
else herein contained, the right to exercise all this Warrant will vest
immediately prior to such Corporate Transaction and will terminate immediately
after such Corporate Transaction.
The Holder understands that the shares of stock that may be purchased
hereunder have not been registered under the Securities Act of 1933 (the "1933
Act"), and that such shares are not freely tradeable and must be held
indefinitely unless such shares are either registered under the 1933 Act or an
exemption from such registration is available. The Holder understands that the
Issuer is under no obligation to register the shares of stock that may be
purchased hereunder, and that, absent such registration, the shares will only
be transferable in accordance with the provisions of Rule 144 of the Securities
and Exchange Commission and any other available exemptions from registration
under the 1933 Act and applicable state laws. Unless a registration statement
is in effect with respect to the sale of shares obtained through exercise of
this Warrant: (1) Upon exercise of any portion hereof, the Holder must purchase
the shares for his or her own account and not with a view to distribution
within the meaning of the 1933 Act, other than as may be effected in compliance
with the 1933 Act and the rules and regulations promulgated thereunder; and (2)
the Holder must have no present intention of disposing of the shares at any
particular time. Certificates representing the shares issued pursuant to the
exercise of this Warrant will bear all legends required by law. This Warrant is
not transferable at any time, except in accordance with applicable securities
laws of the United States and the several states. This Warrant is not
registered under
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35
applicable securities laws of the United States or any state, and can not,
therefore, be transferred absent such registration or the receipt by the Issuer
of an opinion of counsel for the Issuer that an exemption from such
registration is available. Any permitted transferee shall take its interest
subject to the terms and conditions hereof.
This Warrant does not entitle the Holder hereof to any of the rights
of a shareholder of the Issuer. Such rights may be obtained only by exercise
of this Warrant and payment of the Warrant Price.
If the Issuer shall, at any time prior to the exercise or expiration
hereof, subdivide its outstanding shares of stock or issue a stock dividend,
the Warrant Price shall be decreased proportionately at the close of business
on the date of the subdivision or issuance of the stock dividend. If the
Issuer shall, at any time prior to the exercise or expiration hereof, combine
its outstanding shares of stock, the Warrant Price shall be increased
proportionately at the close of business on the date of the combination. If
the Issuer shall, at any time prior to the exercise or expiration hereof,
distribute any rights or warrants to all holders of its outstanding shares of
stock, which rights or warrants entitled them to acquire additional shares of
common stock at a price per share lower than the Warrant Price on the record
date of the distribution, then the Warrant Price shall be adjusted
proportionately at the close of business on the record date for determining
stockholders entitled to the distribution. If the Issuer shall, at any time
prior to the exercise or expiration hereof, be a party to a merger or other
reorganization pursuant to which its common stock is converted into any other
form, the Holder shall, upon payment of the Warrant Price, be entitled to
convert the shares that would otherwise be acquired upon exercise hereof, into
such other form.
Any notice to be given to the Issuer under the terms hereof will be
addressed to the Issuer at its principal executive office, Attention:
President, or at such other address as the Issuer may designate in writing.
Any notice to be given to Holder will be addressed to Holder at the address
provided to the Issuer by the Holder. Any such notice will be deemed to have
been duly given if and when enclosed in a properly sealed envelope, addressed
as
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36
aforesaid, registered and deposited, postage and registry fee prepaid, in a
post office or branch post office regularly maintained by the United States
Government.
Notwithstanding anything to the contrary herein contained, issuance of
this Warrant shall be subject to the ratification of the shareholders of the
Issuer at the 1997 annual meeting of shareholders. If the Issuer's
shareholders fail to ratify the issuance of this Warrant, this Warrant shall be
null and void.
DATED as of the 15th day of April, 1997.
CIMETRIX INCORPORATED, a Nevada
corporation
By: /s/ PAUL A BILZERIAN
---------------------------------
Paul A. Bilzerian, President
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APPENDIX
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CIMETRIX INCORPORATED
I, as shareholder of common stock of Cimetrix Incorporated (the "Company"),
revoke any previous proxies and appoint Douglas A. Davidson, Paul A. Johnson,
Dr. Ron Lumia, David Redmond, and Paul A. Bilzerian, and each of them, as my
proxy to attend the annual meeting of shareholders of the Company to be held
on May 31, 1997 and any adjournment thereof, and to represent, vote, consent,
and otherwise act for me and for my shares in the same manner and with the
same effect as if I am personally present. Without limiting the generality
of the foregoing, my proxy shall vote as follows on the following matters:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IN
THE ABSENCE OF ANY DIRECTION, THE SHARES WILL BE VOTED FOR PROPOSAL 2, FOR THE
NOMINEES NAMED IN PROPOSAL 1 ON THE REVERSE SIDE AND ACCORDANCE WITH THEIR
DISCRETION ON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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FOLD AND DETACH HERE
38
MARK YOUR VOTES AS
INDICATED IN
THIS EXAMPLE [X]
FOR all nominees WITHHOLD
listed (except as indicated AUTHORITY to vote for
to the contrary) nominees listed
[ ] [ ]
1. ELECTION OF DIRECTORS.
Nominees for election to the Board of Directors:
Paul A. Blizerian, Douglas A. Davidson,
Paul A. Johnson, Dr. Ron Lumia, and
David L. Redmond
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEES(S),
WRITE THE NOMINEE'S(S)' NAME(S) ON THE SPACE PROVIDED BELOW.)
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2. Ratification of the Company's agreement with Bicoastal Holding Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of Amendment to the Company's Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Ratification of the Company's issuance of warrants to David L. Redmond.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Ratification of the Company's issuance of stock options to non-employee
directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY IS SOLICITED BY THE CORPORATION'S BOARD OF DIRECTORS. UNLESS
OTHERWISE INSTRUCTED, THE PROXY WILL VOTE IN FAVOR OF ALL PROPOSALS.
SIGNATURE(S) DATED: , 1997.
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FOLD AND DETACH HERE