Z-AXIS CORPORATION
7395 E. Orchard Road, Suite 100
Greenwood Village, Colorado 80111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held: September 17, 1999
To the Shareholders of Z-Axis Corporation:
Notice is hereby given of the Annual Meeting of Shareholders of Z-Axis
Corporation (the "Company"), a Colorado corporation, to be held at Z-Axis
Corporation, 7395 E. Orchard Road, Suite 100, Greenwood Village, Colorado on
September 17, 1999 at 3:00 p.m. for the following purposes:
1. To elect directors of the Company for the ensuing corporate year
2. To consider such other matters as may properly come before the meeting.
Only shareholders of record at the close of business on July 31, 1999 are
entitled to be notified of and to vote at the meeting.
It is important that your shares be represented at the meeting. The Board of
Directors of the Company extends a cordial invitation to all shareholders to
attend and recommends that you execute and mail the enclosed Proxy in the return
envelope as promptly as possible. Shareholders who attend the meeting in person
may revoke their proxies and vote in person.
By Order of the Board of Directors
Marilyn T. Heller, Secretary
Englewood, Colorado
July 31, 1999
<PAGE>
Z-AXIS CORPORATION
7395 E. Orchard Road, Suite 100
Greenwood Village, Colorado 80111
PROXY STATEMENT
This Proxy Statement is being furnished to the shareholders of Z-Axis
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies to be voted at the Annual Meeting of
Shareholders to be held on September 17, 1999. The approximate date on which
this Proxy Statement and the form of proxy are first to be sent or given to the
shareholders is August 30, 1999. Some of the officers and regular employees of
the Company, without additional compensation, may solicit proxies personally or
by telephone, if deemed necessary. The cost of solicitation will be borne by the
Company. A shareholder may revoke a proxy previously given by him or her at any
time prior to its use, by giving written notice of such revocation to the
Secretary of the Company. All proxies received by the Board of Directors of the
Company and not revoked will be voted at the meeting.
Except as described below, shareholders of record at the close of business on
July 31, 1999, will be entitled to one vote per share on all business transacted
at the meeting. If one-third of the outstanding shares are present at the
meeting in person or represented by proxy and entitled to vote, such shares will
constitute a quorum. Each matter coming before the Annual Meeting requires for
approval the affirmative vote of the majority of the quorum present at the
meeting, in person or by proxy and entitled to vote. At the close of business on
July 31, 1998, there were 3,805,000 shares of the common stock ($0.001 par
value) entitled to vote.
Proposal #1: Election of Directors
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE
PERSONS NOMINATED BY THE BOARD OF DIRECTORS
The following persons have been nominated to serve on the Board of Directors of
the Company until the next Annual Meeting of Shareholders: Steven H. Cohen, Alan
Treibitz, Marilyn T. Heller, Marvin A. Davis and James E. Pacotti, Jr. If one or
more of the current nominees at the time of the meeting is unable to serve or
for good cause will not serve, the shares represented by the proxies solicited
by the Board of Directors will be voted for the other directors who are
nominated and for any substitute nominee(s) designated by the Board of
Directors.
NOMINEES TO THE BOARD OF DIRECTORS
The Company's existing Board of Directors consists of five members. Officers and
directors are elected annually and serve until their respective successors are
elected. The Company's Board of Directors has one standing committee: the
Compensation Committee, whose members are Dr. Cohen, Mr. Davis and Mr. Pacotti.
The Compensation Committee has general responsibility for all employee
compensation and benefit matters, including recommendation to the full Board on
compensation of officers and benefit plans. The Compensation Committee met once
during the fiscal year ended March 31, 1999.
The Board of Directors held five meetings during the fiscal year ended March 31,
1999. All members of the Board were present at each meeting.
The following table sets forth the name and age of each nominee to the Board of
Directors and any other position held with the Company:
Name of individual Age Office or position
- --------------------------------------------------------------------------------
Steven H. Cohen 63 Chief Executive Officer, Director
Alan Treibitz 47 Chief Operating Officer, President,
Chief Financial Officer, Treasurer,
Director
Marilyn T. Heller 69 Secretary, Director
Mr. Marvin A. Davis 61 Director
Mr. James E. Pacotti, Jr. 52 Director
- --------------------------------------------------------------------------------
Other executive officers
The following table sets forth the name and age of each executive officer that
is not a member of the Board of Directors:
Name of individual Age Office or position
- --------------------------------------------------------------------------------
Jon D. Ackelson 56 Vice President, Production
Stephanie S. Kelso 48 Vice President, Sales and Marketing
- --------------------------------------------------------------------------------
Background information
Background information concerning the principal occupation and business
experience of the officers and directors of the Company is presented below:
Steven H. Cohen has served as Chief Executive Officer since March 1, 1993, as
President from June 1983 to March 1993 and as a Director since June 1983. He
received a Ph.D. degree from the University of Denver in 1973 and a bachelor's
and a master's degree from St. Louis University in 1958 and 1965, respectively.
Dr. Cohen is married to Ms. Heller.
Alan Treibitz has served as Chief Operating Officer and President since March 1,
1993, and as Chief Financial Officer, Treasurer and Director since October 1983.
He received a bachelor's degree from Pomona College in 1974. Mr. Treibitz is
married to Ms. Heller's daughter.
Marilyn T. Heller has served as Secretary and Director since October 1983. She
received a bachelor's degree from the University of Denver in 1967. From 1981 to
1991, she was a marketing representative at Bank Western of Denver. From 1992 to
1993, she was Marketing Director at Health Mark, Inc. Ms. Heller devotes such
time to the affairs of the Company as is necessary to discharge her duties as
Secretary and Director. Ms. Heller is married to Dr. Cohen.
Mr. Marvin A. Davis has served as Director since April 1997. He received a
bachelor's degree and MBA from Washington University. Since 1992, he has served
as President of Grisanti, Galef & Goldress, a crisis management firm that has
assisted many of the foremost buy-out firms in the United States. Mr. Davis is
also currently serving as Chairman and CEO of Datamax Corporation, a
manufacturer of bar code printers. From 1962 to 1992, Mr. Davis has served in
senior executive management and consulting positions with several different
organizations in various industries. Mr. Davis has authored several publications
and articles that have appeared in journals such as Business Week, Wall Street
Journal and CEO Magazine.
Mr. James E. Pacotti, Jr. has served as Director since April 1997. He received a
bachelor's degree from Colorado State University and Distinguished Military
Graduate Honors. He has served as Vice President, Sales of Expertec, Inc., a
software development company specializing in field service management software
applications, since April 1996. From December 1975 to February 1996, Mr. Pacotti
served in various senior exective management and sales positions in the computer
software and hardware industry. From August 1968 to November 1973, Mr. Pacotti
served as a Captain in the United States Army.
Jon D. Ackelson has served as Vice President, Production since April 1995 and as
Director of Production from December 1992 to March 1995. Prior to joining the
Company in 1992, he was employed as a producer, writer and director in the
motion picture and television industries. Mr. Ackelson received a bachelor's
degree from the University of Miami and a Masters degree from the University of
Denver.
Stephanie S. Kelso has served as Vice President, Sales and Marketing since April
1995 and as Director, Sales and Marketing from February 1993 to March 1995.
Prior to joining the Company in 1993, Ms. Kelso was the General Manager of a
national computer graphics company. Ms. Kelso received a bachelor's degree from
Indiana University in 1974 and a Master of Arts in 1976.
Employment Agreements
The Company has entered into employment agreements with Dr. Cohen and Mr.
Treibitz. The agreements provide for each of them to assign to the Company all
rights to inventions and other matters developed in the course of their
employment. The agreements also provide that they may not, during the term of
their employment or for two years thereafter, accept or perform any work that
directly or indirectly interferes in any way with the work or relationship of
the Company with its customers or other employees. They have agreed to maintain
the confidentiality of Company information and not to compete directly or
indirectly through the use of proprietary information for one year following the
termination of their employment for any reason. The employment agreements may be
terminated by either the Company or the individual upon thirty days notice
without cause or without prior notice for cause, including a material breach of
the agreement. Compensation under the agreements is determined annually by the
Compensation Committee of the Board of Directors.
<PAGE>
Executive compensation
The following table sets forth the aggregate remuneration earned and accrued by
the Company for the fiscal years ended March 31, 1999, 1998, and 1997 for the
Chief Executive Officer and the Chief Operating Officer of the Company on March
31, 1999:
<TABLE>
<CAPTION>
Fiscal Salary Profit Sharing Other Compensation
Name and principal position year ($) ($) ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven H. Cohen,
Chief Executive Officer 1999 109,456 0 0
1998 104,244 22,091 0
1997 99,552 0 0
Alan Treibitz,
Chief Operating Officer, 1999 109,456 0 0
President, Chief Financial- 1998 104,244 29,454 0
Officer 1997 99,552 0 0
- -----------------------------------------------------------------------------------------
</TABLE>
The bonuses earned by Dr. Cohen and Mr. Treibitz during the fiscal year ended
March 31, 1998 were awarded under an ongoing program, which is authorized
annually by the Board of Directors and administered by the Compensation
Committee for attaining certain profit or other goals. No such bonuses were
earned during the fiscal years ended March 31, 1999 or 1997. Dr. Cohen and Mr.
Treibitz do not participate in decisions regarding their own compensation.
Options granted in the last fiscal year
The following table sets forth certain information regarding options granted to
the Chief Executive Officer and Chief Operating Officer during the fiscal year
ended March 31, 1999:
<TABLE>
<CAPTION>
Name granted (#) year (%) ($/share)(1) date option terms (2)
- ------------------------------------------------------------------------------------
5% 10%
----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Steven H. Cohen 7,500 11.7% $0.2063 03/31/2003 $ 428 $945
Alan Treibitz 7,500 11.7% $0.2063 03/31/2003 $ 428 $945
- ------------------------------------------------------------------------------------
</TABLE>
(1) The exercise price per share of granted options for Steven H. Cohen and
Alan Treibitz was equal to 110% of the fair market value of the Common
Stock on the date of the grant as reported on the Electronic Bulletin
Board.
(2) The potential realizable value is calculated based on the term of the
option (5 years). It is calculated assuming that the fair market value of
the Company's Common Stock on the date of grant appreciates at the
indicated annual rate compounded annually for the entire term of the
option and that the option is exercised and sold on the last day of its
term for the appreciated stock price.
Aggregate option exercises in last fiscal year and fiscal year end option values
The following table sets forth information with respect to (i) the exercise of
stock options by the Chief Executive Officer and Chief Operating Officer during
the fiscal year ended March 31, 1999, (ii) the number of securities underlying
unexercised options held by the Chief Executive Officer and Chief Operating
Officer as of March 31, 1999 and (iii) the value of unexercised in-the-money
options (i.e., options for which the fair market value of the Common Stock
($0.1875 at March 31, 1999 exceeds the exercise price) as of March 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Value of unexercised-in-the-
Number of unexercised options at money options at fiscal year end
at fiscal year end ($) (1)
---------------------------------------------------------------------
Shares
Acquired to
Name Exercise Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Steven H. Cohen 0 17,500 0 $250 $ 0
Alan Treibitz 0 17,500 0 $250 $ 0
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the fair market value of the Common Stock as of March 31, 1999
($0.1875) minus the exercise price, multiplied by the number of shares
underlying the option.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of common stock beneficially
owned by each owner of 5% or more of the Company's common stock, by each
director and by all director's and officers as a group, and the percentage of
the outstanding common stock owned by such persons and by such group, as of
March 31, 1999. For purposes of this presentation, beneficial ownership is
deemed to be the possession of sole voting and investment powers, unless
otherwise indicated.
Name and address Shares of common stock Percent of
beneficial owner beneficially owned common stock
- ----------------------------------------------------------------------------
Steven H. Cohen (1) 600,188 15.1%
7395 E. Orchard Road, Suite 100
Greenwood Village, CO 80111
Valerie L. Switzer (2) 415,851 10.4%
16020 East Milan Drive
Aurora, CO 80013 .
Gold C Enterprises, Inc. 411,250 10.3%
1670 York Street
Denver, CO 80206
Alan Treibitz (3) 405,891 10.2%
7395 E. Orchard Road, Suite 100
Greenwood Village, CO 80111
Marilyn T. Heller (1) 147,975 3.9%
4530 South Verbena
Denver, CO 80237
All officers and directors as a 1,260,054 31.6%
group (7 persons)
- ----------------------------------------------------------------------------
(1) Dr. Cohen and Ms. Heller disclaim beneficial ownership of the Company's
common stock owned by the other. Includes currently exercisable stock
options to purchase 5,000 shares at $0.138 per share until March 2007 and
5,000 shares at $0.275 per share until March 2008 and 7,500 shares at
$0.2063 until March 2009.
(2) Includes 213,332 shares of common stock owned by Mrs. Switzer's minor
children of which Mrs. Switzer is beneficial owner.
(3) Includes currently exercisable stock options to purchase 5,000 shares at
$0.138 per share until March 2007 and 5,000 shares at $0.275 per share
until March 2008 and 7,500 shares at $0.2063 until March 2009
SHAREHOLDER PROPOSALS
Shareholders may submit proposals for inclusion, under certain conditions, in
the 2000 Proxy Statement for consideration at the 2000 Annual Meeting.
Shareholders' proposals must be received at the Company's corporate office
before March 31, 2000, for inclusion in the 2000 proxy material.
OTHER MATTERS
The Board of Directors knows of no other business to be presented at the Annual
Meeting. If other matters do come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote each proxy in accordance
with their best judgment on such matters.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
BDO Seidman, LLP, conducted the audit of the Company's financial statements for
the years ended March 31,1997 and 1998. Ehrhardt Keefe Steiner & Hottman PC,
Certified Public Accountants and Consultants, conducted the audit of the
Company's financial statements for the year ended March 31, 1999. These firms
performed no accounting services for the Company other than the audit of its
financial statements and tax compliance services. It is the Company's
understanding that BDO Seidman, LLP and Ehrhardt Keefe Steiner & Hottman PC are
obligated to maintain audit independence as prescribed by the accounting
profession and certain requirements of the Securities and Exchange Commission.
As a result, the directors of the Company do not specifically approve, in
advance, non-audit services provided by a firm, nor do they consider the effect,
if any, of such services on audit independence
ANNUAL REPORT
The Company's 1999 Annual Report to Shareholders is enclosed with this Proxy
Statement.
IF YOU CAN NOT ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE AND
PROMPTLY MAIL THE ENCLOSED PROXY.
Marilyn T. Heller, Secretary
Englewood, Colorado
July 31, 1999
