<PAGE>
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 Section 240.14a-11(c) or Section
240.14a-12
Colorado MEDtech, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF COLORADO MEDTECH, INC.
TO BE HELD NOVEMBER 17, 1995
To the Shareholders of Colorado MEDtech, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Colorado
MEDtech, Inc., a Colorado corporation (the "Company"), will be held on November
17, 1995 at 3:00 p.m. at Hotel Boulderado, 2115 12th Street, Boulder, Colorado
for the following purposes:
1. To elect seven directors to serve until the next Annual Meeting of
Shareholders or until their respective successors are elected and
qualified;
2. To transact any other business as may properly come before the Annual
Meeting or any adjournment thereof.
The close of business on October 10, 1995, has been fixed as the record date for
the determination of holders of Colorado MEDtech, Inc. stock entitled to notice
of, and to vote at, the Annual Meeting, and only shareholders of record at such
time will be so entitled to vote.
In order for the proposals listed above to be approved, each proposal must be
approved by the affirmative vote of holders of a majority of shares, voting as a
group.
Whether or not you expect to attend the Annual Meeting, holders of Colorado
MEDtech, Inc. Common Stock should complete, date, and sign the enclosed form of
proxy card and mail it promptly in the enclosed envelope.
By Order of the Board of Directors
[SIGCUT]
Bruce L. Arfmann
Secretary of the Corporation
Date: October 17, 1995
PLEASE SIGN AND RETURN THE ENCLOSED FORM OF PROXY PROMPTLY WHETHER OR NOT YOU
INTEND TO BE PRESENT AT THE ANNUAL MEETING. THE GIVING OF A PROXY WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE>
COLORADO MEDTECH, INC.
6175 Longbow Drive
Boulder, CO 80301
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
November 17, 1995
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Colorado MEDtech, Inc., a Colorado
corporation ("MEDtech" or the "Company"), for use at the Annual Meeting of
Shareholders of the Company to be held on November 17, 1995, and at any and
all adjournments of such meeting.
If the enclosed Proxy Card is properly executed and returned in time to
be voted at the meeting, the shares of Common Stock represented will be voted
in accordance with the instructions contained therein. Executed proxies that
contain no instructions will be voted FOR each of the proposals described
herein. Abstentions (proxies not returned) and broker non-votes will be
treated as shareholders absent from the Annual Meeting. The proxies will be
tabulated and votes counted by American Securities Transfer, Incorporated.
It is anticipated that this Proxy Statement and the accompanying Proxy will
be mailed to the Company's shareholders on or about October 17, 1995.
SHAREHOLDERS WHO EXECUTE PROXIES FOR THE ANNUAL MEETING MAY REVOKE THEIR
PROXIES AT ANY TIME PRIOR TO THEIR EXERCISE BY DELIVERING WRITTEN NOTICE OF
REVOCATION TO THE COMPANY, BY DELIVERING A DULY EXECUTED PROXY CARD BEARING
A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
The costs of the meeting, including the costs of preparing and mailing
the Proxy Statement and Proxy, will be borne by the Company. Additionally,
the Company may use the services of its Directors, officers and employees to
solicit proxies, personally or by telephone, but at no additional salary or
compensation. The Company will also request banks, brokers, and others who
hold shares of Common Stock of the Company in nominee names to distribute
proxy soliciting materials to beneficial owners, and will reimburse such
banks and brokers for reasonable out-of-pocket expenses which they may incur
in so doing.
OUTSTANDING CAPITAL STOCK
The record date for shareholders entitled to vote at the Annual Meeting
is October 10, 1995. At the close of business on that day, there were
6,901,762 shares of no par value Common Stock (the "Common Stock") of the
Company outstanding and entitled to vote at the meeting.
<PAGE>
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
outstanding Common Stock is necessary to constitute a quorum for each matter
voted upon at the Annual Meeting. In deciding all questions, a holder of
Common Stock is entitled to one vote, in person or by proxy, for each share
held in his or her name on the record date. Abstentions and broker
non-votes, if any, will not be included in vote totals and, as such, will
have no effect on any proposal.
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the shareholder otherwise specifies in
the proxy, will be voted (i) for the election of each of the seven nominees
named herein for the office of director, and (ii) at the discretion of the
proxy holders, on any other matter that may properly come before the meeting
or any adjournment thereof.
Where shareholders have appropriately specified how their proxies are to
be voted, they will be voted accordingly. If any other matter of business is
brought before the meeting, the proxy holders may vote the proxies at their
discretion. The directors do not know of any such other matter or business.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock, as of August 31, 1995, by
each person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, certain executive officers and each director of the
Company, and all directors and executive officers as a group. Except as may
be indicated in the footnotes to the table and subject to applicable
community property laws, the Company believes that each of such persons has
the sole voting and dispositive power over the shares held by him except as
otherwise indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- - ------------------- ------------------ --------
<S> <C> <C>
Michael R. Barr 2,535,000(1) 31.96%
6175 Longbow Drive
Boulder, CO 80301
Vencor Investments, Inc. 2,500,000(2) 31.64%
c/o Greenbaum Doll
3300 First National Tower
Louisville, KY 40202-3197
Dean A. Leffingwell 766,005(3) 11.05%
6175 Longbow Drive
Boulder, CO 80301
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C> <C>
Vern D. Kornelsen 484,694(4) 6.99%
6175 Longbow Drive
Boulder, CO 80301
Clifford W. Mezey 512,968(5) 7.33%
6175 Longbow Drive
Boulder, CO 80301
CMED Partners, Ltd. 408,413 5.92%
1700 Broadway, Suite 1450
Denver, CO 80290-1401
John V. Atanasoff II 615,863(6) 8.27%
6175 Longbow Drive
Boulder, CO 80301
Brian Underhill 372,708 5.40%
303 Canyon Blvd.
Boulder, CO 80302
Ammon Balaster, Ph.D. 362,051 5.25%
6175 Longbow Drive
Boulder, CO 80301
Lockett E. Wood, Ph.D. 197,712(7) 2.84%
6175 Longbow Drive
Boulder, CO 80301
Robert L. Sullivan 355,000(8) 5.11%
6175 Longbow Drive
Boulder, CO 80301
Bruce L. Arfmann 176,158(9) 2.50%
6175 Longbow Drive
Boulder, CO 80301
John E. (Jack) Wolfe 130,000(10) 1.86%
6175 Longbow Drive
Boulder, CO 80301
All Directors and Executive
Officers as a group
(10 persons) 6,135,451 68.59%
</TABLE>
________________
(1) Includes 1,500,000 shares and warrants to acquire 1,000,000
shares, which are currently exercisable or become
exercisable within 60 days held by a wholly-owned
subsidiary of Vencor, Inc. of which Mr. Barr is an officer
and director. Mr. Barr disclaims beneficial ownership of
-3-
<PAGE>
<TABLE>
<C> <S>
all such shares and warrants. Also includes warrants
issued to Mr. Barr to acquire 30,000 shares, which are
currently exercisable or become exercisable within 60 days.
(2) Includes warrants to acquire 1,000,000 shares, which are
currently exercisable or become exercisable within 60 days.
(3) Includes warrants to acquire 30,000 shares, which are
currently exercisable or become exercisable within 60 days.
(4) Includes 408,413 shares held by CMED Partners, Ltd., of
which Mr. Kornelsen is the general partner. Also includes
428 shares owned by Mr. Kornelsen's wife as to which he
disclaims beneficial ownership. Also includes 33,108
shares owned by the Saunders Construction Restated Profit
Sharing Plan. Mr. Kornelsen is the investment manager as
to such shares held by the plan, and disclaims beneficial
ownership of shares owned by such plan. Also includes
warrants to acquire 30,000 shares, which are currently
exercisable or become exercisable within 60 days.
(5) Includes 272,622 shares held by the Petsy G. Mezey Trust,
of which Mr. Mezey is a trustee. Also includes 7,000
shares owned by Mr. Mezey's wife for the benefit of
grandchildren, as to which shares Mr. Mezey disclaims
beneficial ownership. Also includes warrants to acquire
95,300 shares, which are currently exercisable or become
exercisable within 60 days. Also includes 79,746 shares
subject to a voting agreement with an individual holding an
irrevocable voting proxy from another shareholder.
(6) Includes 10,000 shares and warrants to acquire 10,000
shares, which are currently exercisable or become
exercisable within 60 days that are owned by Mr.
Atanasoff's sister as to which he disclaims beneficial
ownership. Also includes options to purchase 483,333
shares and warrants to purchase 56,265 shares, which are
currently exercisable or become exercisable within 60 days.
(7) Includes 26,965 shares held by Dr. Wood's sister or
brother-in-law in their own names or as trustees for Dr.
Wood's children. Dr. Wood disclaims beneficial ownership
of all such shares. Also includes 18,722 shares held by
Dr. Wood in an IRA account. Also includes options to
purchase 51,025 shares, which are currently exercisable or
become exercisable within 60 days.
(8) Includes 300,000 shares held by CIBA Corning Diagnostics
Corp., of which Mr. Sullivan is Senior Vice
President-Finance. Mr. Sullivan disclaims beneficial
ownership of all such shares. Also includes warrants to
acquire 40,000 shares, which are currently exercisable or
become exercisable within 60 days.
(9) Includes 15,449 shares owned by the estate of Mr. Arfmann's
father as to which he disclaims beneficial ownership. Also
includes options to purchase 137,535 shares, which are
currently exercisable or become exercisable within 60 days.
(10) Includes warrants to acquire 80,000 shares, which are
currently exercisable or become exercisable within 60 days.
</TABLE>
-4-
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
Pursuant to the Bylaws, the authorized number of directors of the
Company has been set at seven, and seven directors are to be elected at the
meeting. Each nominee will be elected to hold office until the next annual
meeting of shareholders or until his successor is elected and qualified.
Proxy holders will not be able to vote the proxies held by them for more than
seven persons. If a quorum is present, the seven nominees having the highest
number of votes cast in favor of their election will be elected. Should any
nominee become unable or unwilling to accept nomination or election, the
proxy holders may vote the proxies for the election, in his stead, of any
other person the Board of Directors may recommend. Each nominee has
expressed his intention to serve the entire term for which election is sought.
THE BOARD OF DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE FOR EACH NOMINEE
FOR THE BOARD OF DIRECTORS.
The Board of Directors' nominees for the office of director are as
follows:
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A
NAME AGE DIRECTOR
- - ---- --- ----------
<S> <C> <C>
John V. Atanasoff II 60 1993
(N)
Dean A. Leffingwell 46 1977(1)
(N)(S)
Vern D. Kornelsen 62 1991
(A)(C)(N)
Robert L. Sullivan 58 1985
(A)(C)
Clifford W. Mezey 66 1989(1)
(C)(S)
John E. (Jack) Wolfe 56 1993
(A)(S)
Michael R. Barr 46 1993
(S)
</TABLE>
___________________
(A) Member of the Audit Committee
(C) Member of the Compensation Committee
(N) Member of the Nominating Committee
(S) Member of the Strategic Planning Committee
-5-
<PAGE>
(1) Date became a director of RELA, Inc. ("RELA"). Became a
director of the Company in October 1992 in connection with
the merger of RELA and the Company.
Mr. Atanasoff has been the Chief Executive Officer of the Company since
June 1993. From 1989 until January 1993, Mr. Atanasoff served as chief
executive officer of Cybernetics Products, Inc., a publicly-traded company
that develops and manufactures computer controlled equipment for the
electronics industry and computer graphic scanners and cameras for the motion
picture and audio visual markets. For more than five years prior to 1989,
Mr. Atanasoff held various senior management positions with the Fluid
Technology Group of EG&G, Inc. and Textron Systems (formerly AVCO Systems).
Mr. Leffingwell is a director and CEO of Requisite, Inc., a
privately-held company that designs and develops object-oriented software
tools for development and documentation. Mr. Leffingwell served as Chairman
and Vice President of Business Development of the Company from October 1992
to June 30, 1993. Mr. Leffingwell also served as the Chief Executive Officer
of RELA from January 1992 to October 1992. From 1977 to 1991, Mr.
Leffingwell served as President and Chairman of RELA.
Mr. Kornelsen is a certified public accountant, and has practiced in
Denver, Colorado for more than five years. He is a director of a number of
private companies.
Mr. Sullivan has served since 1985 as Senior Vice President-Finance and
Chief Financial Officer of CIBA Corning Diagnostic Corp., a manufacturer and
marketer of medical diagnostic equipment and supplies. From 1962 to 1985,
Mr. Sullivan held several operating and financial positions with Corning
Glass Works.
Prior to his retirement, Mr. Mezey was the majority owner and Chief
Executive Officer of Mezey-Puroll Automotive, Inc., an automotive
manufacturer's representative company in Michigan, for more than five years.
He was the owner and Chief Executive Officer of Interstate Industries, Inc.,
a manufacturer of truck wiring harnesses in Michigan. Mezey-Puroll
Automotive, Inc. sells certain RELA products in Michigan, upon which it
receives the standard commission paid by RELA to RELA's other manufacturer's
representatives.
Mr. Wolfe has served as President and Chief Executive Officer since 1986
of Tytronics, Incorporated, a manufacturer and marketer of on-line liquid and
gas analyzers to the process and environmental industries. Prior to 1986, he
held various senior management positions with EG&G Sealol, Inc., Masoneilan
International, Inc. (Division of Studebaker Worthington), Litton Industries
and General Electric Company. Mr. Wolfe is a member of the board of
directors of Holometrix, Inc.
Mr. Barr is a founder of Vencor, Inc., an intensive care hospital
company located in Louisville, Kentucky. He is a physical therapist,
certified respiratory therapist and has served as Vice President - Operations
and as a Director of Vencor, Inc., since 1985. From 1976 to 1985, he was
Director of Rehabilitation at Rockcastle County Hospital in Mt. Vernon,
Kentucky.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Audit Committee, a Compensation Committee, a
Nominating Committee and a Strategic Planning Committee. The Audit Committee
is responsible for (i) reviewing the scope of,
-6-
<PAGE>
and the fees for, the annual audit, (ii) reviewing with the independent
auditors the corporate accounting practices and policies, (iii) reviewing
with the independent auditors their final report, and (iv) being available to
the independent auditors during the year for consultation purposes. The
Audit Committee met four times in the fiscal year ended June 30, 1995. The
Compensation Committee determines the compensation of the officers of the
Company and performs other similar functions. The Compensation Committee met
four times in the fiscal year ended June 30, 1995. The Nominating Committee
is responsible for reviewing potential candidates for director and for the
recommendation of candidates to the Board. The Nominating Committee did not
meet during the fiscal year ended June 30, 1995. The Strategic Planning
Committee is responsible for reviewing new product, licensing and
acquisition, as well as other strategic issues. The Strategic Planning
Committee met four times in the fiscal year ended June 30, 1995.
Directors are reimbursed for expenses incurred for attending any Board
or committee meeting. There is no family relationship between any current or
prospective director of the Company and any other current or prospective
executive officer of the Company.
During 1995, there were five meetings of the Board of Directors. With
the exception of directors Michael Barr and Jack Wolfe, during 1995 all
directors attended at least 75% of the meetings of the Board and committees
of the Board on which they were members.
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and holders of more than
10% of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership
of Common Stock of the Company. Based solely upon a review of Forms 3 and 4
and amendments thereto furnished to the Company during the fiscal year ended
June 30, 1995 and Forms 5 and amendments thereto furnished to the Company
with respect to the fiscal year ended June 30, 1995, to the best of the
Company's knowledge, the Company's directors, officers and holders of more
than 10% of its Common Stock complied with all Section 16(a) filing
requirements.
EXECUTIVE OFFICERS
The following persons are the executive officers of the Company:
<TABLE>
<CAPTION>
NAME POSITION
- - ---- --------
<S> <C>
John V. Atanasoff II Chief Executive Officer and President
Bruce L. Arfmann Chief Financial Officer, Treasurer
and Secretary
Lockett E. Wood, Ph.D. Vice President
Ammon N. Balaster, Ph.D. Vice President
</TABLE>
Information concerning the business experience of Mr. Atanasoff is
provided under the section entitled "Election of Directors."
-7-
<PAGE>
BRUCE L. ARFMANN, AGE 48. Mr. Arfmann has served as Chief Financial
Officer, Secretary and Treasurer of RELA since January 1991. Prior to
joining RELA, he was a partner with Arthur Andersen & Co. from 1982 to 1990,
in its Denver and Phoenix offices, serving a portion of that period as
Partner-in-Charge of the Enterprise Practice.
LOCKETT E. WOOD, PH.D., AGE 55. Dr. Wood served as a director of the
Company since its inception in 1977 through 1993. Dr. Wood also served as
President from the Company's inception through April 1986, at which time he
became Chairman of the Board of Directors, serving in that capacity through
September 1987. Dr. Wood resumed the Presidency in April 1991, which he held
until October 1992, at which time he was appointed President of the
Cybermedic Division of the Company. He has served as Chief Scientist since
April 1986. Prior to founding the Company, Dr. Wood was with the National
Bureau of Standards of the U.S. Department of Commerce for 14 years.
AMMON N. BALASTER, PH.D., AGE 52. Dr. Balaster has served as Executive
Vice President of RELA since 1991. Dr. Balaster has been with RELA for more
than five years, at times also holding the position of Vice President and
Secretary. His primary responsibilities while at RELA have been in the areas
of marketing, sales, and business development.
All executive officers are chosen by the Board of Directors and serve at
the Board's discretion.
-8-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth the cash
compensation earned for the fiscal years ended June 30, 1995, 1994 and 1993
by the Company's Chief Executive Officer and by the highest compensated
executive officers who were serving as executive officers at the end of the
1995 fiscal year whose individual total cash compensation for the 1995 fiscal
year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- -----------------------
RESTRICTED
STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL SALARY BONUS AWARDS SARS COMPENSATION(3)
POSITION YEAR ($) ($) ($) (#) ($)
- - ------------------ ---- ------- ------ ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John V. Atanasoff, II(1) 1995 92,965 26,845 -0- 40,000 1,573
Chief Executive Officer, 1994 104,783 18,291 -0- 270,000 1,464
President and Chairman 1993 -0- -0- -0- 300,000 -0-
Bruce L. Arfmann 1995 98,083 23,634 -0- 20,000 914
Chief Financial Officer 1994 96,371 18,239 -0- 15,000 -0-
1993 94,600 3,000 -0- -0- -0-
Ammon N. Balaster 1995 94,963 16,049 -0- -0- 1,390
Vice President 1994 91,723 -0- -0- -0- 1,269
1993 86,331 5,000 -0- -0- -0-
Lockett E. Wood 1995 90,000 22,298(2) -0- -0- 1,534
Vice President 1994 90,000 -0- -0- -0- 1,260
1993 91,385 -0- -0- -0- -0-
</TABLE>
_________________
(1)Mr. Atanasoff's employment commenced June 21, 1993.
(2)Includes a one-time payout of accrued vacation of $14,798.
(3)Contributions to 401(k) Plan.
-9-
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF TOTAL EXERCISE
UNDERLYING OPTIONS/SARS OR
OPTIONS/SARS GRANTED TO EMPLOYEES BASE PRICE
NAME GRANTED (#) IN FISCAL YEAR ($/SH.) EXPIRATION DATE
- - ---- ------------ -------------------- ---------- ---------------
<S> <C> <C> <C> <C>
John V. Atanasoff II 40,000(1) 16.5% 1.66 9/8/99
Bruce L. Arfmann 20,000(1) 8.3% 1.66 9/8/99
Ammon N. Balaster -0- -0- N/A N/A
Lockett E. Wood -0- -0- N/A N/A
</TABLE>
____________________
(1) Options vest equally one-third each year commencing September 8, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FISCAL YEAR-END
SHARES (#) ($)
ACQUIRED ON VALUE ------------- ------------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- -------------- -------------
<S> <C> <C> <C> <C>
John V. Atanasoff II -0- -0- 470,000/140,000 159,800/34,000
Bruce L. Arfmann -0- -0- 130,868/20,000 5,100/-0-
Ammon N. Balaster -0- -0- -0-/-0- -0-/-0-
Lockett E. Wood -0- -0- 47,100/31,400 26,376/17,584
</TABLE>
DIRECTOR COMPENSATION
Directors of the Company who are not also employees of the Company are
reimbursed all out-of-pocket expenses incurred in attending each meeting or
committee meeting of the Board of Directors. In consideration of their
service as Directors, non-employee directors Vern Kornelsen, Robert Sullivan
and Clifford Mezey have each been granted warrants to purchase 30,000 shares
of the Company's common stock at $1.625 per share. The warrants vested
one-half on June 30, 1993 and one-half on June 30, 1994. Non-employee
directors Dean Leffingwell, Jack Wolfe and Michael Barr have each been
granted warrants to purchase 30,000 shares of the Company's common stock at
$1.50 per share. The warrants vested one-half on June 30, 1994, and one-half
on June 30, 1995, subject to continued service on the
-10-
<PAGE>
board as of each vesting date. In addition, non-employee directors Micheal
Barr, Vern Kornelsen, Dean Leffingwell, Clifford Mezey, Robert Sullivan and
Jack Wolfe have each been granted warrants to purchase 30,000 shares of the
Company's common stock at $1.59 per share. These warrants vest one-half on
June 30, 1996 and one-half on June 30, 1997, subject to continued service on
the Board as of each vesting date. All director warrants have a five-year
term from their vesting date. Former director William Coleman was granted
warrants to purchase 15,000 shares of the Company's Common Stock at $1.625
per share. Warrants to purchase 105,000 shares expire in February 1998,
warrants to purchase 90,000 shares expire in November 1998, and warrants to
purchase 180,000 shares expire in June of 2000.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In June 1993, the Company entered into an employment agreement with John V.
Atanasoff II, Chief Executive Officer of the Company, which has a three-year
term. The agreement fixes Mr. Atanasoff's compensation at $140,000 per year.
The agreement also provides for incentive compensation in the form of an
annual bonus, calculated as a percentage of annual salary, which is based on
the overall profitability of the Company. From February 1994 to February
1995, Mr. Atanasoff agreed to a voluntary salary reduction. In connection
with and as a condition of the employment agreement, Mr. Atanasoff executed a
noncompetition agreement in which he agreed not to engage in competitive
activities for a period of two years after his employment with the Company is
terminated, whether voluntarily or involuntarily. The Company also agreed to
pay relocation expenses of $25,000 and to grant a nonqualified stock option
to purchase up to 300,000 shares of the Company's common stock at a purchase
price of $1.25 per share. In April 1994, the nonqualified option was
cancelled and replaced with a qualified option under identical price, terms
and conditions. The option vests 100,000 shares per year over the next three
years. If the Company terminates employment, for other than cause, at any
time prior to June 1996, no vesting of the option shall occur after the date
of termination, but Mr. Atanasoff will be entitled to receive a severance
payment amounting to all compensation remaining under the Agreement; however,
such payment shall not be less than one year's base salary if termination
occurs after June 21, 1995. The agreement provides for severance pay equal
to two years' base salary if termination is the result of a change in Company
ownership greater than 30%. If Mr. Atanasoff terminates his employment prior
to June 1996, no further vesting of the stock option shall occur, and the
unexercised portion of the option, whether or not vested, shall terminate.
Subject to these restrictions, each portion of the vested option shall be
exercisable for five years after the date such portion has vested.
In February 1994, the Company entered into separate employment and
noncompete agreements with the Company's other officers, which fixes Mr.
Arfmann's compensation at $101,000, Mr. Balaster's compensation at $95,000
and Mr. Wood's compensation at $90,000. From February 1994 to February 1995,
Mr. Arfmann agreed to a voluntary salary reduction. The agreements provide
for a severance payment equal to one year's salary if the officer's
employment is terminated as a result of loss of officer status, relocation of
the Company or for reasons other than cause. The agreement provides for a
severance payment equal to two year's salary if within two years from the
closing date of an acquisition of the Company, the officer is terminated
without cause. The agreement has no fixed term and may be terminated by
either party at any time. In connection with and as a condition of the
employment agreement, each officer executed a noncompetition agreement in
which he agreed not to engage in competitive activities for a period of one
year after his employment is terminated, whether voluntarily or involuntarily.
On October 19, 1992, the Company entered into a three-year sales
representative agreement with an agency whose majority shareholder was
Clifford W. Mezey. Such agreement provides territory and
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commission arrangements consistent with agreements entered into with other
sales representatives of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; LEGAL PROCEEDINGS
During the fiscal year ended June 30, 1994, the Company sold 1,500,000
shares of common stock to a wholly-owned subsidiary of Vencor, Inc.
("Vencor"), in two private placement transactions involving the sale of
500,000 and 1,000,000 shares, respectively. Pursuant to an Agreement to
Purchase and Sell Stock between the Company and Vencor dated December 3, 1993
(the "Purchase Agreement"), the Company agreed to take steps necessary to
elect a representative of Vencor to the Company's Board of Directors and to
use its best efforts to obtain such election for so long as Vencor owns at
least 500,000 shares of the common stock of the Company. In the second
private placement transaction, the Company issued to Vencor warrants to
purchase 2,000,000 shares of Company common stock, which expire May 12, 1999.
Of these warrants, 1,000,000 became exercisable in May 1995 at $1.80 per
share, and 1,000,000 become exercisable in May 1996 at $2.52 per share. In
connection with the second sale of stock to Vencor, the Company entered into
a Standstill Agreement with Vencor dated as of June 30, 1994 pursuant to
which Vencor will not acquire more than 40% of the Company's common stock for
a period of five years. In addition, the Company agreed to take steps
necessary to elect an additional representative of Vencor to the Company's
Board of Directors and, for so long as Vencor owns at least 1,500,000 shares
of the common stock of the Company, to use its best efforts to obtain the
election of two Vencor representatives (including the Vencor representative
provided for in the Purchase Agreement. Vencor waived its right to a second
board seat for the 1995 and 1996 fiscal years. The Company entered into a
product development agreement with Vencor, which provides for the Company to
expend $800,000 over a two-year period to develop mutually agreed upon
products that Vencor will purchase exclusively from the Company, while the
Company will be unrestricted in its rights to sell the products. Michael R.
Barr, a director of the Company, is the Vice President-Operations and a
director of Vencor.
Mezey-Puroll Automotive, Inc. filed a petition under Chapter 11 of the
Federal Bankruptcy Code in February 1993, and was released from protection of
the bankruptcy laws in August 1993. At the time of the bankruptcy, Clifford
W. Mezey, a director of the Company, was the Chief Executive Officer of
Mezey-Puroll Automotive, Inc.
SHAREHOLDER PROPOSALS
Any proposals from shareholders to be presented for consideration for
inclusion in the proxy material in connection with the 1996 annual meeting of
shareholders of the Company must be submitted in accordance with the rules of
the Securities and Exchange Commission and received by the Secretary of the
Company at the Company's principal executive offices no later than the close
of business on June 17, 1996.
OTHER MATTERS
All information contained in this Proxy Statement relating to the
occupations, affiliations and securities holdings of directors and officers
of the Company and their relationship and transactions with the Company is
based upon information received from the individual directors and officers.
All information relating to any beneficial owner of more than 5% of the
Company's Common Stock is based upon information contained in reports filed
by such owner with the Securities and Exchange Commission.
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<PAGE>
The Company's independent public accountants for the fiscal years 1994,
1995 and 1996 are Arthur Andersen LLP. Representatives of such firm are
expected to be present at the annual meeting, will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
The Annual Report to Shareholders of the Company for the fiscal year ended
June 30, 1995, which includes financial statements and accompanies this Proxy
Statement, does not form any part of the material for the solicitation of
proxies.
The Company will furnish without charge a copy of its Annual Report on Form
10-KSB, including the financial statements, for the fiscal year ended June
30, 1995 filed with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 to any shareholder
(including any beneficial owner) upon written request to Bruce L. Arfmann,
Chief Financial Officer, 6175 Longbow Drive, Boulder, Colorado 80301. A copy
of the exhibits to such report will be furnished to any shareholder upon
written request therefor and payment of a nominal fee.
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<PAGE>
COLORADO MEDTECH, INC. PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 17, 1995
The undersigned hereby constitutes, appoints, and authorizes John V.
Atanasoff II and Bruce L. Arfmann, and each of them, as the true and lawful
attorney and Proxy of the undersigned, with full power of substitution and
appointment, for and in the name, place and stead of the undersigned to act for
and vote as designated below, all of the undersigned's shares of the no par
value Common Stock of Colorado MEDtech, Inc., a Colorado corporation, at the
Annual Meeting of the Shareholders to be held November 17, 1995, at Hotel
Boulderado, 2115 13th Street, Boulder, Colorado, at 3:00 p.m., and at any and
all adjournments thereof, with respect to the matters set forth below and
described in the Notice of Annual Meeting dated October 17, 1995, receipt of
which is hereby acknowledged.
1. Approval of the election of each of the seven nominees named herein for the
office of director to serve until the next Annual Meeting of Shareholders or
until their respective successors are elected and qualified.
For all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY to vote for all listed below / /
BELOW) / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
J. Atanasoff II, D. Leffingwell, V. Kornelsen, R. Sullivan, C. Mezey, J. Wolfe,
and M. Barr
2. The Proxy is authorized to vote upon any other business as may properly come
before the Annual Meeting or any adjournments thereof.
________________________________________________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COLORADO MEDTECH,
INC.
PLEASE SIGN AND RETURN THIS PROXY USING THE ENCLOSED PRE-PAID ENVELOPE.
THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
<PAGE>
The undersigned hereby revokes any Proxies as to said shares heretofore
given by the undersigned, and ratifies and confirms all that said attorney and
Proxy may lawfully do by virtue hereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1. THIS PROXY CONFERS DISCRETIONARY AUTHORITY IN
RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE MAILING OF THE
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
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<S> <C>
DATED: -------------------------- , 1995 -----------------------------------------
Signature(s) of Shareholder(s)
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Signature(s) of Shareholder(s)
Signature(s) should agree with the
name(s) shown hereon. Executors,
administrators, trustees, guardians and
attorneys should indicate their capacity
when signing. Attorneys should submit
powers of attorney. When shares are held
by joint tenants, both should sign. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
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