PROXY STATEMENT
PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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
ACCELR8 TECHNOLOGY CORPORATION
------------------------------
(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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $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:
ACCELR8 TECHNOLOGY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 2003
Notice is hereby given that the Annual Meeting (the "Annual Meeting") of
the shareholders (the "Shareholders") of Accelr8 Technology Corporation, a
Colorado corporation (the "Company"), will be held at 2:00 p.m., local time, on
December 16, 2003, at the Warwick Hotel Denver, 1776 Grant Street, Denver,
Colorado 80203, and any adjournments or postponements thereof for the following
purposes:
1. To elect the following three (3) persons to serve as directors of the
Corporation until the next Annual Meeting of Shareholders and
thereafter until their successors shall have been elected and
qualified: Thomas V. Geimer, A. Alexander Arnold III and Charles E.
Gerretson.
2. To ratify the selection of Anton Collins Mitchell LLP as the
independent public accountants of the Company for the fiscal year
ending July 31, 2004.
3. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Only Shareholders of record at the close of business on November 17, 2003,
shall be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. All Shareholders are cordially invited to attend the
Annual Meeting in person.
By Order of the Board of Directors
/s/ Thomas V. Geimer
--------------------
Thomas V. Geimer, Chairman of the Board
November 18, 2003
Denver, Colorado
IF YOU DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING AND WISH YOUR SHARES OF
COMMON STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A
RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS
ENCLOSED FOR THAT PURPOSE.
ACCELR8 TECHNOLOGY CORPORATION
303 East Seventeenth Avenue, Suite 108
Denver, Colorado 80203
PROXY STATEMENT
Dated November 18, 2003
ANNUAL MEETING OF SHAREHOLDERS
FOR THE FISCAL YEAR ENDED JULY 31, 2003
TO BE HELD ON DECEMBER 16, 2003
GENERAL
-------
This Proxy Statement is being furnished to the shareholders of Accelr8
Technology Corporation, a Colorado corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors") from holders (the "Shareholders") of outstanding shares of
common stock, no par value, of the Company (the "Common Stock"), for use at the
Annual Meeting of the Shareholders for the fiscal year ended July 31, 2003, to
be held at 2:00 p.m., local time, on December 16, 2003, at the Warwick Hotel
Denver, 1776 Grant Street, Denver, Colorado 80203, and any adjournments or
postponements thereof (the "Annual Meeting"). This Proxy Statement, Notice of
Annual Meeting of Shareholders and the accompanying Proxy Card are first being
mailed to shareholders on or about November 18, 2003.
VOTING SECURITIES AND VOTE REQUIRED
-----------------------------------
Only Shareholders of record at the close of business on November 17, 2003
(the "Record Date") are entitled to notice of and to vote the shares of Common
Stock, no par value, of the Company held by them on such date at the Annual
Meeting or any and all adjournments thereof. As of the Record Date, there were
9,679,960 shares of Common Stock issued and outstanding with 1,129,110 shares
held in a Rabbi Trust by the Company for the benefit of Thomas V. Geimer. As a
result, there are 8,550,850 shares entitled to vote at the Company's Annual
Meeting. There was no other class of voting securities outstanding as of the
Record Date.
Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Annual Meeting or any
adjournments thereof.
The presence, in person or by proxy, of the holders of 33% of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Annual Meeting. Assuming that a quorum is present, the affirmative vote of the
holders of a majority of the shares of Common Stock present at the Annual
Meeting in person or by proxy will be required to (i) elect each of the three
nominees for directors of the Company and (ii) ratify the selection of Anton
Collins Mitchell LLP as the independent public accountants of the Company for
the fiscal year ending July 31, 2004.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will
have the effect of a negative vote on the proposals being submitted. Abstentions
may be specified on all proposals. A broker "non-vote" will have no effect on
the outcome of any of the proposals.
If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying Proxy will vote "FOR" the election of the three
nominees for directors of the Company and "FOR" the ratification of the
selection of Anton Collins Mitchell LLP as the independent public accountants of
the Company for the fiscal year ending July 31, 2004, and as recommended by the
Board of Directors with regard to any other matters or, if no such
recommendation is given, in their own discretion. The Company's executive
officers, directors and key employees have advised the Company that they intend
to vote their shares (including those shares over which they hold voting power),
representing approximately 11.96% as of October 15, 2003, of the outstanding
shares of Common Stock, in favor of each of the proposals above. Each Proxy
granted by a Shareholder may be revoked by such Shareholder at any time
thereafter by writing to the Secretary of the Company prior to the Annual
Meeting, or by execution and delivery of a subsequent Proxy or by attendance and
voting in person at the Annual Meeting, except as to any matter or matters upon
which, prior to such revocation, a vote shall have been cast pursuant to the
authority conferred by such Proxy.
Representatives from Anton Collins Mitchell LLP are expected to attend the
Annual Meeting. As a result, the Company anticipates that a representative from
Anton Collins Mitchell LLP will be available to make a statement or respond to
any questions at the Annual Meeting.
The cost of soliciting these Proxies, consisting of the printing, handling,
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.
In order to assure that there is a quorum, it may be necessary for certain
officers, directors, regular employees and other representatives of the Company
to solicit Proxies by telephone, facsimile or in person. These persons will
receive no extra compensation for their services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
---------------------
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of October 15, 2003 by (i) each
person who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock; (ii) each of the Company's executive
officers and directors; and (iii) all executive officers and directors as a
group. On October 15, 2003, the Company had 9,679,960 shares of its Common Stock
issued and outstanding. This calculation includes the 1,129,110 shares which are
held by the Rabbi Trust for the benefit of Thomas V. Geimer that are treated as
2
outstanding in the calculation of beneficial ownership but are not included in
Mr. Geimer's total as set forth below in footnote 1, and have not been included
in the calculation of the shares entitled to vote. Common Stock not outstanding
but deemed beneficially owned by virtue of the right of an individual to acquire
shares is treated as outstanding only when determining the amount and percentage
of Common Stock owned by such individual. Except as noted, each person or entity
has sole voting and sole investment power with respect to the shares shown.
Name and Address Shares Beneficially Owned
of Beneficial Owner Number Percent
------------------- ------ -------
Thomas V. Geimer (1) 348,300 3.39%
303 East 17th Avenue, Suite 108
Denver, Colorado 80203
Harry J. Fleury (2) 233,750 2.34%
303 East 17th Avenue, Suite 108
Denver, Colorado 80203
A. Alexander Arnold III(3) 938,000 9.34%
845 Third Ave., 6th Flr.
New York, NY 10021
Charles E. Gerretson(4) 86,150 0.86%
303 East 17th Avenue, Suite 108
Denver, Colorado 80203
Executive Officers and Directors 1,606,200 15.48%
as a Group (4 persons)
DDx, Inc. 1,606,793 16.13%
7000 Broadway, Suite 3-305
Denver, CO 80221
--------------------
(1) Does not include 1,129,110 shares, which were purchased by Mr. Geimer upon
exercise of warrants and options. Mr. Geimer exercised these options and
warrants on October 14, 1997, and simultaneously contributed the shares
acquired to a Rabbi Trust. For further information, see Notes 6 and 9 to
Financial Statements included in the Form 10-KSB for the fiscal year ended
July 31, 2003, which has been filed with the SEC and which has been sent to
all the shareholders along with this proxy statement. Calculation also
includes 300,000 shares, which may be purchased by Mr. Geimer upon exercise
of options.
(2) Includes 40,000 shares, which may be purchased by Mr. Fleury upon exercise
of options.
(3) Includes 800,000 shares held by four trusts. Mr. Arnold merely serves as
trustee for each of those trusts, but is not a beneficiary of and has no
pecuniary interest in any of those trusts. Also includes 63,000 shares held
in investment advisory accounts for which Mr. Arnold serves as the
investment advisor. Also includes 75,000 shares, which may be purchased by
Mr. Arnold upon exercise of options.
(4) Includes 73,250 shares owned directly by Mr. Gerretson. Also includes
12,900 shares held in brokerage and retirement accounts of individuals in
which Mr. Gerretson has the power and authority to dispose of the shares
held by these accounts. Mr. Gerretson disclaims any beneficial ownership
with respect to such shares.
3
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors currently consists of three members, each of whom is
proposed for election at the Annual Meeting.
The Board of Directors maintains a Compensation Committee and an Audit
Committee. The Audit Committee and Compensation Committee is comprised of
Messrs. Arnold and Gerretson, the Company's independent, non-management
directors. The primary function of the Compensation Committee is to review and
make recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Company's stock option
plans. The function of the Audit Committee is to review and approve the scope of
audit procedures employed by the Company's independent auditors, to review and
approve the audit reports rendered by the Company's independent auditors and to
approve the audit fee charged by the independent auditors. The Audit Committee
reports to the Board of Directors with respect to such matters and recommends
the selection of independent auditors. The Audit Committee's financial expert is
Charles E. Gerretson.
During fiscal year ended July 31, 2003, the board of directors held one
board meeting with all board members present, the Audit Committee held four
meetings with no director attending fewer than 75% of the aggregate of all the
meetings of the Audit Committee. The Compensation Committee held one meeting
during the fiscal year, prior to Mr. Gerretson's appointment as a Director of
the Company, with both members attending the meeting.
The Audit Committee has also discussed with Anton Collins Mitchell LLP the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
The Audit Committee has received and reviewed the written disclosures and
the letter from Anton Collins Mitchell LLP required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
amended, and has discussed with Anton Collins Mitchell LLP their independence.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements
referred to above be included in the Company's Annual Report on Form 10-KSB for
the year ended July 31, 2003 filed with the Securities and Exchange Commission.
As noted above, the members of the Audit Committee are A. Alexander Arnold
III and Charles E. Gerretson, both of whom are independent directors as defined
in Section 121 of the American Stock Exchange listing standards, as applicable
and as may be modified or supplemented.
Effective as of June 9, 2000, the Board of Directors of the Company adopted
a written charter for the Audit Committee, a copy is attached hereto as Appendix
A.
4
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for
services in all capacities to the Company in the two fiscal years ended July 31,
2003, of Thomas V. Geimer and Harry J. Fleury, the Company's most highly
compensated executive officers.
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other Securities
Name and Fiscal Annual Underlying
Principal Position Year Salary Other Compensation Options
------------------ ---- ------ ----- ------------ -------
Thomas V. Geimer 2003 $142,500 $75,000(1) $ -- --
Chief Executive Officer 2002 $100,507 $75,000(1) $125,000(5) 200,000(2)
and Chief Financial
Officer
Harry J. Fleury 2003 $ 75,000 $16,042(3) $ -- --
President 2002 $ 75,000 $ 5,678(3) $ 35,000(5) 10,000(4)
----------------------------
(1) Represents deferred compensation for Mr. Geimer pursuant to the Company's
deferred compensation plan, $75,000 of which vested during each of the
fiscal years ended July 31, 2003 and 2002.
(2) Includes 100,000 options previously granted to Mr. Geimer and the
replacement of 200,000 options that were previously granted to Mr. Geimer,
which were canceled pursuant to a stock option exchange agreement during
the fiscal year ended July 31, 2002.
(3) Includes sales commissions earned by Mr. Fleury on revenues from certain
sales.
(4) Represents stock options to purchase 10,000 shares at an exercise price of
$2.50 per share. On October 19, 1998, Mr. Fluery was granted 50,000 options
to purchase our common stock, 40,000 of which had vested as of July 31,
2002. The final 10,000 options expired without vesting.
(5) The Company reimbursed Messrs. Geimer and Fleury on an after tax basis for
civil penalties paid by them in connection with the settlement of the SEC
matter. (See "Legal Proceedings" and "Certain Transactions.")
5
Option Values. The following table provides certain information concerning
the fiscal year end value of unexercised options held by Mr. Geimer and Mr.
Fleury.
Aggregated Option Exercises in 2003 Fiscal Year
and Fiscal Year End Option Values
Shares Number of Unexercised Value of Unexercised
Acquired on Value Options at Fiscal Year In-the-Money Options
Name Exercise Realized(1) End Fiscal Year End(2)
-------------------------------------------------------------------------------------------
Exer- Unexer- Exer- Unexer-
cisable cisable cisable cisable
------- ------- ------- -------
Thomas V. Geimer 0 0 300,000 0 $655,000 $0
Harry J. Fleury 100,000 $73,000 40,000 0 $ 46,000 $0
---------------------------------
(1) Value calculated by determining the difference between the closing sales
price on the date of exercise, April 22, 2003, of $1.09 per share and the
exercise price of the options.
(2) Value calculated by determining the difference between the closing sales
price on July 31, 2003, of $3.65 per share and the exercise price of the
options. Fair market value was not discounted for restricted nature of any
stock purchased on exercise of these options.
Employment Agreements
Effective December 1, 2002, we entered into a new employment agreement with
our Chairman, Chief Executive Officer and Chief Financial Officer and Secretary,
Mr. Thomas V. Geimer. The agreement was negotiated and approved by the
Compensation Committee. The new agreement provides for an annual base salary of
$165,000 with annual deferred compensation of $75,000. The new agreement expires
on December 31, 2007. In the event of termination by mutual agreement,
termination "with cause," as defined in the agreement, death or permanent
incapacity or voluntary termination, Mr. Geimer or his estate would be entitled
to the sum of the base salary and unreimbursed expenses accrued to the date of
termination and any other amounts due under the agreement. In the event of
termination "without cause," as defined in the agreement, Mr. Geimer would be
entitled to the sum of the base salary and unreimbursed expenses accrued to the
date of termination and any other amounts due under the agreement and an amount
equal to the greater of Mr. Geimer's annual base salary (12 months of salary) or
any other amounts remaining due to Mr. Geimer under the agreement, which as of
July 31, 2003 would be $1,107,115. Additionally, in the event of a change in
control, any unpaid amounts due under the initial term of the agreement for both
base salary and deferred compensation would be payable plus five times the sum
of the base salary and deferred compensation.
6
Compensation Pursuant to Plans
Employee Retirement Plan. During fiscal year 1996, we established a
SARSEP-IRA employee pension plan that covers substantially all full-time
employees. Under the plan, employees have the option to contribute up to the
lesser of 15% of their compensation or $10,500. We may make discretionary
contributions to the plan based on recommendations from the Board of Directors.
We made no contribution for the fiscal years ended July 31, 2003 or 2002. The
plan was terminated during the year ended July 31, 2003.
Deferred Compensation Plan. In January 1996, we established a deferred
compensation plan for our employees. We may make discretionary contributions to
the plan based upon recommendations from the Board of Directors. For each of the
fiscal years ended July 31, 2003 and 2002, we contributed $75,000 to the plan.
The $75,000 contribution for the fiscal year ended July 31, 2003 was made on
October 14, 2003.
1987 Non-Qualified Stock Option Plan. We currently have no outstanding
options issued to employees of the Company pursuant to our 1987 non-qualified
stock option plan (the "1987 Plan"). During the year, 100,000 options at a price
of $.36 each were exercised for $36,000 and 6,500 options at a price of $.36
expired. During the 1994 fiscal year, the Board of Directors adopted a
resolution providing that for so long as a recipient of an option grant remains
in the employ of the Company, the options held will not expire and if the
recipient's employment is terminated, the holder will have up to 90 days after
termination to exercise any vested but previously unexercised options. In 1997,
the Board of Directors passed a further resolution clarifying that upon the
death of an optionee, an unexercised option will remain exercisable for a period
of one year by, and only by, the person to whom the optionee's rights have
passed by will or by the laws of descent and distribution. All options
previously granted were administered by our Board of Directors. The options
provide for adjustment of the number of shares issuable in the case of stock
dividends or stock splits or combinations and adjustments in the case of
recapitalization, merger or sale of assets. Since all 300,000 shares originally
reserved had been issued the plan has been terminated.
On October 14, 1997, Thomas V. Geimer exercised an aggregate of 1,140,000
warrants and options to acquire 1,140,000 shares of the Company's Common Stock
at an exercise price of $0.24 per share. Under the terms of the Rabbi Trust, we
will hold the shares in trust and carry the shares as held for employee benefit
by the Company. The Rabbi Trust provides that upon Mr. Geimer's death,
disability, or termination of his employment the shares will be released ratably
over the subsequent ten (10) years, unless the Board of Directors determines
otherwise. See Note 6 and 9 to the Financial Statement included in Form 10-KSB
for the year ended July 31, 2003, which has been filed with Securities and
Exchange Commission and which has been sent to all of the shareholders along
with this proxy statement.
The 1996 Stock Option Plans
The Board of Directors of the Company has adopted an incentive stock option
plan (the "Qualified Plan") which provides for the grant of options to purchase
an aggregate of not more than 700,000 shares of the Company's Common Stock. The
purpose of the Qualified Plan is to make options available to management and
7
employees of the Company in order to provide them with a more direct stake in
the future of the Company and to encourage them to remain with the Company. The
Qualified Plan provides for the granting to management and employees of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code").
The Board of Directors of the Company has adopted a non-qualified stock
option plan (the "Non-Qualified Plan") which provides for the grant of options
to purchase an aggregate of not more than 300,000 shares of the Company's Common
Stock. The purpose of the Non-Qualified Plan is to provide certain key
employees, independent contractors, technical advisors and directors of the
Company with options in order to provide additional rewards and incentives for
contributing to the success of the Company. These options are not incentive
stock options within the meaning of Section 422 of the Code.
The Qualified Plan and the Non-Qualified Plan (the "Stock Option Plans")
are administered by a committee (the "Committee") appointed by the Board of
Directors which determines the persons to be granted options under the Stock
Option Plans and the number of shares subject to each option. No options granted
under the Stock Option Plans are transferable by the optionee other than by will
or the laws of descent and distribution and each option is exercisable, during
the lifetime of the optionee, only by such optionee. Any options granted to an
employee terminate 90 days after his ceasing to be an employee, except in
limited circumstances, including death of the employee, and where the Committee
deems it to be in the Company's best interests not to terminate the options.
The exercise price of all incentive stock options granted under the
Qualified Plan must be equal to the fair market value of such shares on the date
of grant as determined by the Committee, based on guidelines set forth in the
Qualified Plan. The exercise price may be paid in cash or (if the Qualified Plan
shall meet the requirements of rules adopted under the Exchange Act) in Common
Stock or a combination of cash and Common Stock. The term of each option and the
manner in which it may be exercised will be determined by the Committee, subject
to the requirement that no option may be exercisable more than 10 years after
the date of grant. With respect to an incentive stock option granted to a
participant who owns more than 10% of the voting rights of the Company's
outstanding capital stock on the date of grant, the exercise price of the option
must be at least equal to 110% of the fair market value on the date of grant and
the option may not be exercisable more than five years after the date of grant.
The Stock Option Plans were approved by our shareholders at a special
shareholders meeting held on November 8, 1996. At the annual meeting of
shareholders held on December 12, 2002, shareholders approved the following
amendments to the Qualified Plan and the Non-Qualified Plan: (i) the Committee
was given the power to amend and alter the Qualified Plan and the Non-Qualified
Plan so long as the amendments do not affect any outstanding options; (ii)
provide that any shares cancelled, terminated, or expired pursuant to the
Qualified Plan and the Non-Qualified Plan be made available for purposes of the
Qualified Plan and the Non-Qualified Plan; (iii) provide that the cashless
exercise provision of the Qualified Plan and the Non-Qualified Plan be in the
sole discretion of the Committee; and (iv) extended the expiration date of the
Qualified Plan and the Non-Qualified Plan until December 12, 2012.
8
As of July 31, 2003, 300,000 options had been granted to the Company's
Board members and certain consultants pursuant to the Non-Qualified Plan with
225,000 options outstanding and 75,000 options exercised. As of July 31, 2003, a
total of 532,500 options had been granted to employees pursuant to the Qualified
Plan with 530,000 options outstanding and 2,500 options exercised. The Company
has 200,000 options outstanding that were issued outside of the Qualified Plan
and Non-Qualified Plan.
CERTAIN TRANSACTIONS
During fiscal year 1996, we established a deferred compensation plan for
our employees. We may make discretionary contributions to the plan based on
recommendations from the Board of Directors. As of July 31, 2003, the Board of
Directors had authorized deferred compensation totaling $600,000 since fiscal
year 1996 of which is fully vested to Mr. Geimer of which $525,000 had been
funded.
In connection with the settlement reached with the SEC on July 12, 2001, we
agreed to indemnify the individual officers with respect to the civil penalties
assessed against the individual officers on an after tax basis. For more
information, please see "Legal Proceedings--Concluded Legal Matter."
There were no other transactions or series of transactions for the fiscal
year ended July 31, 2003, nor are there any currently proposed transactions, or
series of the same to which we are a party, in which the amount involved exceeds
$60,000 and in which, to the knowledge of the Company, any director, executive
officer, nominee, 5% shareholder or any member of the immediate family of the
foregoing persons, have or will have a direct or indirect material interest.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act, generally requires the Company's
directors and executive officers and persons who own more than 10% of a
registered class of the Company's equity securities ("10% owners") to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors and executive
officers and 10% owners are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on review of copies of such
reports furnished to us and verbal representations that no other reports were
required to be filed during the fiscal year ended July 31, 2003, all Section
16(a) filing requirements applicable to its directors, executive officers and
10% owners were met, except that Harry J. Fluery, an officer of the Company
failed to timely file a Form 4 in April disclosing one transaction. Mr. Fluery
filed a Form 4 on May 29, 2003 disclosing this transaction. David C. Wilhelm, a
former director of the Company, failed to timely file a Form 4 in July to report
two transactions. Mr. Wilhelm filed a Form 4 on August 6, 2003 disclosing these
transactions. Further, DDx sold approximately 207,000 shares to individuals
during the fiscal year ended July 31, 2003, and as of the date of this report
has failed to file a Form 4 disclosing the transactions.
9
LEGAL PROCEEDINGS
Concluded Legal Matter
On November 16, 1999, the SEC filed suit in the United States District
Court for the District of Colorado against the Company, Thomas V. Geimer, Harry
J. Fleury, and James Godkin (collectively the "Defendants"), Civil Action No.
99-D-2203. The SEC sought an injunction permanently restraining and enjoining
each defendant from violating Section 10(b) of the Exchange Act, and Rule 10b-5
promulgated thereunder; Section 13(a) of the Exchange Act, and Rules 12b-20,
13a-1, and 13a-13 promulgated thereunder, and, in addition, that Mr. Geimer and
Mr. Godkin be enjoined from future violations of Section 13(b)(2) of the
Exchange Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder
related to securities fraud. The SEC alleged that the Defendants made material
misrepresentations of fact regarding the capability of certain of the Company's
products, and the Company's financial condition, including its revenues and
earnings and that Mr. Geimer and Mr. Godkin failed to implement, or
circumvented, a system of internal accounting controls, falsified books and
records, and made misrepresentations to the Company's accountants. On July 12,
2001, the Defendants, without admitting or denying the allegations of the Third
Amended Complaint filed by the SEC, consented to the entry of Final Orders in
which the court dismissed the securities fraud claims against all Defendants
with prejudice. The Court made no findings that any violation of law occurred,
and enjoined the Defendants from future violations of Section 13 of the Exchange
Act, and the regulations thereunder referred to above. None of the Defendants
were found to have made any misstatement as to the Company's product's
performance or capabilities or misstatements to the Company's accountants nor
did the suit result in any restatement of the Company's financial statements. In
connection with the settlement, Mr. Geimer paid a civil penalty of $65,000, Mr.
Fleury paid a civil penalty of $20,000, and Mr. Godkin paid a civil penalty of
$20,000. The costs of the defense plus the civil penalties were borne by the
Company.
Pending Legal Matter
The Company is party to one current legal proceeding, which is a lawsuit
against Deloitte & Touche LLP and the corresponding Deloitte & Touche LLP
counterclaim against the Company.
On November 20, 2002, the Company initiated an action against Deloitte &
Touche LLP ("Deloitte"), the Company's former auditors, captioned Accelr8
Technology Corporation v. Deloitte & Touche LLP, Case No. 02CV8102, District
Court, City and County of Denver, State of Colorado. In this action, the Company
seeks damages from Deloitte for breach of contract as a result of Deloitte's
resignation as the Company's auditors. On January 13, 2003, Deloitte answered
the Complaint and filed a counterclaim against the Company, and third-party
claims against Thomas V. Geimer and Harry J. Fleury. The counter-claim asserts
claims for breach of contract, deceit based on fraud, and negligent
misrepresentation and seeks damages estimated at $349,472. Third-party claims
allege deceit based on fraud and negligent misrepresentation, and also seek
10
unspecified damages. On February 18, 2003, the Company, as counterclaim
defendant, and Messrs. Geimer and Fleury, as third-party defendants, moved to
dismiss the counterclaims and third-party complaint. On May 29, 2003, the Court
denied the motion to dismiss the counterclaims against the Company, and granted
the motion to dismiss the third-party claims against Messrs Geimer and Fleury.
The Company believes it has substantial defenses to the counterclaims and the
Company intends to contest the counterclaims vigorously. However, there can be
no assurance that the resolution of the counterclaims will not have a material
adverse effect on the Company.
PROPOSAL 1
ELECTION OF THREE (3) PERSONS
TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next Annual
Meeting of Shareholders and thereafter until their successors shall have been
elected and qualified. The number of directors presently authorized by the
Bylaws of the Company shall be not less than three (3) nor more than seven (7).
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them for the election of the following
nominees, all of whom are now members and constitute the Company's Board of
Directors. The Company is advised that all nominees have indicated their
availability and willingness to serve if elected. In the event that any nominee
becomes unavailable or unable to serve as a director of the Company prior to the
voting, the proxy holder will vote for a substitute nominee in the exercise of
his best judgment.
INFORMATION CONCERNING NOMINEES
Thomas V. Geimer, 56, has been the Chairman of the Board of Directors and a
director of Accelr8 since 1987. He currently serves as the Chief Executive
Officer, Chief Financial Officer and Secretary of the Company. Mr. Geimer is
responsible for development of our business strategy, day-to-day operations,
accounting and finance functions. Before assuming full-time responsibilities at
the Company, Mr. Geimer founded and operated an investment banking firm. Mr.
Geimer has been involved in certain legal proceedings relating to services
performed for the Company. For detailed information concerning these legal
proceedings, see "Legal Proceedings-Concluded Legal Matters."
Alexander Arnold III, 62, has served as a director of the Company since
September 1992. For the past 25 years Mr. Arnold has served as a Managing
Director of Trainer, Wortham & Co., Inc., a New York City-based investment
counselor firm, which Mr. Arnold co-founded. Mr. Arnold received a Bachelor of
Arts degree from Rollins College in 1964 and a Masters of Business
Administration from Boston University in 1966.
11
Charles E. Gerretson, 57, was appointed a director of the Company on July
19, 2003. For the past 28 years, Mr. Gerretson has served as the President of
Gerretson Realty, Inc., a Denver Colorado based real estate firm, which Mr.
Gerretson founded. Mr. Gerretson was previously employed as a certified public
accountant with a major international accounting and consulting firm. Mr.
Gerretson received a Bachelor of Science degree in Business Administration from
the University of Minnesota in 1968.
Board Recommendation
The Board recommends a vote FOR the election of each of the three nominees
for directors of the Company.
PROPOSAL 2
RATIFICATION OF SELECTION OF
ANTON COLLINS MITCHELL LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS OF COMPANY
On August 28, 2002, the Company's independent public accountants, Levine,
Hughes & Mithuen, Inc. (" LH&M"), resigned. LH&M advised the Company that it was
resigning as the Company's independent public accountants as a result of a
decision by LH&M's management to limit their involvement with the audit of
public companies filing periodic reports under the Securities Exchange Act of
1934, as amended.
The reports by LH&M on the Company's financial statements during the
preceding two years contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope, or accounting
principles.
During the preceding two fiscal years and through August 28, 2002, there
were no disagreements between the Company and LH&M on any matter of accounting
principles or practices, financial statement disclosure, or audit scope or
procedure, which, if not resolved to LH&M's satisfaction, would have caused LH&M
to make reference to the subject matter of the disagreements in connection with
LH&M's reports on the Company's financial statements.
During the preceding two fiscal years and through August 28, 2002, there
were no reportable events required to be disclosed pursuant to Item
304(a)(1)(v).
Pursuant to Item 304(a)(3), on August 29, 2002, LH&M furnished the Company
a letter addressed to the Securities and Exchange Commission stating it agrees
with the statements made by the Company in response to Item 304(a). A copy of
the LH&M letter was included on the Form 8-K filed on August 29, 2002 and is
incorporated herein by reference.
On August 29, 2002, the Company engaged Anton Collins Mitchell LLP, an
independent member of the BDO Seidman Alliance, as the new independent public
accountants.
12
The Board of Directors has selected Anton Collins Mitchell LLP as
independent public accountants of the Company for the fiscal year ending July
31, 2004, and has further directed that the Company submit the selection of
independent public accountants for ratification by shareholders at the Annual
Meeting of Shareholders.
Fees Paid to the Independent Auditors
Audit Fees
The aggregate fees billed by Anton Collins Mitchell LLP for professional
services rendered for the audit of the Company's annual consolidated financial
statements for the year ended July 31, 2003 including the reviews of the
unaudited interim financial statements of the Company's Form 10-QSBs was
approximately $39,561. The aggregate fees billed by Levine, Hughes & Mithuen,
Inc. for professional services rendered for the audit of the Company's annual
consolidated financial statements for the year ended July 31, 2003 were $1,500.
(Anton Collins Mitchell LLP and Levine, Hughes & Mithuen professional services
collectively referred to as "Audit Services").
All Other Fees
Anton Collins Mitchell LLP also billed $1,025 for income tax services.
The Audit Committee has determined the rendering of all non-audit services
by Anton Collins Mitchell LLP is compatible with maintaining the auditors'
independence.
Board Recommendation
The Board recommends a vote FOR the ratification of the selection of Anton
Collins Mitchell LLP as independent public accountants of the Company for the
fiscal year ending July 31, 2004.
GENERAL
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting of Shareholders other than those stated in the
Notice of Annual Meeting and referred to in this Proxy Statement. If any other
matters should properly come before the Annual Meeting, it is intended that the
proxies in the accompanying form will be voted as the persons named therein may
determine in their discretion.
Shareholder Proposals
If any shareholder of the Company intends to present a proposal for
consideration at the 2004 Annual Meeting of Shareholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's offices, 303 East Seventeenth Avenue, Suite 108,
Denver, Colorado 80203, Attention: Secretary, not later than July 21, 2004.
By Order of the Board of Directors
/s/ Thomas V. Geimer
--------------------
Thomas V. Geimer,
Chairman of the Board
13
APPENDIX A
ACCELR8 TECHNOLOGY CORPORATION
AUDIT COMMITTEE CHARTER
Organization
------------
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the board of directors, would interfere
with their exercise of independent judgment as a committee member. All members
of the Committee shall have a working familiarity with basic finance and
accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant. The
members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
Statement of Policy
-------------------
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to accounting, reporting practices of the
corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, and the financial management of the corporation.
Responsibilities
----------------
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation and its
divisions and subsidiaries.
Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current year
and the audit procedures to he utilized, and at the conclusion thereof
review such audit, including any comments or recommendations of the
independent auditors.
A-1
Review with the independent auditors, and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the corporation, and elicit any recommendations for the
improvement of such internal control procedures or particular areas where
new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be deemed
illegal or otherwise improper. Further, the committee periodically should
review company policy statements to determine their adherence to the code
of conduct.
Inquire of management and the independent accountant about significant
risks or exposures and assess the steps management has taken to minimize
such risk to the company.
Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Any changes
in accounting principles should be reviewed.
Provide sufficient opportunity for the independent auditors to meet with
the members of the audit committee without members of management present.
Among the items to be discussed in these meetings are the independent
auditors evaluation of the corporation's financial, accounting, and
auditing personnel, and the cooperation that the independent auditors
received during the course of the audit.
Review accounting and financial human resources and succession planning
within the company.
Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
Review policies and procedures with respect to officers' expense accounts
and perquisites, including their use of corporate assets, and consider the
results of any review of these areas by the independent accountant.
Prepare a letter for inclusion in the annual report that describes the
committee's composition and responsibilities, and how they were discharged.
A-2
ACCELR8 TECHNOLOGY CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
December 16, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of ACCELR8 TECHNOLOGY CORPORATION, a Colorado
corporation (the "Company"), acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, dated November 18, 2003, and hereby
appoints Thomas V. Geimer and Henry F. Schlueter, or either of them, each with
the power of substitution, as Attorneys and Proxies to represent and vote all
shares of Common Stock of the Company which the undersigned would be entitled to
vote at the Annual Meeting of Shareholders and at any adjournment or
adjournments thereof, hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said Attorneys and Proxies may do or cause to
be done by virtue thereof with respect to the following matters:
1. Election of each of the following three (3) persons to serve as
directors of the Corporation until the next Annual Meeting of
Shareholders and thereafter until their successors shall have been
elected and qualified:
Thomas V. Geimer
FOR /___/ AGAINST /___/ ABSTAIN /___/
A. Alexander Arnold III
FOR /___/ AGAINST /___/ ABSTAIN /___/
Charles E. Gerretson
FOR /___/ AGAINST /___/ ABSTAIN /___/
2. Ratification of the selection of Anton Collins Mitchell LLP as the
independent public accountants of the Company for the fiscal year
ending July 31, 2004.
FOR /___/ AGAINST /___/ ABSTAIN /___/
3. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
This Proxy, when properly executed, will be voted as directed. If no direction
is indicated, the Proxy will be voted FOR the election of each of the nominees
listed above to the Board of Directors and FOR the proposal to ratify the
selection of Anton Collins Mitchell LLP as the independent public accountants of
the Company for the fiscal year ending July 31, 2004.
Dated:________________________, 2003
---------------------------
---------------------------
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
Please sign exactly as name appears on the label ATTACHED TO THIS PROXY. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as it
appears hereon. If a corporation, please sign in full corporate name by an
authorized officer and affix corporate seal. If a partnership, please sign in
full partnership name by authorized person. No Postage is required if returned
in the enclosed envelope and mailed in the united states.