FORM 10-K ANNUAL REPORT
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended April 30, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _____________ to ______________
Commission file number: 2-33108
ACCESS CORPORATION
------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0673364
- ---------------------- --------------------------------------
State of Incorporation I. R. S. Employer Identification Number
4350 Glendale-Milford Road, Suite 250, Cincinnati, Ohio 45242-3700
- ------------------------------------------------------- ---------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (l) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days. Yes X . No ___.
Indicate by check mark if disclosure of delinquent
fillers pursuant to Item 405 of Regulation S-K ( 229.405 of this
chapter) is not contained herein, and will be contained, to the
best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ] Inapplicable
State the aggregate market value of the voting stock
held by non-affiliates of the registrant. The aggregate market
value shall be computed by reference to the price at which the
stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date
of filing. Because there is no established market for the
Common Stock of the Company, it is not possible to determine the
aggregate market value of such Common Stock held by non-affialiates
Indicate the number of shares outstanding of each of
the registrant's classes of common stock, as of the close of the
period covered by this report. Common Stock, without par value:
3,436,987 shares outstanding and Class A Common Stock, without
par value: 1,428,572 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The 1995 Annual Report to the shareholders of the Company for
the fiscal year ended April 30, 1995, is incorporated herein by
reference in Parts I and II to the extent specified in such
Parts.
PART I
ITEM 1. BUSINESS
The registrant ("ACCESS" or the "Company") was
incorporated under the laws of the State of Ohio on November 18,
1963. Its executive offices are located at 4350 Glendale-Milford
Road, Suite 250, Cincinnati, Ohio 45242-3700, and its telephone
number is (513) 786-8350.
DESCRIPTION OF PRODUCTS AND SERVICES
- -------------------------------------
ACCESS enhances the quality of its customers' products
by providing software solutions for their technical processes.
ACCESS' software allows its customers to manage the process of
design changes, release of those changes, and the efficient
storage, indexing, and retrieval of both engineering drawings
and related technical documentation.
ACCESS serves primarily engineering customers in
discrete and process manufacturing. Its applications benefit
companies in the medical products, pharmaceutical, computer and
electronic, petrochemical, defense, and automotive industries.
In addition, companies under strict government regulation have
found ACCESS' applications beneficial in organizing and
controlling compliance procedures.
The Cincinnati-based company has two business units:
Technical Document Management Systems (TDMS) and Service/Manufacturing.
TDMS BUSINESS UNIT
- ------------------
ACCESS' application software features three proprietary
products: EDICS/DM (Engineering Document Image Control
System/Document Management), EDICS/RM (Engineering Document
Image Control System/Release Management), and ECC (Electronic
Change Control), each of which may be configured to specific
organizational needs.
A database application for managing documents and
engineering-related information, EDICS processes both text and A
through E-size drawings that may be scanned or electronically
imported from CAD. These documents, from multiple sources, are
integrated into a single system which fully automates the
revision process and provides flexible tools for viewing,
editing, and printing.
EDICS also enables a user to comply with requirements of
regulatory agencies, such as the Food and Drug Administration,
by allowing storage and immediate retrieval of product and
process information.
ECC may be added to the EDICS system to improve control
over the design and processing changes. It provides advanced
functionality to automate the entire document change process,
including multiple approval processing and notification,
rejection handling, in-process review, approval history, and
change process performance reporting.
ECC automates a company's engineering change control
process consistent with its established procedures and
operational requirements. ECC correlates change documents with
markups and affected drawings for the length of the change
cycle. It can be configured to facilitate concurrent reviews
(now a Computer Aided Acquisition and Logistics Support, CALS,
requirement for many Department of Defense contracts).
Both EDICS and ECC support effective concurrent
engineering environments, which involve the cooperative
interaction of design, manufacturing, support personnel,
suppliers, and customers. Concurrent engineering is intended to
reduce time-to-market and increase manufacturability,
serviceability, and reliability.
ACCESS has been approved as an Industry Application
Specialist by IBM's Industrial Sector Marketing. In this
relationship, ACCESS provides EDICS/400 and ECC/400 for use on
the IBM AS/400.
ACCESS also supplies EDICS and ECC in the UNIX
environment running on IBM's RS/6000 and on both AT&T and
Hewlett Packard UNIX platforms.
SERVICE/MANUFACTURING BUSINESS UNIT
- ------------------------------------
Within the Service/Manufacturing business unit, the
Company provides quality field maintenance including hardware
and software service on a nationwide basis to the Company's
installed customer base.
In addition to maintaining ACCESS-installed systems,
ACCESS' service group also maintains non-ACCESS electronic and
electromechanical equipment such as card embossers, microfiche
duplicators, microfilm scanners, large drawing format scanners,
and highly sophisticated 5-1/4" and 12" laser.
ACCESS continues to pursue additional third-party
service opportunities with manufacturers of electronic
electromechanical products who require a rapid on-site service
response but whose customer base is not large enough to support
a nationwide service network.
MARKETING
- ---------
The Company markets its products for the most part
directly in the United States. The Company has been approved as
an Industry Application Specialist by IBM's Industrial Sector
Marketing for the AS/400. Marketing operations are conducted
primarily from the Company's headquarters in Cincinnati, Ohio.
The Company employs four sales and marketing personnel.
Technical Document Management Systems (TDMS), as well
as related computer systems, are produced and configured only in
response to firm orders. At the end of fiscal years 1995 and
1994, TDMS backlog totaled approximately $1,053,900 and
$2,615,900, respectively. The TDMS backlog at the end of 1995
fiscal year is expected to be delivered within the 1996 fiscal
year.
Effective at the beginning of the third quarter of
fiscal 1994, the Company discontinued its operations with
respect to its Hardware Engineering Services and Contract
Manufacturing line of business. It is limiting its
manufacturing to supplying cards for the micrographic equipment
sold in prior years and the parts required to support existing
equipment. The Company has completed or transferred all
contracts and commitments for its Engineering and Contract
Manufacturing customers.
At present, there are ACCESS systems installed in 48
states and in Puerto Rico, Jamaica, Mexico, Japan, Canada,
Europe, China, the Middle East, Australia and the CIS (the
former USSR). There is no recurring geographic market
concentration with respect to the sale of ACCESS systems in the
United States, and in fiscal year 1995, no more than 13% of the
Company's revenues were derived from operations in any single
state.
Aggregate sales to international customers represented
4% of the Company's annual sales in fiscal 1995. In fiscal year
1995, no domestic distributors were employed.
ACCESS' primary marketing focus is the sale of the
Technical Document Management System products to manufacturers,
information processors, utilities and other users of technical
documentation. Marketing for the Component Service business unit
is provided by ACCESS personnel to sell the Company's services.
No single customer accounts for a significant
percentage of the Company's revenues on a continuing basis. Net
sales to the aerospace industry were 18.8% of fiscal 1995
revenues and 5.4% of fiscal 1994 revenues; net sales to the
various agencies of the federal government represented 18.4% of
fiscal 1995 revenues and 17% of fiscal 1994 revenues, (these
contracts could have been canceled at the election of the
government); net sales to the computer industry were 10.5% of
fiscal 1995 revenues and 2.1% of fiscal 1994 revenues; and net
sales to the medical industry were 7.2% of fiscal 1995 revenues
and 20.6% of fiscal 1994 revenues. See Note 7 of Notes to
Financial Statements included on page 18 of the 1995 Annual
Report to Shareholders of the Company, which information on such
page is filed as part of this Annual Report on Form 10-K and
incorporated by reference herein.
COMPETITION
- -----------
Increases in Technical Document Management Systems
(TDMS) competition continue to push system prices down to
historically unprecedented low levels. The highly published
changes within IBM have inhibited the growth of the Company's
relationship with that organization. Amidst all this, the
Company has significantly reduced fixed costs and increased
productivity in anticipation of a TDMS market characterized by
low cost, high volume, shrink-wrapped software.
PURCHASING AND PRODUCTION
- -------------------------
The majority of the TDMS software is developed by the
Company. The TDMS hardware and some miscellaneous software and
supplies are purchased by the Company from a number of
suppliers. In the case of certain materials, the Company employs
a single source of supply, although alternative sources are
available. The Company integrates and installs the TDMS hardware and software.
PATENTS
- --------
At the current time, technology utilized in the
Company's micrographic storage and retrieval unit and related
products are protected by three unexpired United States patents
owned by the Company.
The Company's issued patents cover most of the major
components and supplies utilized in the Company's micrographic
storage and retrieval system.
PRODUCT DEVELOPMENT
- --------------------
Development to enhance the current technical document
management and distributions systems is in process. In its
development operations, the Company currently employs
approximately eight persons with degrees in engineering and
related fields. Some of these individuals are involved in the
delivery and maintenance of systems or engaged in consulting
with respect to these systems. In addition, the Company from
time to time engages the services of independent research firms
and contractors to assist in development projects. During
fiscal year 1995 and fiscal year 1994, the Company spent
$1,018,486 and $1,945,403, respectively, on these activities.
See Note 5 of Notes to Financial Statements included on page 17
of the 1995 Annual Report to shareholders of the Company, which
information on such page is filed as part of this Annual Report
on Form 10-K and incorporated by reference herein.
EMPLOYEE RELATIONS
- ------------------
The Company employs approximately 47 persons, all on a
full-time basis and all of whom are non-union. Approximately
four employees are connected with marketing activities, while
the others are involved in production, installation, service,
product development, and financial or administrative
operations.
Standard hospitalization, prescription drug, dental,
life insurance, and disability protection are provided for all
full-time employees. The Company has a 401(k) Plan and a
Section 125 Plan. The Company considers its employee relations
to be good.
ITEM 2. PROPERTIES
The principal operations of the Company are conducted
in approximately 19,678 square feet of leased plant and office
space in Cincinnati, Ohio. The Cincinnati property is occupied
under a lease which extends through May 1, 2000. The annual
rental under this lease is $166,000.
The Company owns automatic, custom-made machines used
in the production of its proprietary media and owns various
standard tools and equipment used in the production of ACCESS
products.
The capacity of the Company's TDMS facilities and
equipment exceeds the current requirements of the Company's
operations.
The Company owns computer hardware and software used
for development, support, and installation for its TDMS product
The Cincinnati building occupied by the Company and
the fixtures and equipment therein are modern, well maintained,
in satisfactory operating condition and adequately insured.
The building is air-conditioned.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending
legal proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR THE REGISTRANTS' COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Information with respect to the market for the
Company's Shares of Common Stock and related security holder
matters is set forth on page 12 of the 1995 Annual Report to
the shareholders of the Company, which information on such page
is filed as part of this Annual Report on Form 10-K and
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to selected financial data of
the Company is set forth on page 6 of the 1995 Annual Report
to the shareholders of the Company, which information on such
page is filed as part of this Annual Report on Form 10-K and
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" is set forth on pages 7
through 9 of the 1995 Annual Report to the shareholders of the
Company, which pages are filed as part of this Annual Report on
Form 10-K and incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is set forth on
pages 11 through 18 of the 1995 Annual Report to the
shareholders of the Company, which information on such pages is
filed as part of this Annual Report on Form 10-K and
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Directors. Set forth below is certain information
regarding the directors of the Company, which information has
been obtained in part from the records of the Company and in
part from the directors. All directors have been elected by
the holders of the Company's Common Stock. All directors are
elected annually.
NEWTON D. BAKER, age 61. Mr. Baker has been the
Executive Vice President of the Company since October 1986. He
has been the Treasurer of the Company since July 1970 and
Assistant Secretary since June 1974. He has been a director of
the Company since 1988.
KENT P. FRIEL, age 59. Mr. Friel has been Chairman of
the Board of the Company since April 1986. Since June 1989 Mr.
Friel has been President of Schonberg Associates, Inc., which
performs outplacement services for organizations which may
include the Company. He was President and Chief Executive
Officer of the Company from February 1986 through May 1989. He
has been a director of the Company since 1983.
ROBERT J. KALTHOFF, age 69. Dr. Kalthoff has been
Chairman and Treasurer of The Kalthoff Group, Inc. since March
1990, and was President from March 1990 to December 1994. The
Kalthoff Group, Inc. is an information service and consulting
firm for users and vendors in electronic image information
management industries. He has been a director of the Company
since 1963.
DENNIS J. SULLIVAN, JR., age 63. Mr. Sullivan is
currently the Executive Counselor for Dan Pinger Public
Relations, Inc. Mr. Sullivan served as Executive Vice
President and Chief Financial Officer of Cincinnati Bell, Inc.
from 1987 to February 1993. He has been a director of the
Company since 1990.
SCOTT D. WATKINS, age 46. Mr. Watkins has been
President of the Company and Chief Operating Officer since
April 1989, and Chief Executive Officer since May 1989. He has
been a director of the Company since 1989.
JOHN W. WEIL, age 67. Dr. Weil has been President of
Weil Associates, Inc., which provides consulting services to
industrial and non-profit organizations since January 1985. He
is a director of Maxwell Laboratories and Weil Associates, Inc.
He has been a director of the Company since 1985.
Oce, the Company's major holder of Common Stock, has
the right (in accordance with the Voting Trust Agreement - see
"Certain Relationships and Related Transactions") to direct the
Voting Trustees to vote for up to two director nominees
designated by Oce. In exercise of this right, Oce has directed
the Voting Trustees to vote for Mr. Hardie. Oce retains the
right, which it may exercise at any time, to direct the Voting
Trustees to vote for up to one additional director nominee.
The following information relates to Mr. Hardie.
JAMES H. HARDIE, age 65. Mr. Hardie is, and since
1965 has been, a partner in the law firm of Reed Smith Shaw &
McClay, Pittsburgh, Pennsylvania. That firm performs and has
performed certain legal services from time to time for Oce and
certain of its subsidiaries since 1967. Mr. Hardie is also a
director of UST&D, Inc., Kiene Diesel Accessories, Inc. and
Respironics, Inc.. Mr. Hardie has been a director of the
Company since 1987.
(b) Executive Officers. Set forth below is certain
information regarding the executive officers of the Company.
All executive officers are elected annually by the Board of
Directors.
Name Age Position & Business
Experience
Scott D. Watkins 46 President and Chief Operating
Officer since April 1989, and
Chief Executive Officer since
May 1989.
Newton D. Baker 61 Executive Vice President of the
Company since October 1986;
Treasurer and Assistant Secretary
of the Company since
prior to 1982.
Kim Bollinger 37 Vice President of Customer Ser-
vices for the Company since
May 1993; Director of Systems
Man agement from June 1992 to
May 1993, and Manager of
Consulting Services from
January 1990 to June 1992.
ITEM 11. EXECUTIVE COMPENSATION
(a) Cash Compensation of Executive Officers. The
Board has established an Executive Compensation Committee which
considers and makes recommendations to the Board of Directors
concerning the compensation of the executives of the Company.
During the fiscal year ended April 30, 1995, this committee met
six times and consisted of Messrs. Friel, Hardie and Sullivan.
Neither Mr. Hardie nor Mr. Sullivan was an officer or
employee of the Company or any of its subsidiaries in fiscal
1995 or any prior year. As noted above, Mr. Friel, who is not
an employee of the Company, has been Chairman of the Board of
the Company since April 1986 and was President and Chief
Executive Officer of the Company from February 1986 through May
1989.
The following table sets forth for the fiscal years
ended April 30, 1993, 1994 and 1995, certain information
regarding cash compensation as well as certain other
compensation paid to or accrued for the services rendered
during such years to each of the Executive Officers of the
Company whose total salary and bonus exceeded $100,000 in all
capacities in which they served.
I. SUMMARY COMPENSATION TABLE
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
-----------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All
Compen- Stock Options/ LTIP Other
Fiscal Salary (1) Bonus(1) sation Award SARS Payouts Compen.
Name and Principal Position Year ($) ($) ($) ($) (#)(3) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------
Scott D. Watkins 1995 155,000.04 32,000.00 - - - - -
President and Chief Executive 1994 153,916.56 - - - 100,000.00 - -
Officer 1993 140,019.22 - - (2) - - - -
Newton D. Baker 1995 115,009.09 18,000.00 - - - - -
Exec. Vice President,Treasurer 1994 118,582.90 - - - 75,000.00 - -
& Asst. Secretary 1993 110,019.22 - - (2) - - - -
<FN>
(1) These include amounts that would have been payable, but were
deferred pursuant to election of an Executive Officer,
such as through the Company's 401(k) Savings Plan.
(2) No perquisites were provided or other personal benefits
paid to a named Executive Officer in fiscal year 1993,
1994 or 1995 which exceeded the lesser of $50,000 or 10%
of the total annual salary and bonus reported for such
named Executive Officer.
(3) These numbers represent options for shares of Common Stock
awarded pursuant to the Company's stock option plans. See
the next table titled, "Option/SAR Exercises and Year-End
Value Table" for more detailed information on such
options.
II. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information with respect to the
named executive officers
concerning the exercise of options and/or SAR's during fiscal
year 1995 and unexercised
options and SAR's held at April 30, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY
END OPTION/SAR VALUE
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares Value at FY-End (#) at FY-End ($)
Acquired on Realize Exercisable/ Exercisable/
Name Exercise (#) ($) 1/ Unexercisable Unexercisable 1/
- ---------------------------------------------------------------------------
Scott D. Watkins 0 0 110,000/70,000 0
Newton D. Baker 0 0 77,500/52,500 0
<FN>
1/ ACCESS Common Stock is not traded actively; therefore, there
is no established market value
No stock options or SAR's were granted to either of the named
persons in fiscal 1995.
(b) Compensation of Directors. Each non-employee
director receives an annual fee of $5,000. Any such person who
is the Chairman, any member of the Audit Committee, or a
director who resides outside the metropolitan Cincinnati area
receives an additional $2,000 annually for each position held.
In addition, each such director is reimbursed for expenses
incurred in connection with his attendance any Board or
Committee meeting. Mr. Hardie is to be compensated on the same
basis as the other non-employee directors until the meeting.
(c) Existing Stock Option Plans. The Company
currently has five Stock Option Plans: The 1979 Stock Option
Plan (the "1979 Plan"), the 1983 Stock Option Plan (the "1983
Plan"), the 1985 Incentive Stock Option Plan (the "1985 Plan"),
the 1991 Stock Option Plan (the "1991 Plan"), and the 1993
Stock Incentive Plan (the "1993 Plan"). The 1979, 1983, 1991
and 1993 Plans provide for the grant of both qualified and non-
qualified stock options for shares of the Common Stock of the
Company; the 1985 Plan permits the grant of incentive stock
options only. Options under all of the Plans may be granted to
officers and other key employees of the Company. The 1979,
1991 and 1993 Plans also permit the grant of non-qualified
options to directors of the Company and, in appropriate cases
authorized by the Board of Directors, to other persons in
business relationships with the Company. Optionees are selected
by the Board of Directors; criteria considered in such
selection include the potential optionee's position with or
services to the Company, his or her tenure in that position,
and his or her performance while holding the position or
providing those services. The 1979 Plan was terminated in 1991
except for outstanding options, and no further options may be
granted under that Plan or the 1983 and 1985 Plans. The 1993
Plan also permits the grant of restricted shares.
The option price under the Plans may not be less than
the fair market value of the Common Stock at the date of the
grant, as determined by the Board of Directors. Other terms
and conditions of options granted under the Plans are
established by the Board of Directors, which administers the
Plans, directly or through the Management Compensation
Committee, except that incentive stock options granted under
the Plans may not be exercised prior to one year from date of
grant and expire ten years from date of grant.
All of the plans (except for the 1979 Plan) provide
for the acceleration of the exercise date of stock options in
certain events relating to a change of control of the Company
and for the extension of the period during which stock options
may be exercised upon termination of employment following such an
event. Such provisions may be considered as having an anti-
takeover effect.
The 1979 Plan was amended and restated by the Board of
Directors on June 24, 1988, effective May l, 1988. All of the
existing Plans were also amended at that time to make certain
changes relating to incentive stock options necessitated by the
provisions of the Tax Reform Act of 1986.
No options were granted or exercised in the last fiscal year.
Retention Agreements:
- ----------------------
On August 24, 1994, the Company entered into Executive
Retention Agreements with each of Mr. Watkins and Mr. Baker.
These Agreements provide if during the six months preceding or
the 24 months following a Change in Control (as defined
therein), Mr. Watkins' or Mr. Baker's employment is terminated
by the Company (other than for Cause of Disability) or by such
executive officer for Good Reason, such executive officer shall
be entitled to a severence payment equal to twice his highest
annual salary in the last five years, continued insurance
coverage and up to $25,000 for outplacement services. Change
of Control is defined to include a merger or other business
combination after which the existing shareholders of the
Company have less than 50% of the voting power, the sale of all
or substantially all of the assets of the Company, the
acquisition by, or commencement of a tender offer by any person
other than Oce or Prudential, of or for 20% of the Company's
voting power, or a change in the majority of the Board of
Directors without approval of the existing directors. Good
Reason includes an adverse change in salary, authority or
benefits.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of July 17, 1995,
the beneficial ownership of the Company's Common Stock by (l)
each person known to the Company to own more than 5% of the
outstanding shares of Common Stock, (2) each director
individually and (3) all directors and officers as a group.
The information in the table has been in part received from the
persons listed and in part taken from the records of the
Company.
Beneficial ownership of Common Stock of the Company has
been determined for this purpose in accordance with Rule 13d-3
of the Securities and Exchange Commission ("SEC"), under which
a person is deemed to be the beneficial owner of Common Stock
if he has or shares voting power or investment power in respect
of such Common Stock or has the right to acquire such ownership
within 60 days. Accordingly, the amounts shown on the table
represent beneficial ownership for the purposes of compliance
with SEC reporting requirements, and do not necessarily bear on
the economic incidents of ownership of Common Stock.
Amount & Nature
Name and, With of Beneficial
Respect to 5% Ownership
Ownership, ----------- Percent of
Address Direct Indirect Common Stock
- ----------------- -------- --------- -------------
Oce-van der Grinten
N.V. (1) 100 2,180,854 63.46%
St. Urbanusweg 43
5900 MA Venlo
The Netherlands
2,180,854 -- 63.45%
Kent P. Friel,
Dennis J. Sullivan, Jr.,
John W. Weil, and
Scott D. Watkins as
Voting Trustees (1)
4350 Glendale-Milford Rd.
Suite 250
Cincinnati, OH 45242-3700
Newton D. Baker* (2) 148,984 -- 4.33%
Kent P. Friel* (4) 10,742 -- .31%
James H. Hardie* (3) -- -- --
Robert J. Kalthoff* 112,588 74,180.5 5.43%
ACCESS Corporation
4350 Glendale-Milford Rd.
Suite 250
Cincinnati, OH 45242-3700
Dennis J.Sullivan,Jr.*(4) 100 -- .003%
Scott D. Watkins* (2)(4) 203,924 -- 4.95%
John W. Weil* 15,000 -- .44%
All directors and 530,838 74,180.5 17.60%
officers as a group
(10 persons)(2)(4)
_________________
*Director
(1) On April 27, 1992, pursuant to the Note Purchase
Agreement described above, Oce entered into the Voting Trust
Agreement appointing Kent P. Friel, Dennis J. Sullivan, Jr.,
John W. Weil, and Scott D. Watkins ("the Voting Trustees") as
voting trustees for 2,180,854 shares. The Voting Trustees vote
on matters relating to the election of directors, including
setting the number of directors, in their discretion, except
that the Voting Trustees must vote for up to two nominees for
director designated by Oce in its discretion. Oce retains the
right to obtain the Voting Trustees' proxy as to the voting of
such shares with respect to all issues not related to the
election of directors. (See "Certain Transactions-Agreements
with Oce".) Oce retains the right to dispose of such shares,
subject to certain restrictions in the Note Purchase Agreement.
As a result of these arrangements, Oce and the Voting Trustees
share beneficial ownership of such shares.
The Voting Trust created under the Voting Trust
Agreement has a term of 10 years, and Oce has agreed to renew
it for an additional term of 10 years. The Voting Trust will
terminate upon the sale of the shares of Common Stock subject
thereto, but only with respect to those so sold and subject to
the proviso that Oce may not sell more than 50% of its shares
without consent of the Company, the closing of any underwritten
public offering of Common Stock as a result of which not less
than $10 million in aggregate sales price to the public of
Common Stock shall have been sold in such offering plus any
previously underwritten public offering or the acquisition by
any person of more shares of Common Stock than are held by Oce.
Oce can also terminate the Voting Trust by notice given at any
time after October 3, 1995, but if Oce does so, it may be
required to make a tender offer on terms specified in the note
Purchase Agreement for all shares of Common Stock following the
fiscal year in which the anniversary of the giving of notice
occurs.
Mr. Watkins is President and Chief Executive Officer
of the Company. Mr. Friel is Chairman of the Board of
Directors of the Company but is not an employee of the Company.
Messrs. Sullivan and Weil are also non-employee directors of
the Company. The Voting Trustees have no current intention to
change the composition of the Board of Directors of the
Company.
Except as set forth above, there are no arrangements
or understandings among Oce and the Voting Trustees with
respect to the election of directors or other matters.
(2) Includes 203,300 shares which officers as a group have
the right to acquire upon the exercise of immediately
exercisable stock options, including 110,000 exercisable by Mr.
Watkins and 77,500 exercisable by Mr. Baker.
(3) Does not include shares held by Oce.
(4) Does not include shares held by the Voting Trustees
in their capacity as such.
The Prudential Insurance Company of America
("Prudential"), Three Gateway Center, 100 Mulberry Street,
Newark, New Jersey 07102, owns all 1,428,572 outstanding shares
of the Company's Class A Common Stock, no par value ("Class A
Stock"). The Class A Stock, is convertible share-for-share at
any time into shares of the Company's Common Stock and
thereafter would constitute 30% of the outstanding Common
Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Agreement with Majority Shareholder. On October
------------------------------------
28, 1991, the Company and Oce entered into a Note Purchase
Agreement which provided up to $1,500,000 of financing to the
Company for the purpose of paying for expenditures or
reimbursing the Company for expenditures incurred by the
Company to offer its Engineering Change Control and imaging
products on the IBM AS/400 Series, or other IBM computer
platform, installing, debugging and supporting initial
installations and expenses incurred in marketing and selling
the resulting IBM-based products. The IBM project was
completed and sales of products began in fiscal 1993. Under the
Agreement, the first $1 million of notes purchased by Oce bore
interest at 7% per annum, the next $250,000 at 9% per annum,
and the remaining $250,000 at a variable rate established at
9%.
Under certain circumstances, the Company was entitled
to redeem the notes in exchange for shares of mandatorily
redeemable preferred stock.
On August 26, 1992, the Company exercised its option
and issued 10,000 shares of 7% Class One Preferred Stock to Oce
in redemption of the $1,000,000 principal amount of notes then
outstanding.
On April 30, 1993, the Company issued an additional
5,000 shares of Class One Preferred Stock to Oce for $500,000;
all such shares carry a 9% dividend.
Annual dividends on the Preferred Stock for any fiscal
year are cumulative to the extent of 50% of the Company's net
after-tax earnings, as defined, for such year. At April 30,
1995, $64,685 Preferred Stock dividends were accrued.
Annually, beginning in 1995, the Company is required to redeem
the Preferred Stock at a price of $100 per share plus
accumulated dividends in an amount equal to a specified portion
of after-tax earnings, as defined. Unless dividends on the
Preferred Stock are current, the Company may not declare a
dividend on, or repurchase any of, the Common Stock.
Pursuant to the Note Purchase Agreement, upon the
conversion of the Class B Stock into Common Stock on April 27,
1992, Oce, the Company and four directors elected by the holders
of Common Stock, entered into the Voting Trust Agreement.
2,180,854 shares of Common Stock held by Oce were transferred to
Kent P. Friel, Scott D. Watkins, John W. Weil, and Dennis J.
Sullivan, Jr. by Oce-van der Grinten, N.V. as Voting Trustees.
This Agreement is irrevocable for a period of ten years, except
for certain circumstances. (See Item 12.)
(b) Legal Services. James M. Anderson, Secretary of
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the Company, is a partner in the law firm of Taft, Stettinius &
Hollister, which firm acts as General Counsel to the Company.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
(a) (1) The following financial statements for ACCESS
Corporation, included on pages 10 through 18 of the
1995 Annual Report to the Shareholders of the Company,
which pages are filed as part of this Annual Report on
Form 10K and incorporated herein by reference:
(i) Independent Auditors' Report;
(ii) Balance sheets as of April 30, 1995 and
April 30, 1994;
(iii) Statements of Operations for the
years ended April 30, 1995, April 30, 1994
and April 30, 1993;
(iv) Statements of Capital Stock and Other
Stock-holders' Equity for the years ended
April 30, 1995, April 30, 1994 and April 30,
1993;
(v) Statements of Cash Flows for the years
ended April 30, 1995, April 30, 1994 and
April 30, 1993; and
(vi) Notes to Financial Statements.
(2) Exhibits: Refer to EXHIBIT INDEX on page X-l of
this Annual Report on Form 10-K.
(b) Reports on Form 8-K: None.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS
FILED PURSUANT TO SECTION 15(D)
For the information of the Commission, furnished with this
Annual Report on Form 10-K are four copies of the Company's 1995
Proxy Statement and form of proxy relating to its Annual Meeting
of Shareholders to be held August 21, 1995.
SIGNATURES
Pursuant to the requirements of the Section 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, there unto duly authorized, as of the 24th day of
July, 1995.
ACCESS CORPORATION
By SCOTT D. WATKINS
_________________________________
Scott D. Watkins
President, Chief Executive Officer,
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities indicated as of the 24th day of July,1995.
SCOTT D. WATKINS
____________________________ President, Chief Executive
Scott D. Watkins Officer
NEWTON D. BAKER
_____________________________Executive Vice President
Newton D. Baker and Treasurer (Principal
Financial and Accounting
Officer), Director
/s/ KENT P. FRIEL* Chairman of the Board
____________________
Kent P. Friel
/s/ JAMES H. HARDIE* Director
____________________
James H. Hardie
/s/ ROBERT J. KALTHOFF* Director
____________________
Robert J. Kalthoff
/s/ JOHN W. WEIL* Director
____________________
John W. Weil
/s/ DENNIS J. SULLIVAN, JR.* Director
____________________
Dennis J. Sullivan, Jr.
* Pursuant to Power of Attorney
By NEWTON D. BAKER
_____________________
Newton D. Baker
Attorney-In-Fact