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, 1996.
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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
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(Exact name of registrant as specified in its charter)
Ohio 31-0673364
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State of Incorporation I. R. S.
Employer Identification Number
4350 Glendale-Milford Road, Suite 250, Cincinnati, Ohio 45242-3700
- ------------------------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (513)786-8350
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 not 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-
affiliates.
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:
4,865,559 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The 1996 Annual Report to the shareholders of the Company for the
fiscal year ended April 30, 1996, 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, a Cincinnati-based company has two business
units: Electronic Document Management Systems (EDMS) and
Customer Support (component and systems maintenance).
Founded over thirty years ago, ACCESS has designed
systems for use by organizations throughout the world. Some have
been in continuous use for as long as twenty years.
ACCESS' EDMS business unit provides software and
professional services to assist its customers in the design,
configuration, installation and maintenance of electronic
document systems. The Customer Support business unit is
comprised of hardware and software service which is provided to
the Company's installed base of customers and third-party
maintenance customers. It also provides media and parts on a
worldwide basis to the Company's installed customer base.
EDMS BUSINESS UNIT
- --------------------
ACCESS Corporation is dedicated to enhancing the quality
of its customers' products by providing software and professional
services for their document based processes. ACCESS' early
success in automating the handling of document based information
positioned the Company to take a leadership role in the evolution
of computer technology in the specialized area of imaging,
document and workflow management. ACCESS provides document and
workflow management in three distinct markets: Discrete
Manufacturing, Oil & Gas, and Utilities. ACCESS provides both
software and professional services to configure, install and
maintain electronic document management solutions. ACCESS'
extensive history in sales and service of document based
retrieval technology has allowed the Company to build an
expertise in applying current state of the art technologies to
customers' document management products.
The EDMS Business Unit experienced significant growth in
fiscal 1996, in terms of both revenues and staffing. In the
first quarter of fiscal 1996, ACCESS acquired CimSoft, Inc., a
systems integrator servicing a wide base of EDMS customers within
the United States. At the same time, ACCESS also formalized a
strategic alliance with Cimage Enterprise Systems Ltd., making
ACCESS the exclusive distribution and support provider for Cimage
products within North America. These two business ventures
positioned ACCESS for rapid growth through three changes: an
increased customer base, an additional leading edge software
offering, and additional personnel skilled in the sale and
support of EDMS applications. In addition to this new role as a
software reseller, ACCESS continues to maintain and develop
Document Management Software and still provides the industry's
only large format EDMS available on the IBM AS/400 computer.
Throughout fiscal 1996, ACCESS increased staff within
the EDMS Business Unit to meet the growing demand for software
products and professional support services. Through the
continued recruitment of EDMS experienced personnel, ACCESS was
able to minimize the training time and costs associated with
expanding our EDMS business. As a result of the business
ventures previously mentioned, this business unit enjoyed a 198%
growth in revenues during fiscal 1996, compared with fiscal 1995.
Equally important, ACCESS was able to meet its originally stated
goal of sustaining a consistent increased profit throughout this
growth period.
ACCESS' EDMS software offerings fall into two product
areas: EDICS (Engineering Document Image Control System) and the
Cimage Document Manager System. EDICS is primarily focused at
providing Document Life Cycle Management on the IBM AS/400
platform, while the Cimage Document Management is focused on
Document Distribution applications using UNIX and Microsoft
Windows NT servers.
Both products utilize a powerful database application
for managing documents and related information, including paper-
based documents, A through J-size drawings, Computer Aided Design
(CAD) data, company procedures and office correspondence. These
documents come from multiple sources in multiple formats. The
EDMS applications integrate all of them into a single system
which fully automates the revision and distribution processes,
and also provides flexible tools for viewing, editing, and
printing.
ACCESS also provides high added professional services to
its customers. ACCESS' industry specialization allows it to
apply its document system expertise to its customer business
problem in Document Management Applications. While the various
software modules are the same at each customer, each
implementation is unique through the "tailoring" of the document
organizational structure, document-to-document relationships, and
user interface presentation. Through ACCESS' understanding of
Document Management requirements, customers have been able to
achieve industry compliance with regulatory agencies, become ISO
9000 certified, and achieve system implementations in extremely
short time periods. ACCESS increased fiscal 1996 professional
services revenue by 6% as compared to fiscal 1995. This increase
is primarily due to the delivery of professional services to our
customers utilizing the Cimage product.
CUSTOMER SUPPORT BUSINESS
- -------------------------
ACCESS' Customer Support business unit provides quality
hardware and software service on a nationwide basis to both the
Company's installed base of EDMS customers and third-party
maintenance customers. The Software Support revenue from our
EDMS customers grew by 42% in fiscal 1996 over fiscal 1995. This
growth is attributed to the Company bringing Cimage customers
under maintenance contracts.
Third-party maintenance includes the support of non-
ACCESS electronic and electromechanical equipment such as card
embossers, microfiche duplicators, microfilm scanners, large
drawing format scanners, large format plotters, highly
sophisticated 5-1/4" and 12" laser drives, and optical jukebox
systems. ACCESS has a number of hardware manufacturers and
vendors, Support Partners that recommend ACCESS as their
nationwide service provider. The Company's third-party
maintenance revenue increased by 41% in fiscal 1996 over fiscal
1995.
Growth in third-party maintenance is an ACCESS strategic
objective. ACCESS continues to pursue additional third-party
service opportunities with manufacturers and distributors of
electronic and electromechanical products. ACCESS' key to
success in third-party maintenance is the ability to provide its
Support Partners with all of the benefits of having their own
national service company without having to build and support the
infrastructure of a nationwide service organization. ACCESS
offers its business partners a 24 hour-a-day, toll-free dispatch
center; rapid on-site service response, quality repairs and
preventive maintenance for their customers.
MARKETING
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The Company markets its products for the most part
directly in the United States. Marketing operations are
conducted primarily from the Company's headquarters in
Cincinnati, Ohio. The Company employs ten sales and marketing
personnel.
Electrical Document Management Systems (EDMS), as well
as related computer systems, are produced and configured only in
response to firm orders. At the end of fiscal years 1996 and
1995, EDMS backlog totaled approximately $600,100 and $1,053,900,
respectively. The EDMS backlog at the end of 1996 fiscal year is
expected to be delivered within the 1997 fiscal year.
EDMS systems have been installed in 48 states, Japan,
Europe, Australia, Canada, Mexico, Jamaica, Puerto Rico, the
Middle East, China, and the former Soviet Union. Sales in and
outside the United States are handled predominantly on a direct
basis. There is no recurring geographic market concentration
with respect to the sales of ACCESS systems in the United States.
Aggregate sales to international customers represented 1%
of the Company's annual sales in fiscal 1996. In fiscal year
1996, no domestic distributors were employed.
ACCESS' primary marketing focus is the sale of the
Electronic 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 utilities industry were 33.8% of fiscal 1996 revenues and
4.6% of fiscal 1995 revenues; net sales to the various agencies
of the federal government represented 10.9% of fiscal 1996
revenues and 18% of fiscal 1995 revenues, (these contracts could
have been canceled at the election of the government); net sales
to the manufacturing industry were 1.5% of fiscal 1996 revenues
and 12.4% of fiscal 1995 revenues; and net sales to the aerospace
industry were 14.9% of fiscal 1996 revenues and 18.8% of fiscal
1995 revenues. See Note 7 of Notes to Financial Statements
included on page __ of the 1996 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
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Increases in Electronic Document Management Systems
(EDMS) competition continue to push system prices down to
historically unprecedented low levels. The highly publicized
changes within IBM have inhibited the growth of the Company's
relationship with that organization. IBM discontinued many
partner programs which previously helped in marketing the
Company's product.
PURCHASING AND PRODUCTION
- --------------------------
The majority of the EDMS software is supplied by Cimage.
The EDMS 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 EDMS hardware and software.
PATENTS
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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.
PRODUCT DEVELOPMENT
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Development to enhance the current technical document
management and distributions systems is in process. In its
development operations, the Company currently employs
approximately 11 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 1996 and fiscal year 1995, the Company spent $922,036 and
$1,018,486, respectively, on these activities. See Note 5 of
Notes to Financial Statements included on page 18 of the 1996
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
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The Company employs approximately 54 persons, all on a
full-time basis and all of whom are non-union. Approximately ten
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 also operates a sales office in Irvine,
California. The Irvine property is occupied under a lease which
extends through July 2, 1998. The annual rent under this lease
is $44,956.
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 EDMS 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 EDMS 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 21 of the 1996 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 7 of the 1996 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 8
through 10 of the 1996 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 12 through 15 of the 1996 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 62. 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 60. 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 70. 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 64. 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 47. 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 68. 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.
JAMES H. HARDIE, age 66. 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-van der Grinten,
N.V. and certain of its subsidiaries since 1967. Mr. Hardie is
also a director of Kiene Diesel Accessories, Inc., Respironics,
Inc., and several U.S. subsidiaries of Oce. 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 47 President and Chief Operating
Officer since April 1989, and
Chief Executive Officer since
May 1989.
Newton D. Baker 62 Executive Vice President of the
Company since October 1986;
Treasurer and Assistant Secre
tary of the Company since prior
to 1982.
Kim Bollinger 38 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.
Marc D. Baines 36 Vice President of Sales for the Company
since August 1995; Vice President,
CimSoft Inc. June 1995 to August 1995;
Sales Director, Cimage Corporation
March 1990 to May 1995.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years
ended April 30, 1996, 1995 and 1994, 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 $100,000 in all capacities in which they served.
I. SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All
Compen- Stock Options/ LTIP Other
Fiscal Salary(1) Bonus(1) sation Award SARS Payouts Compen.
Name and Principal Year ($) ($) ($) ($) (#)(3) ($) ($)(4)
Position
- -------------------------------------------------------------------------------------------------------------
Scott D. Watkins 1996 155,000.04 50,000.00 - - 200,000.00 - 7,103.88
President and 1995 155,000.04 32,000.00 - - - - 6,717.50
Chief Executive 1994 113,916.56 10,000.00 - - 100,000.00 - 6,901.10
Officer
Newton D. Baker 1996 115,009.09 25,000.00 - - 100,000.00 - 4,965.25
Exec. Vice President 1995 115,009.09 18,000.00 - - - - 4,000.00
Treasurer 1994 115,249.62 3,333.28 - - 75,000.00 - 4,540.00
& Asst. Secretary
Kimberly A. Bollinger 1996 82,500.05 28,000.00 - - - - -
Vice President 1995 77,500.00 12,500.00 - - - - -
Customer Services 1994 73,878.38 3,124.90 - - - - -
Marc D. Baines 1996 68,726.68 - 71,818.07(5) - 50,000.00 - -
Vice President 1995 - - - - - - -
Sales 1994 - - - - - - -
<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 1996, 1995 or
1994 which exceeded the lesser of $50,000 or 10% of the
total annual salary and bonus reported for such named
Executive Officer.
(3) These numbers represent options for shares of Common Stock
awarded pursuant to the Company's stock option plans. See the
next table titled, "Option/SAR Exercises and Year-End Value
Table" for more detailed information on such options.
(4) Represents life insurance compensation.
(5) Represents commissions.
(a) Cash Compensation of Executive Officers
----------------------------------------
Compensation Committee Interlocks and Insider Participation.
------------------------------------------------------------
The Board has established an Executive Compensation Committee which
considers and makes recommendations to the Board of Directors concerning
the compensation of the executives of the Company. During the fiscal year
ended April 30, 1996, this committee met six times and consisted of
Messrs. Friel, Hardie and Sullivan.
Neither Mr. Hardie nor Mr. Sullivan was an officer or employee
of the Company or any of its subsidiaries in fiscal 1996 or any prior year.
As noted above, Mr. Friel, who is not an employee of the Company, has been
Chairman of the Board of the Company since April 1986 and was President and
Chief Executive Officer of the Company from February 1986 through May 1989.
II. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information with respect to the
named Executive Officers concerning the exercise of options and/or
SAR's during fiscal year 1996 and unexercised options and SAR's held
at April 30, 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY- END
OPTION/SAR VALUE
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares Value at FY-End (#) at FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------
Scott D. Watkins 0 0 145,000/235,000 *
Newton D. Baker 0 0 103,750/126,250 *
Kimberly A. Bollinger 0 0 32,500/17,500 *
Marc D. Baines 0 0 0/50,000 *
* ACCESS Common Stock is not traded actively; therefore, there
is no established market value and the value of the Options/SARs
is not quantifiable.
(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 $2,000 annually for each position held. In addition,
each such director is reimbursed for expenses incurred in
connection with his attendance at any Board or Committee meeting.
(Mr. Hardie is to be compensated on the same basis as the other
non-employee directors until the meeting.) Directors may be
granted options under one of the Company's Stock Option plans;
however, no options were granted in fiscal 1996 to non-employee
directors.
In fiscal 1996, Stock Options, with respect to 350,000
shares of Common Stock were granted 255,100 under the 1993 Plan,
72,400 under the 1991 Plan, and 22,500 under the 1985 Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
(a) (b) (c) (d) (e)
% of Total
Number of Options/
Securities SARs
Underlying Granted to
Options/SARs Employees Exercise or Base
Name Granted(#) in Fiscal Year Price($/Sh) Exp. Date
- -----------------------------------------------------------------------------
Scott D. Watkins 200,000 57% 0.15 2005
Newton D. Baker 100,000 29% 0.15 2005
Marc D. Baines 50,000 14% 0.15 2005
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 12, 1996, 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 and named
Executive Officer 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 44.67%
St. Urbanusweg 43
5900 MA Venlo
The Netherlands
Kent P. Friel, 2,180,854 -- 44.67%
Dennis J. Sullivan, Jr.,
John W. Weil, and
Scott D. Watkins as
Voting Trustees (1)(2)
Newton D. Baker (2)(3) 894,520 -- 17.94%
Kimberly A. Bollinger 34,500 -- .70%
Marc D. Baines -- -- --
Kent P. Friel (4) 10,742 -- .22%
James H. Hardie (5) -- -- --
Robert J. Kalthoff 133,564 58,181 3.93%
Dennis J.Sullivan,Jr.(4) 20,100 -- .41%
Scott D. Watkins(2)(3)(4) 953,210 -- 18.96%
John W. Weil (4) 15,000 -- .31%
All directors and 2,085,336 58,181 41.5%
officers as a group
(11 persons)(2)(3)(4)
(1) On April 27, 1992, 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 specified terms 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) The address of the Voting Trustees, Mr. Baker and Mr.
Watkins is: ACCESS Corporation, 4350 Glendale-Milford Road,
Suite 250, Cincinnati, Ohio 45242.
(3) Includes 281,250 shares which all directors and officers
as a group have the right to acquire upon the exercise of
immediately exercisable stock options, including 145,000
exercisable by Mr. Watkins, 103,750 exercisable by Mr. Baker, and
32,500 exercisable by Ms. Bollinger.
(4) Does not include shares held by the Voting
Trustees in their capacity as such.
(5) Does not include shares held by Oce.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A) Oce holds 10,000 shares of 7% Class One Preferred Stock and
5,000 shares of 9% Class One Preferred Stock.
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, 1996,
$102,511 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. Under the Note Purchase Agreement, Oce
agreed to limitations on the voting and transfer of its stock
(including the transfer of such stock to a voting trust, the
trustees of which are four of the Company's directors) and Oce
was released from its obligation under certain circumstances to
make a tender offer for the Company's common stock. As of
April 30, 1996, the Company had authorized and issued a total of 15,000
shares of Class One Preferred Stock. The Company was not
required to and has not redeemed any Class One Preferred Stock in
fiscal 1996.
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.)
In November 1995, each of Messrs. Watkins and Baker
acquired 714,286 shares of Class A Common Stock from The
Prudential Insurance Company of America at a price of $.20 per
share and converted such shares into Common Stock. Messrs.
Watkins and Baker offered the opportunity to purchase such shares
to the Company but the Board determined that such purchase would
not be a prudent investment of its limited working capital.
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 11 through 19 of the 1996
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:
(i) Independent Auditors' Report;
(ii) Balance sheets as of April 30, 1996 and
April 30, 1995;
(iii) Statements of Operations for the years ended
April 30, 1996, April 30, 1995 and April 30, 1994;
(iv) Statements of Capital Stock and Other
Stockholders' Equity for the
years ended April 30, 1996, April 30, 1995
and April 30, 1994;
(v) Statements of Cash Flows for the years
ended April 30, 1996, April 30, 1995 and
April 30, 1994; 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 1996
Proxy Statement and form of proxy relating to its Annual Meeting
of Shareholders to be held August 22, 1996.
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 26th day of July, 1996.
ACCESS CORPORATION
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 26th day of July, 1996.
SCOTT D. WATKINS
- ---------------------------- President & Chief Executive Officer
Scott D. Watkins
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
NEWTON D. BAKER
- ---------------------
Newton D. Baker
Attorney-In-Fact