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, 1997.
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
(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 1997 Annual Report to the shareholders of the
Company for the fiscal year ended April 30, 1997, 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: Hardware Service, which maintains and
installs components and systems, and Electronic
Document Management Systems (EDMS).
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.
The Hardware Service business unit provides
hardware maintenance services for components and
systems. The Company is currently striving to grow its
third-party equipment and prepress maintenance
business. The Company is working with manufacturers
and distributors of high-value integrated equipment to
provide maintenance services for equipment manufactured
or sold by them. Access' EDMS business unit provides
software and professional services to assist its
customers in the design, configuration, installation
and maintenance of electronic document systems.
HARDWARE SERVICE BUSINESS
Access Hardware Service business unit
provides quality hardware service on a nationwide basis
to the prepress industry, owners of equipment
manufactured and sold by third parties, and the
Company"s installed base of EDMS customers. The
hardware service revenue from services for equipment
manufactured and sold by third parties grew by 12% in
fiscal 1997 over fiscal 1996. In April 1997, Access
acquired the assets of a company which provided
hardware services for the prepress industry within the
United States. At this time, the Company is
formalizing relationships with two major manufacturers
of prepress equipment to provide services for equipment
manufactured by them.
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, optical jukebox systems,
and prepress equipment. Access has a number of
hardware manufacturers and vendors and Support Partners
that recommend Access as their nationwide service
provider.
Growth in maintenance of third-party
manufactured equipment is an Access strategic
objective. Access continues to pursue additional
third-party service opportunities with manufacturers
and distributors of other electronic and
electromechanical products. Access's key to success in
third-party maintenance is the ability to provide its
Support Partners with the benefits of having their own
national service company without having to build and
support the infrastructure of a nationwide service
organization. Access offers a 24 hour-a-day, toll-free
dispatch center; rapid on-site service response,
quality repairs and preventive maintenance for their
customers.
Access is qualified to meet the demands of
today's electronic prepress multi-vendor environment.
Access engineers are trained and cross-trained on a
wide range of imagesetters, scanners, networks/servers,
and software applications ensuring the resolution of a
service problem.
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. (Cimage),
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
Document Management Software and still provides the
industry's only large format EDMS available on the IBM
AS/400 computer.
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 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.
MARKETING
The Company generally markets its own services
and products in the United States. Marketing of
hardware maintenance services for third-party and
prepress equipment is conducted from Cincinnati, Ohio
by two senior sales managers, both of whom have run
service operations and worked with the Company's
Support Partners, manufacturers, and distributors to
grow Access' base of end-user customers.
The EDMS Marketing operations are conducted
from the Company's headquarters in Cincinnati, Ohio and
its branch office in Irvine, California. The Company
employs nine sales and marketing personnel in this
business unit.
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 1997 and 1996, EDMS backlog totaled
approximately $511,000 and $600,000, respectively. The
EDMS backlog at the end of fiscal 1997 is expected to
be delivered within fiscal 1998.
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
1997. In fiscal year 1997, no domestic distributors
were employed.
EDMS' primary marketing focus is the sale of
the Electronic Document Management System products to
manufacturers, information processors, utilities and
other users of technical documentation.
No single customer accounts for a significant
percentage of the Company's revenues on a continuing
basis. Net sales to the utilities industry were 12.4%
of fiscal 1997 revenues and 33.4% of fiscal 1996
revenues; net sales to the various agencies of the
federal government represented 5.7% of fiscal 1997
revenues and 10.9% of fiscal 1996 revenues, (these
contracts could have been canceled at the election of
the government); net sales to the manufacturing
industry were 17.4% of fiscal 1997 revenues and 1.5% of
fiscal 1996 revenues; and net sales to the aerospace
industry were 22% of fiscal 1997 revenues and 14.9% of
fiscal 1996 revenues. See Note 7 of Notes to Financial
Statements included on page 21 of the 1997 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 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.
The Company has experienced competition from
companies such as Altras, Documentum, and Novasoft in
the EDMS market.
There are few companies, like Access, in the
fragmented market of Hardware Service, which are small
and service on a national basis. There are a number of
large companies such as Decision One, IBM, and Tab in
this market.
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
At the current time, technology utilized in
the micrographic storage and retrieval unit and related
products sold by the Company are protected by three
unexpired United States patents owned by the Company.
EDMS 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 10 persons with degrees
in engineering and related fields. Some of these
individuals are also involved in the delivery and
maintenance of systems or engaged in consulting with
respect to these systems. During fiscal 1997 and
fiscal 1996, the Company spent $577,197 and $922,036,
respectively, on these activities. See Note 5 of Notes
to Financial Statements included on page 20 of the 1997
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 67 persons,
all on a full-time basis and all of whom are non-union.
Approximately eleven 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 also operates an approximately
9600 square feet service depot, manufacturing and parts
activity facility in Hebron, Kentucky. This property
is occupied under a lease, effective July 1, 1997,
which extends to June 30, 2004. The annual rent under
this lease is $58,656.
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 Hardware Service
and 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
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 1997
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 1997
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 1997 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 1997 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 63. 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. Mr. Baker was appointed Secretary in November
1996.
KENT P. FRIEL, age 61. 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 71. Dr. Kalthoff has
been Chairman and Chief Executive Officer of Kalthoff
International since January 1996, and was Chairman,
President and Treasurer from March 1990 to January
1995. Kalthoff International 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 65. Mr. Sullivan
is currently an 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. Mr.
Sullivan is a director of Fifth Third Bancorp, Fifth
Third Bank, Associated Insurance, Anthem, Inc., and
Kalthoff International. He has been a Director of the
Company since 1990.
SCOTT D. WATKINS, age 48. Mr. Watkins has
been President of the Company and Chief Operating
Officer since April 1989, and Chief Executive Officer
since May 1989. Mr. Watkins is a Director of
Cincinnati State Community and Technical College. He
has been a Director of the Company since 1989.
JOHN W. WEIL, age 69. 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 Weil Associates, Inc. He has been a Director of
the Company since 1985.
JAMES H. HARDIE, age 67. 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 Kiene Diesel Accessories, Inc., Respironics, Inc.,
and several U.S. subsidiaries of Oce N.V. Mr. Hardie
has been a Director of the Company since 1987.
The following person is being nominated as a
Director:
JAMES M. ANDERSON, age 55. Mr. Anderson has
been the President and Chief Executive Officer of
Children's Hospital, Cincinnati, Ohio, since November
1996. Mr. Anderson was a partner of the law firm of
Taft, Stettinius & Hollister from January 1982 to
October 1996. He is currently a Consultant to the
Access Board of Directors, was the Secretary from 1984
to 1996, and since November 1996, has received
consultation fees equal to the fees paid to Directors
as described below. Taft, Stettinius & Hollister has
served as general counsel for Access for many years.
(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 48 President and Chief Operating
since April 1989, and Chief Executive
Officer since May 1989.
Newton D. Baker 63 Executive Vice Officer
President of the Company since October1986; Treasurer and
Assistant Secretary of the Company since
prior to 1982.
Kim Bollinger 39 Vice President of Customer Ser-
vices for the Company since May 1993;
Director of Systems Management from June
1992 to May 1993, and Manager of
Consulting Services from January 1990 to
June 1992.
Marc D. Baines 37 Vice President of Sales for the Company
since August 1995; Vice President, CimSoft
Inc. June 1995 to August 1995; Sales
Director, Cimage Corporation from March
1990 to May 1995.
Joseph Schneider 53 Vice President of Hardware Service for the
Company since March 1997; Branch
Manager, DecisionOne, April 1994 to March
1997. Vice President and General Manager,
May 1990 to November 1993, for the
Company.
Joseph Musgrave 39 Senior Vice President of Prepress Sales for
the Company since April 1997; President,
Graphic Systems Technology, Inc. ("GST")
from September 1985 to April 1997. GST
filed a voluntary petition for reorganiza-
tion under Article 11 of the Bankruptcy
Code in 1997. The petition was later
withdrawn and substantially all of the
assets of GST were purchased by the
Company from GST's secured creditor. None
of the proceeds of such sale were
received by Mr.Musgrave.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth for the fiscal
years ended April 30, 1997, 1996 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 $100,000 in all capacities in which they served.
I. SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Awards Payouts
Compensation
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All
Compen- Stock Options/ LTIP Other
Fiscal Salary (1) Bonus(1) sation Award SARS Payouts Compen.
Name and Principal Position Year ($) ($) ($) ($) (#)(3) ($) ($)(4)
- -----------------------------------------------------------------------------------------------------------------------
Scott D. Watkins 1997 170,000.00 - - - - - 6,717.50
President and Chief Executive 1996 155,000.04 50,000.00 - - 200,000 - 7,103.88
Officer 1995 155,000.04 32,000.00 - - - - 6,717.50
Newton D. Baker 1997 125,000.00 - - - - - 4,000.00
Exec. Vice President,Treasurer 1996 115,009.09 25,000.00 - - 100,000 - 4,000.00
& Asst. Secretary 1995 115,009.09 18,000.00 - - - - 4,000.00
Kimberly A.Bollinger 1997 83,600.00 - - - - - -
Vice President 1996 82,500.00 28,000.00 - - - - -
Customer Services 1995 77,500.00 12,500.00 - - - - -
Marc D. Baines 1997 84,600.00 5,225.70 54,496.27(5) - - - -
Vice President 1996 68,726.68 - 71,818.07(5) - 50,000 - -
Sales 1995 - - - - - - -
<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 1997, 1996 or 1995 which exceeded the
lesser of $50,000 or 10% of the total annual
salary and bonus reported for such named Executive
Officer.
(3) These numbers represent options for shares of
Common Stock awarded pursuant to the Company's stock
option plans. See the next table titled, "Option/SAR
Exercises and Year-End Value Table" for more detailed
information on such options.
(4) Represents life insurance compensation.
(5) Represents commissions.
</FN>
(a) Cash Compensation of Executive Officers
Compensation Committee Interlocks and Insider
Participation. The Board has established an Executive
Compensation Committee which considers and makes
recommendations to the Board of Directors concerning
the compensation of the executives of the Company.
During the fiscal year ended April 30, 1997, this
committee met one time and consisted of Messrs. Friel,
Hardie and Sullivan.
Neither Mr. Hardie nor Mr.
Sullivan was an officer or employee of the Company or
any of its subsidiaries in fiscal 1997 or any prior
year. As noted above, Mr. Friel, who is not an
employee of the Company, has been Chairman of the Board
of the Company since April 1986 and was President and
Chief Executive Officer of the Company from February
1986 through May 1989.
II. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information with respect
to the named Executive Officers
concerning the exercise of options and/or SAR's during
fiscal year 1997 and unexercised
options and SAR's held at April 30, 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY- END
OPTION/SAR VALUE
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares Value at FY-End (#) at FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------
Scott D. Watkins 0 0 246,667/133,333 *
Newton D. Baker 0 0 163,333/66,667 *
Kimberly A. Bollinger 0 0 32,500/0 *
Marc D. Baines 0 0 16,667/33,333 *
<FN>
* 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 $6,000.
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 1997.
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 or 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,
1997, 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, nominee for Director, and named
Executive Officer individually, and (3) all Directors,
nominees for Director, 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 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)
James M. Anderson 23,700 -- .49%
Newton D. Baker (2)(3) 954,103 -- 18.91%
Kimberly A. Bollinger 32,500 -- .66%
Marc D. Baines 16,667 -- .34%
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) 1,054,877 -- 20.57%
John W. Weil (4) 15,000 -- .31%
All directors and 2,280,753 58,181 43.0%
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 476,667 shares which all Directors
and Officers as a group have the right to acquire upon
the exercise of immediately exercisable stock options,
including 246,667 exercisable by Mr. Watkins, 163,333
exercisable by Mr. Baker, 32,500 exercisable by Ms.
Bollinger, and 16,667 exercisable by Mr. Baines.
(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,
2,500 shares of 9% Class One Preferred Stock, and 2,500 shares of
variable rate 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, 1997, no 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, 1997, 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 1997.
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., as Voting Trustees, by Oce.
This Agreement is irrevocable for a period of ten
years, except for certain circumstances. (See Item
12.)
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 1997 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, 1997
and April 30, 1996;
(iii) Statements of Operations for the
years ended April 30, 1997, April
30,1996 and April 30, 1995;
(iv) Statements of Capital Stock and
Other Stockholders' Equity for the
years ended April 30, 1997, April 30, 1996
and April 30, 1995;
(v) Statements of Cash Flows for
the years ended April 30, 1997,
April 30, 1996 and April 30, 1995;
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)
The Company expects to furnish to its security
holders subsequent to the date of the filing of this
Form 10-K, its Annual Report to Shareholders, and Proxy
Statement and form of Proxy. The Company will furnish
four copies of such material to the Commission for its
information when it is mailed to security holders.
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, 1997.
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, 1997.
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