SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
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FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 1996
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 0-10665
SofTech, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts #04-2453033
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification Number)
3260 Eagle Park Drive, N.E., Grand Rapids, MI 49505
(Address of principal executive offices) (Zip Code)
(616) 957-2330
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
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(Title of Class)
Indicate by check mark whether the registrant: (1) 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
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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 II of this Form 10-K or any
amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: $ 11,352,823 as of August 16, 1996. On August 16, 1996,
the registrant had outstanding 4,094,776 shares of common stock of $.10 par
value, which is the registrant's only class of common stock.
Part III, Items 10, 11, 12, and 13 of this report on Form 10-K are hereby
amended and restated in full by adding those items as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Set forth below is certain information regarding the Directors and
executive officers of SofTech, Inc. (the "Company") as of August 31, 1996,
based on information furnished by them to the Company.
Directors
Glenn P. Strehle, 60, term expires in 1998; Mr. Strehle has been
Vice President of Finance of Massachusetts Institute of Technology, an
educational institution, since June 1, 1994, and was its Vice President and
Treasurer since prior to 1990. Mr. Strehle has been a Director of the
Company since 1969. Mr. Strehle is also a Director of BayBanks, Inc. and
Liberty Mutual Insurance Companies and serves as a Trustee of Property
Capital Trust.
Joseph C. McNay, 62, term expires in 1996; Mr. McNay has been Chairman
of the Board of Essex Investment Management Company, Inc., an investment
advisory firm, since prior to 1990. Mr. McNay has been a Director of the
Company since 1981. Mr. McNay is also a Director of Alpha 1 Biomedicals,
Inc. and MPSI Systems, Inc.
Norman L. Rasmussen, 67, term expires in 1997. Mr. Rasmussen has been
President and Chief Executive Officer of the Company since May 1992 and
served as the Company's acting President and Chief Executive Officer from
August 1991 to April 1992. Mr. Rasmussen has been a Director of the Company
since 1974. From prior to 1990 to May 1992 Mr. Rasmussen was President,
Treasurer and a Director of Teleprocessing, Inc., a computer consulting
firm.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Section 16(a)"), requires the Company's Directors and executive officers,
and persons who own more than ten percent of a registered class of the
Company's equity securities (collectively, "Section 16 reporting persons"),
to file with the Securities and Exchange Commission ("SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Section 16 reporting persons are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and on written representations that no
other reports were required, during the fiscal year ended May 31, 1996, the
Section 16 reporting persons complied with all Section 16(a) filing
requirements applicable to them, except that: (i) Mr. Croteau inadvertently
failed to file a Form 3 with the SEC when he became a reporting person; and
(ii) each of the Section 16 reporting persons failed to file a Form 5 with
the SEC within 45 days of the end of the Company's fiscal year. The exercise
of stock options on one occasion should be reported on the Form 5 for each
of Messers. Rasmussen and Croteau, and the Company is currently attempting
to determine whether a Form 5 is required to be filed by any of the other
Section 16 reporting persons.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Non-Employee Directors
For the 1996 fiscal year, fees were paid to non-employee Directors at
a rate of $3,000 per year plus $2,500 for each Board and committee meeting
attended. Employee Directors are not paid any fees or additional
compensation for service as members of the Board of Directors or any
committee thereof.
Pursuant to the Company's 1994 Stock Option Plan (the "1994 Stock
Option Plan"), non-employee Directors may be granted non-qualified options
to purchase shares of Common Stock of the Company. The Compensation
Committee of the Board of Directors administers the 1994 Stock Option Plan
and determines which Directors will receive stock options, the number of
shares subject to each stock option, the vesting schedule of the options,
and the other terms and provisions of the options granted. Stock options
typically terminate upon a Director leaving his or her position for any
reason other than death or disability. No option may be exercised after the
expiration of ten years from its date of grant. During the fiscal year ended
May 31, 1996, no options were granted to non-employee Directors.
Compensation of Executive Officers
Summary Compensation Table
The following table summarizes the compensation paid to the President
and Chief Executive Officer of the Company and each of the Company's four
other most highly compensated executive officers (the "Named Executives")
during or with respect to the 1994, 1995 and 1996 fiscal years for services
in all capacities to the Company.
Long Term
Annual Compensation Compensation Awards
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All Other
Name and Fiscal Other Annual Options Compensation
Principal Position Year Salary($)(1) Bonus($) Compensation($) (No. of Shares) ($)(2)
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Norman L. Rasmussen 1996 207,800 -- -- -- 230,375(3)
President and Chief 1995 198,282 -- -- -- 229,052(3)
Executive Officer 1994 180,000 290,517 -- 110,000 25,169
Mark R. Sweetland 1996 156,000 -- -- -- 3,120
Vice President 1995 150,000 -- 37,500(4) -- 4,620
1994 110,000 86,874 -- 5,000 14,589
Sean Q. Flynn 1996 160,000 35,219 -- -- 4,710
Vice President 1995 140,416 78,042 -- -- 2,175
1994 N/A
Jean J. Croteau 1996 -- -- 343,665(5) -- 3,383
Vice President - 1995 105,000 -- 87,051(5) -- 2,552
Business Operations 1994 82,150 72,818 -- 25,000 12,130
Joseph P. Mullaney 1996 125,000 -- -- -- 1,667
Vice President and 1995 125,000 -- -- -- 2,290
Chief Financial Officer 1994 85,104 64,573 -- 25,000 11,984
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<F1> Includes amounts deferred by Messrs. Rasmussen, Sweetland, Flynn,
Croteau and Mullaney under the Company's 401(k) plan.
<F2> Amounts listed in this column reflect the Company's contributions to
each of the Named Executive's accounts under the Company's profit
sharing retirement plan.
<F3> Includes $226,215 paid as deferred compensation in accordance with
employment agreement for the purpose of purchasing an annuity contract.
<F4> Amount paid as an advance against salary to be paid in fiscal 1996.
<F5> Represents commission paid based upon collection of receivables
outstanding after the sale of the Company's Government Services
Division.
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Option Grants in Last Fiscal Year
There were no stock options granted during the 1996 fiscal year to any
executive officer or Director of the Company. No stock appreciation rights
("SARs") have been granted.
Aggregate Option Exercises in Last Fiscal Year and Option
Value at May 31, 1996
The following table sets forth the shares acquired and the value
realized upon exercise of stock options during the 1996 fiscal year by the
President and Chief Executive Officer and each Named Executive and certain
information concerning the number and value of unexercised options.
Value of Unexercised
Number of Unexercised In-the-Money Options
Number of Options as at May 31, 1996 at May 31, 1996($)
Shares Acquired Value -------------------------- ----------------------------
Name on Exercise Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(2)
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Norman L. Rasmussen 5,000 $16,250 113,037/62,967 $114,000/--
Mark R. Sweetland -- -- 41,000/2,000 3,000/500
Sean Q. Flynn -- -- 33,334/66,666 --/--
Jean J. Croteau 3,000 4,500 15,000/10,000 --/--
Joseph P. Mullaney -- -- 19,000/11,000 500/125
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<F1> Market value on exercise date less the exercise price.
<F2> Market value of underlying securities at May 31, 1996 based on a per
share value of $3.00 less the aggregate exercise price.
Employment Contracts
As disclosed in the Company's 1994 Proxy Statement, the Company and
Mr. Rasmussen are parties to an Employment Agreement dated as of January 1,
1994 (the "Employment Agreement") which terminates on and provides for the
employment of Mr. Rasmussen by the Company through December 31, 1996,
subject to renewal as provided therein. Pursuant to the Employment
Agreement, Mr. Rasmussen is entitled to (i) a base salary (currently
$200,000) which is subject to increase annually by the Board of Directors,
(ii) an annual bonus as a percentage of his base salary based on his success
and contribution in achieving goals specified by the Board of Directors with
respect to the pre-tax earnings per share of the Company assuming certain
revenue targets have been met or exceeded (the "Executive Incentive Plan"),
(iii) an automobile allowance in the amount of $650 per month, (iv) such
other incentive compensation, employee benefits and perquisites consistent
with the Company's employee benefit plans, policies and arrangements in
effect from time to time, and (v) deferred compensation in the form of
options to purchase 100,000 shares of the Company's Common Stock, subject to
vesting.
If the Company reaches pre-established revenue targets and pre-tax
earnings per share goals, Mr. Rasmussen's annual bonus would be 40% of his
base salary. For each percentage increase in pre-tax earnings per share in
excess of such pre-tax earnings per share goals Mr. Rasmussen receives an
increased bonus based on a pro rata percentage of his base salary. No bonus
is paid if the Company fails to reach either 100% of the pre-established
revenue target or 75% of the pre-tax earnings per share goals.
Pursuant to the terms of the Employment Agreement, the Company has
established a deferred compensation plan for Mr. Rasmussen's retirement. On
December 16, 1994, the Employment Agreement was amended to provide payments
by the Company to Mr. Rasmussen in the amount of $226,215 on each of
December 31, 1994, December 21, 1995 and December 31, 1996. The net
amount of such bonus, after taxes, shall be applied to the purchase of
variable annuity contracts with distributions beginning on or after January
1, 1999.
The Employment Agreement provides that, as long as Mr. Rasmussen is
employed by the Company, he may not, directly or indirectly, engage in any
business (other than Teleprocessing, Inc. and Boston Software Works, Inc.)
the activities or products of which are competitive with those of the
Company. Under the Employment Agreement, Mr. Rasmussen may not, either
during or after his employment with the Company, disclose to any person any
secret or confidential information of the Company.
Compensation Committee Interlocks and Insider Participation
Messrs. Rasmussen and Strehle comprised the Compensation Committee
of the Board of Directors for the fiscal year ending May 31, 1996. Mr.
Rasmussen was also President and CEO of the Company during the fiscal year
ending May 31, 1996. The Compensation Committee recommends salaries and
bonuses for officers and general managers and establishes general policies
and procedures for salaries, performance reviews and bonuses. It also
administers the Company's 1994 Stock Option Plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Beneficial Owners
The following table sets forth as of September 1, 1996 (except as
otherwise indicated) certain information concerning beneficial owners of
five percent or more of the Company's issued and outstanding Common Stock.
Percentage of
Shares of Outstanding
Common Stock Common Stock
Beneficially Beneficially
Name and Address of Owned as of Owned as of
Beneficial Owner September 1, 1996 September 1, 1996(1)
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Bennett, Barry M.; Bennett, 281,497 6.87%
Elizabeth A.
1482 River Road
New Hope, PA 18938
Dimensional Fund Advisors, Inc. 252,500(2) 6.22%(2)
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Kennedy Capital Management, Inc. 212,600(3) 5.2 %(3)
425 N. New Ballas Rd., Suite 181
St. Louis, MO 63141
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<F1> There were 4,094,776 shares of Common Stock outstanding on September 1,
1996.
<F2> Based upon information provided on an amended Schedule 13G by
Dimensional Fund Advisors dated February 7, 1996.
<F3> Based on information provided on a Schedule 13G by Kennedy Capital
Management, Inc. dated February 8, 1996.
Security Ownership of Management
Information concerning beneficial ownership of the Company's Common
Stock as of September 1, 1996 by each Director, executive officer
named in the "Summary Compensation Table" on page 7, and all Directors and
executive officers of the Company as a group is set forth below:
Percentage of
Shares of Outstanding
Common Stock Common Stock
Beneficially Beneficially
Owned as of Owned as of
Name of Beneficial Owner September 1, 1996(1) September 1, 1996(2)
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Norman L. Rasmussen 178,956(3) 4.12%
Mark R. Sweetland 77,368(3) 1.78%
Joseph C. McNay 53,000(3) 1.22%
Glenn P. Strehle 36,000(3) *
Joseph P. Mullaney 23,099(3) *
Sean Q. Flynn 83,334(3) 1.92%
Jean J. Croteau 15,000(3) *
All Directors and executive
officers as a group
(7 persons) 466,757(4) 10.74%
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<F*> Less than one percent (1%).
<F1> Based upon information furnished by the persons listed. Except as
otherwise noted, all persons have sole voting and investment power over
the shares listed. A person is deemed, as of any date, to have
"beneficial ownership" of any security that such person has the right
to acquire within 60 days after such date.
<F2> There were 4,094,776 shares outstanding on September 1, 1996. In
addition, 252,371 shares issuable upon exercise of stock options held
by certain Directors and executive officers of the Company are deemed
to be outstanding as of September 1, 1996 for purposes of certain
calculations in this table. See notes 3 and 4 below.
<F3> Includes shares issuable under stock options as follows: Mr.
Rasmussen--113,037 shares; Mr. Sweetland--42,000 shares; Mr. McNay--
15,000 shares; Mr. Strehle--15,000 shares; Mr. Mullaney--19,000 shares;
Mr. Flynn--33,334 shares; and Mr. Croteau--15,000 shares.
<F4> Includes 252,371 shares issuable upon exercise of stock options held by
all Directors and executive officers as a group.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 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, thereunto duly authorized.
SofTech, Inc.
By /S/ Joseph P. Mullaney
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Joseph P. Mullaney, Vice President
and Chief Financial Officer
Date: September 30, 1996
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