As filed with the Securities and Exchange Commission on August ___, 1997
Registration No. 33-________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PSC INC.
(Exact name of Registrant as specified in its charter)
New York 16-0969362
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
675 Basket Road
Webster, New York 14580
(716) 265-1600
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive office)
Robert C. Strandberg
President and Chief Executive Officer
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Martin S. Weingarten, Esq.
Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_X_]
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of each class Amount Proposed maximum Proposed Amount of
of securities to be to be Offering price Maximum registration
registered registered per share(1) Aggregate offering fee
Price (1)
Common Shares,
par value 975,000(2) $6.875 $6,703,125 $2031.25
$.01 per share, representing
shares issuable upon exercise of
warrants
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon the
average of the high and low sale prices reported on the Nasdaq National Market
on August 26, 1997.
(2) The number of Common Shares specified above is the number which may be
acquired upon exercise of certain of the Company's warrants described in the
Prospectus forming a part of this Registration Statement (the "Warrants"). This
Registration Statement covers, pursuant to Rule 416, in addition, such
indeterminable number of Common Share as may be issued on exercise of the
Warrants by reason of adjustments in the number of Common Shares issuable
pursuant to antidilution provisions contained in the Warrants. Since such
additional Common Shares will, if issued, be issued for no additional
consideration, no registration fee is required.
-----------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
PSC INC.
975,000 Common Shares
Issuable upon Exercise of Warrants
This Prospectus has been prepared in conjunction with the distribution
of up to 975,000 Common Shares, $.01 par value (the "Shares"), of PSC Inc. (the
"Company" or "PSC") issuable upon the exercise of certain outstanding warrants
of the Company which are proposed to be sold from time to time by certain
selling shareholders (the "Selling Shareholders"). See "Selling Shareholders."
The Company will not receive any of the proceeds from the sale of the Shares by
the Selling Shareholders. The Company will receive the proceeds from the
exercise of the Warrants, if any, and will use such proceeds, if any, for debt
reduction and for working capital. As amended, the Warrants are exercisable at a
price of $8.00 per share and may be exercised between July 12, 1997 and
September 15, 2006. The costs and expenses of registering the Shares covered by
this Prospectus will be paid by the Company.
The Company's Common Shares are quoted on the Nasdaq National Market
under the symbol PSCX. On August 26, 1997 the last reported sale price for the
Common Shares was $6.81 per share.
The Shares offered hereby involve a high degree of risk. See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The distribution of the Shares by the Selling Shareholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market, on the Nasdaq National Market (or
any exchange on which the Common Shares may then be listed), in negotiated
transactions or otherwise. Sales will be effected at such prices and for such
consideration as may be obtainable from time to time. Commission expenses and
brokerage fees, if any, will be paid by the Selling Shareholders. See "Selling
Shareholders" and "Plan of Distribution."
The date of this Prospectus is August 29, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D. C. 20549, and at the Commission's
following Regional Offices: Suite 1400, Northwest Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661; and 13th Floor, Seven World Trade
Center, New York, New York 10048. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants (including the Company) that file
electronically with the Commission. The address of the Commission's Web site is
http://www.sec.gov. In addition, the Company's Common Shares are listed on the
Nasdaq National Market, and the aforementioned materials may also be inspected
at the offices of the Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.
C. 20006.
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the Common Shares offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto For further
information with respect to the Company and such Common Shares offered hereby,
reference is made to the Registration Statement and the exhibits, schedules and
reports filed as part thereof. Statements contained in this Prospectus with
respect to the contents of any contract or other document filed as an exhibit to
the Registration Statement are not necessarily complete, and in each such
instance reference is hereby made to the copy of such contract or document filed
as an exhibit to the Registration Statement. Each such statement is qualified in
all respects by such reference to such exhibit. Copies of all or any part of the
Registration Statement, including the documents incorporated by reference
therein or exhibits thereto, may be obtained upon payment of the prescribed
rates at the offices of the Commission set forth above.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, the Company's Quarterly Reports on Form 10-Q for the quarters
ended April 4, 1997 and July 4, 1997, the Company's Amended Quarterly Report on
Form 10-Q/A for the quarter ended July 4, 1997, the Company's Current Report on
Form 8-K filed on May 7, 1997, the Company's Proxy Statement dated March 31,
1997 and the description of the Company's Common Shares contained in the
Company's Registration Statement on Form 8-A filed by the Company with the
Commission on August 31, 1981 are hereby incorporated by reference in this
Prospectus, except as superseded or modified herein.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Shares offered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in any document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed documents which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been or
may be incorporated by reference herein (other than exhibits to such documents
which are not specifically incorporated by reference into such documents). Such
requests should be directed to Charis W. Copin, Director of Investor Relations,
at the Company's principal executive offices at 675 Basket Road, Webster, NY
14580 (telephone (716) 265-1600).
<PAGE>
THE COMPANY
PSC Inc., together with its subsidiaries (the "Company"), manufactures
a comprehensive line of laser based handheld and fixed position bar code
readers, verifiers and integrated sortation and point-of-sale (POS) scanning
systems for the worldwide Automatic Identification and Data Capture (AIDC)
market. The Company's products serve as the "front end" of terminals or host
computers and are used to identify, capture, process and transmit data. The
Company has developed products for AIDC at every stage of the product supply
chain from raw material, manufacturing and warehousing, to logistics,
transportation, inventory management and POS. The Company's products are used
throughout the world in food and general retail, healthcare, government and
other industries.
The Company has positioned itself within the AIDC industry by selling
both domestically and internationally. International sales accounted for
approximately 38% of the Company's 1996 total sales. The Company has a
diversified customer base composed of original equipment manufacturers (OEMs),
third-party resellers and end users. The Company's distribution relationships
have enabled it to introduce its products (generally under non-PSC labels) to
new vertical markets, and have fostered the development of strategic
relationships with leading AIDC participants and end users. The Company operates
within one industry segment:
automatic identification and data capture.
The Company's corporate headquarters are located in the Rochester, New
York suburb of Webster. The Company designs, manufactures, sells, distributes
and services its products from manufacturing facilities in Webster, New York and
Eugene, Oregon. The Company has sales and service operations in the Americas,
Europe, Asia and Australia.
PSC was incorporated in the State of New York in 1969. The Company's
headquarters are located at 675 Basket Road, Webster, New York, and its
telephone number is (716) 265-1600.
Recent Developments. On July 12, 1996, the Company acquired
Spectra-Physics Scanning Systems, Inc., TxCom S.A. and related businesses
(collectively "Spectra") from Spectra-Physics AB, a multinational corporation
based in Sweden. Spectra, which is headquartered in Eugene, Oregon, is one of
the worlds' leading manufacturers of countertop and in-counter bar code scanners
for retail point-of-sale applications. The purchase price was approximately $140
million and was paid by $125 million in cash, $10 million in PSC Common Shares
and by a $5 million subordinated promissory note. The $125 million cash portion
was funded by a combination of the Company's cash, senior debt ($92.5 million)
and subordinated debt ($30 million). In connection with the subordinated debt,
warrants ("Warrants") evidencing rights to purchase an aggregate of 975,000
Common Shares of the Company were issued and sold to the purchasers of the
subordinated debt. As amended, the Warrants have an exercise price of $8.00 per
share and may be exercised between July 12, 1997 and September 15, 2006. Holders
of the Warrants have certain rights relating to registration and to the
repurchase by the Company of the Warrants and the shares issued upon exercise of
the Warrants (the "Warrant Shares") under certain circumstances.
<PAGE>
On April 30, 1997, L. Michael Hone resigned as Chief Executive Officer,
as Chairman of the Board of Directors, and as a member of the Board of Directors
of the Company. On the same date, Robert S. Ehrlich, formerly the Company's Vice
Chairman, was elected Chairman of the Board and Robert C. Strandberg, formerly
the Company's Executive Vice President, was elected President and Chief
Executive Officer of the Company.
On June 30, 1997, the Company sold all of its shares in Tx Com S.A. to
Tx Com S.A. for approximately $1.0 million.
Legal Proceedings
There is pending in the United States District Court for the Western
District of New York (the "Court") an action (the "Litigation"), commenced in
April 1996, between the Company and Symbol Technologies, Inc. ("Symbol")
relating to issues of patent infringement and validity, antitrust, unfair
competition, and the breach of certain license agreements. See "Risk Factors -
Intellectual Property; Pending Litigation". The Litigation is in the discovery
stage. On October 9, 1996, the Court determined that there would be a non-jury
hearing (the "Markman Hearing") as to all of Symbol's patents in suit which, as
agreed by the parties, are now limited to nine patents. The Markman Hearing will
be solely related to claim construction of the patent claims alleged by Symbol
to be infringed. Subsequent to the Markman Hearing, it is expected there will be
a jury trial on the issues of infringement and validity. All of the other issues
in the litigation have been stayed pending a determination on the nine patents
of Symbol.
When the Company acquired Spectra in July 1996, Spectra was a party to
a 1985 License Agreement, as modified in 1995, with Symbol (the "Symbol-Spectra
License") which provided for arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in Chicago, Illinois
with respect to issues (among others) of which products may be deemed licensed
products.
On March 10, 1997, in accordance with the Symbol-Spectra License, the
Company demanded arbitration (the "Arbitration") to determine whether the
Company is entitled to sell its QS 6000 scan module as a licensed device
pursuant to the Symbol-Spectra License and whether customers who purchase said
module may incorporate it into portable data terminals without fear of suit from
Symbol or need to pay any royalties beyond those paid by the Company on the
module itself.
On May 9, 1997, the Court denied Symbol's motion to enjoin or stay the
Arbitration, and stayed the Markman Hearing pending the outcome of the
Arbitration. The Arbitration was held during the week of July 21, 1997 and no
decision has yet been rendered.
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus or incorporated
by reference herein, the following risk factors should be considered carefully
in evaluating the Company and its business before purchasing the Shares offered
hereby. This Prospectus contains forward-looking statements that involve risks
and uncertainties. The Company's actual results may differ significantly from
the results discussed in the forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed below.
Substantial Leverage. The Company incurred substantial indebtedness
($127.5 million) in connection with the acquisition of the Spectra. See "The
Company - Recent Developments." The degree to which the Company is leveraged
could have important consequences to the holders of the Common Shares offered
hereby, including the following: (i) the Company's ability to obtain additional
financing in the future for working capital, capital expenditures, acquisitions
or general corporate purposes may be impaired; (ii) a substantial portion of the
Company's cash flow from operations must be dedicated to the payment of interest
on the indebtedness, thereby reducing the funds available to the Company for
other purposes; (iii) the agreements governing the Company's long-term
indebtedness contain certain restrictive financial and operating covenants; (iv)
certain indebtedness under the senior debt will be at variable rates of
interest, which would cause the Company to be vulnerable to increases in
interest rates; (v) all of the indebtedness outstanding under the senior debt is
secured by substantially all the assets of the Company; (vi) the Company is
substantially more leveraged than certain of its competitors, which might place
the Company at a competitive disadvantage; (vii) the Company may be hindered in
its ability to adjust rapidly to changing market conditions; and (viii) the
Company's substantial degree of leverage could make it more vulnerable in the
event of a downturn in general economic conditions or its business.
Debt Service. As a result of the indebtedness incurred in connection
with the acquisition of the Spectra, a substantial portion of the Company's cash
flow will be devoted to debt service. The ability of the Company to continue
making payments of principal and interest will be largely dependent upon its
future performance. Many factors, some of which will be beyond the Company's
control, such as prevailing economic conditions, will affect its performance.
There can be no assurance that the Company will be able to generate sufficient
cash flow to cover required interest and principal payments. If the Company is
unable to meet interest and principal payments in the future, it may, depending
upon the circumstances which then exist, seek additional equity or debt
financing, attempt to refinance its existing indebtedness or sell all or part of
its business or assets to raise funds to repay its indebtedness. There can be no
assurance that sufficient equity or debt financing will be available, or, if
available, that it will be on terms acceptable to the Company, that the Company
will be able to refinance its existing indebtedness or that sufficient funds
could be raised through asset sales. In addition, the ability of the Company to
raise funds by selling assets is restricted by the Senior Debt.
<PAGE>
Technological Change. The market for the Company's products is
characterized by rapidly changing technology, evolving industry standards and
changing customer needs. The Company's future success will depend on its ability
to enhance its current products, to develop new products on a timely and
cost-effective basis and to respond to changing customer needs and technological
developments. Certain of the Company's competitors spend larger amounts on
research and development efforts than the Company. Any failure by the Company to
anticipate or respond adequately to changes in technology and customer
preferences, or any significant delay in product development or introduction,
could have a material adverse effect on the Company's financial condition and
results of operations. There can be no assurance that the Company will be
successful in developing new products or enhancing its existing products on a
timely or cost-effective basis, or that such new products or product
enhancements will achieve market acceptance.
Dependence on Sales by Third Parties. The Company's net sales are
dependent upon the ability of its original equipment manufacturer ("OEM"), value
added reseller ("VAR"), distributor and systems integrator customers to develop
and sell products that incorporate the Company's scanning products. Factors,
including economic conditions, patent positions, inventory positions, the
ability to sell the Company's products to end users, regulatory requirements and
other marketing restrictions, that adversely affect the operations of the
Company's OEM, VAR, distributor and systems integrator customers can have a
substantial impact upon the Company's financial results. No assurances can be
given that the Company's OEM, VAR, distributor and systems integrator customers
will not experience financial or other difficulties that could adversely affect
their operations and, in turn, the results of operations of the Company.
Intellectual Property; Pending Litigation. The Company's success is
dependent in part on its ability to obtain patent protection for its products,
maintain trade secret protection and operate without infringing the proprietary
rights of others. The Company currently owns over 100 U.S. patents having
expirations from the year 2001 to the year 2014 and also has certain foreign
patents. The Company has filed, and intends to file, applications for additional
patents covering its products. There can be no assurance that any of these
patent applications will be granted, or that the Company will develop additional
products that are patentable and do not infringe upon the patents of others, or
that the patents issued to or licensed by the Company will provide the Company
with a competitive advantage or adequate protection for its products. In
addition, there can be no assurance that the Company's competitors will not
develop technology or know-how, or obtain patents, that could limit the
Company's ability to compete in the future or that patents issued to or licensed
by the Company will not be challenged, invalidated or circumvented by others.
The AIDC industry is characterized by substantial litigation regarding
patent and other intellectual property rights. The Company aggressively defends
its patents and other proprietary rights. The Company has commenced an action
against Symbol Technologies, Inc. ("Symbol") for violation of the antitrust laws
and unfair trade practices and for declaration of noninfringement and/or
invalidity of certain of Symbol's patents. In that action, Symbol has
counterclaimed alleging patent infringement and alleging breaches of certain
Symbol-PSC License Agreements. PSC has informed Symbol that subsequent to the
Spectra acquisition it has been operating under certain Symbol-Spectra licenses
rather than under the Symbol-PSC licenses. The status of the various licenses is
before the courts. Although the Company maintains that Symbol's patents are
invalid, that the Company has not infringed the patents, or both, and that the
Symbol-Spectra License Agreements rather than the Symbol-PSC License Agreements
are controlling, there can be no assurance that the actions will be decided or
settled in the Company's favor. There can be no assurance that others will not
assert claims against the Company that result in litigation. Any such litigation
could result in significant expense, adversely impact the Company's marketing,
give rise to certain indemnity rights on the part of customers, and divert the
Company's attention from other matters. If any of the Company's products were
found to infringe a third-party patent, the third party could be entitled to
injunctive relief, which would prevent the Company from selling any such
infringing products. In addition, the Company could be required to pay monetary
damages. Although the Company could seek a license to sell products determined
to infringe a third-party patent, there can be no assurance that a license would
be available on terms acceptable to the Company. The Company could also attempt
to redesign any infringing products so as to avoid infringement, although any
effort to do so could be expensive and time-consuming, and there can be no
assurance the effect would be successful.
Competition. The AIDC industry is highly competitive with rapid
technological change, product improvements, new product introduction and
intellectual property developments representing key competitive factors. The
Company also competes on the basis of innovative design, high qualify
manufacturing, technical expertise in scanning, level of sales and support
services, price and overall product functionality and fitness for use. Failure
to keep pace with product and technological advances could negatively affect the
Company's competitive position and prospects for growth. Several of the
Company's competitors have substantially greater financial and other resources
than the Company. In addition, other larger corporations could enter the AIDC
industry. No assurance can be given that the Company will be able to compete
successfully against current and future competitors or that the competitive
factors faced by the Company will not adversely affect its business, financial
condition or results of operations.
Dependence on Key Vendors. The Company's ability to produce and ship
its products on schedule is highly dependent on timely receipt of an adequate
supply of components and materials from its key vendors. The Company currently
relies on single suppliers, some of whom manufacture at a number of locations,
for some of the key components of its products. The Company could incur set-up
costs and delays in manufacturing should it become necessary to replace key
vendors due to work stoppages, shipping delays, financial difficulties or other
factors and, under certain circumstances, these costs and delays could have a
material adverse effect on the Company's business or results of operations.
Product Transitions. The Company is dependent upon the introduction of
new and improved products. The Company's financial performance is dependent upon
the successful introduction of these products. The success will be dependent,
among other things, upon the ability of the Company to complete development of
certain products, customer acceptance of and demand for these products and the
ability of the Company to efficiently manufacture these products and to meet
delivery schedules. The introduction of new and enhanced products requires the
Company to manage the transition from older products in order to minimize
disruption in customer ordering patterns, avoid excess levels of older material
inventories and ensure that adequate supplies of new product can be delivered to
meet customer demand. There can be no assurance that the Company will
successfully manage the transition to selling new products. The failure to do so
could have a material adverse effect on the Company's business and results of
operations.
Fluctuations in Operating Results. Historically, the Company has
experienced variability in its quarterly results. Large orders can cause
favorable or unfavorable variations in quarterly comparisons. The volume and
timing of orders received during a quarter are difficult to forecast. Since
customers generally order products for delivery within 30 to 45 days, backlog is
not a reliable predictor of future financial performance beyond the current
quarter. In addition, the Company's results may vary significantly from quarter
to quarter depending on other factors such as the level of development, sales
and marketing expense incurred in anticipation of future revenues and the timing
of new product and applications announcements and releases by the Company and
its competitors. Many of these factors are beyond the Company's control. The
Company believes that quarterly period-to-period comparisons of its financial
results are not necessarily meaningful and should not be relied upon as an
indication of future performance. The Company believes that, in general,
retailers are reluctant to install point-of-sale scanners during their peak
fourth quarter selling period. This may have a negative effect on fourth quarter
sales.
Risks Associated with International Operations. The Company's sales to
international customers increased from $11.2 million or 19% of total net sales
in 1994 to $55.2 million or 38% of net sales in 1996. The Company intends to
continue to expand its operations outside of the United States and to enter
additional international markets and expects that international sales will
represent a substantial portion of its revenues. This will require significant
management attention and financial resources and will result in a significant
portion of the Company's net sales being subject to the risks associated with
international sales. Such risks include changes in regulatory requirements,
compliance costs associated with quality control standards, special standards
requirements, tariffs and other barriers, reduced protection for intellectual
property rights in some countries, difficulties in staffing and managing
international subsidiary operations, potentially adverse tax consequences,
country-specific product requirements and political and regulatory
uncertainties. The majority of the Company's sales in Europe and the Pacific Rim
are billed in foreign currencies and are subject to currency exchange
fluctuations. Since the Company's products are manufactured in the United
States, sales and results of operations could be impacted by fluctuations in the
U.S dollar. There can be no assurance that these factors will not have an
adverse impact on the Company's ability to increase or maintain its
international sales or on the Company's results of operations.
<PAGE>
Volatility of Stock Price. The Company's Common Shares have experienced
substantial price volatility and such volatility may occur in the future,
particularly as a result of quarter-to-quarter variations in the actual or
anticipated financial results of the Company, its competitors and other
companies in the AIDC industry. In addition, the stock market has experienced
significant price and volume fluctuations that have affected the market price of
many technology companies and have often been unrelated to the operating
performance of these companies. Broad market fluctuations, as well as general
economic and political conditions, may adversely affect the market price of the
Common Shares.
Government Regulation. The Company's products and operations are
subject to regulation by federal, state and local agencies in the United States
and its products are subject to regulation in certain foreign countries where
the Company's products are sold. While the Company believes that its products
and operations comply with all applicable regulations, there can be no assurance
of continued compliance if these regulations were to change. Noncompliance with
respect to these regulations could have a material adverse impact on the
Company's results of operations.
Anti-Takeover Effects of Certain Charter and Bylaw Provisions. The
Company's Certificate of Incorporation (the "Certificate") and Bylaws (the
"Bylaws") contain certain provisions relating to corporate governance, to the
rights of shareholders, and to the possible issuance of Preferred Shares. These
provisions may be deemed to have a potential "anti-takeover" effect in that such
provisions may delay, defer or prevent a change in control of the Company and
may delay or make more difficult a merger, tender offer or proxy contest
involving the Company. The Certificate provides for the Board of Directors to be
divided into three classes of directors serving staggered three-year terms. As a
result, approximately one-third of the Board of Directors will be elected each
year. In addition, the Certificate provides that shareholders may remove a
director only for cause and only by the vote of the holders of two-thirds of the
Common Shares of the Company. This provision, when coupled with the provision of
the Certificate authorizing only the Board of Directors to fill vacant
directorships, will preclude shareholders from removing incumbent directors
without cause and simultaneously gaining control of the Board of Directors by
filling the vacancies created by such removal with their own nominees, and will
make more difficult, and therefore may discourage, a proxy contest to change
control of the Company. The Certificate also provides that special meetings of
shareholders of the Company may be called only by the Board of Directors. These
provisions of the Certificate may be changed only by the affirmative vote of the
holders of two-thirds of the Common Shares of the Company entitled to vote on
such matters at a meeting duly called for such purpose. The Bylaws provide that
shareholders seeking to bring business before an annual meeting of shareholders
or to nominate candidates for election as directors at an annual or special
meeting of shareholders, must provide prior written notice thereof, as set forth
in the Bylaws. The Certificate provides that the Company's Preferred Shares may
be issued in the future without further shareholder approval and upon such terms
and conditions, and having such rights, privileges and preferences, as the Board
of Directors may determine.
<PAGE>
USE OF PROCEEDS
All proceeds from the sale of the Shares to be sold pursuant to this
Prospectus will be for the account of the Selling Shareholders. As a
consequence, the Company will not receive any proceeds from the sale of the
Shares offered by the Selling Shareholders. The Company will receive the
proceeds from the exercise of the Warrants by the Selling Shareholders. If all
975,000 Warrants are exercised, the Company will receive $7,800,000. The Company
plans to use those proceeds, if any, for debt reduction and for working capital.
<PAGE>
SELLING SHAREHOLDERS
To help fund the Spectra acquisition, the Company, on July 12, 1996,
entered into identical Securities Purchase Agreements the ("Securities Purchase
Agreements") with six (6) institutional purchasers (the "Purchasers") pursuant
to which the Company issued and sold its 11.25% Senior Subordinated Notes due
June 30, 2006 in the aggregate principal amount of $30,000,000.00. (See "The
Company - Recent Developments.") In connection with this financing, the Company
issued and sold to the Purchasers warrants ("Warrants") evidencing the rights to
purchase an aggregate of 975,000 Common Shares of the Company which, as amended,
have an exercise price of $8.00 per share. The Warrants may be exercised on or
after July 12, 1997 and terminate at the close of business on September 15,
2006.
Pursuant to the Securities Purchase Agreements, the Company granted to
the holders of the Warrants certain registration rights with respect to the
underlying shares. In addition, the holders of the Warrants have certain rights
relating to the repurchase by the Company of the Warrants and the shares issued
upon the exercise of the Warrants. In the event of (a) the merger or
consolidation of the Company into another corporation which does not have a
class of publicly traded equity securities registered under the Exchange Act and
where the consideration to be received by the holders of the Company's Common
Shares in connection with such merger or consolidation does not consist solely
of cash payable in full upon consummation of such merger or consolidation, or
(b) the sale, transfer or other disposition by the Company of all or any
substantial part of its properties and assets to another corporation for
consideration which (i) is other than (A) publicly traded equity securities
registered under the Exchange Act and/or (B) cash and (ii) is then distributed
to the shareholders of the Company, then the holders of the Warrants and the
underlying shares have the right to require the Company to purchase such
securities.
The following table summarizes certain information with respect to the
Selling Shareholders:
Number of
Shares Number Number of Percent of Shares
Beneficially Owned of Shares Shares Outstanding
Prior to Offering Registered Beneficially After Offering
(1) Herein Owned After (2)
Offering (2)
John Hancock Mutual 373,750 373,750 0 --
Life Insurance
Company
John Hancock 48,750 48,750 0 --
Variable Life
Insurance Company
The Lincoln 227,500 227,500 0 --
National Life
Insurance Company
Lincoln National 16,250 16,250 0 --
Income Fund, Inc.
ReliaStar Financial 16,250 16,250 0 --
Corp., as successor
to
Security-Connecticut
Corporation
The Equitable Life 292,500 292,500 0 --
Assurance Society
of the United States
(1) The number of Common Shares reflected as beneficially owned assumes the
exercise of the 975,000 Warrants currently outstanding and exercisable
within 60 days from the date hereof.
(2) Assumes all Shares registered herein are sold.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders or
by pledgees, donees, transferees or other successors in interest. Such sales
maybe made in any one or more transactions (which may involve block
transactions) in the over-the-counter market, on the Nasdaq National Market, and
any exchange in which the Company's Common Shares may then be listed, or
otherwise in negotiated transactions or a combination of such methods of sale,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling Shares to or through broker-dealers and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or purchasers of
Shares from whom they may act as agent (which compensation may be in excess of
customary commissions).
The Company has informed the Selling Shareholders that the
anti-manipulative rules under the Exchange Act (Rules 10b-6 and 10b-7) may apply
to their sales of Shares in the market. Also, the Company has informed the
Selling Shareholders of the need for delivery of copies of the Prospectus in
connection with any sale of securities registered hereunder in accordance with
applicable prospectus delivery requirements.
In connection with such sales, the Selling Shareholders and any
participating brokers and dealers may be deemed to be "underwriters" as defined
in the Securities Act. In addition, any of the Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus.
In order to comply with certain state securities laws, if applicable,
the Shares will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
Pursuant to the Securities Purchase Agreements, the Company will use
its best efforts to keep this Registration Statement current and effective for a
period of two years from the effective date hereof or such shorter period that
will terminate when all Shares have been (i) disposed of pursuant to an
effective registration statement, or (ii) sold under circumstances in which all
of the applicable conditions of Rule 144 are met. There can be no assurance that
the Selling Shareholders will sell any or all of the Shares which may be offered
under this Registration Statement.
LEGAL MATTERS
The validity of the issuance of the Shares being offered hereby will be
passed upon for the Company by Boylan, Brown, Code, Fowler, Vigdor & Wilson,
LLP, Rochester, New York. Justin L. Vigdor, a partner of this firm, is a
director of the Company, and Martin S. Weingarten, Secretary of the Company, is
counsel to this firm. As of the date of this Prospectus, members of Boylan,
Brown, Code, Fowler, Vigdor & Wilson, LLP beneficially own 23,750 Common Shares.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement from
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
No person is authorized to give any information or to make any
representation, other than those contained in or incorporated by reference in
this Prospectus, and any information or representations not contained in or
incorporated by reference in this Prospectus must not be relied upon as having
been authorized by the Company or the Selling Shareholders. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy such securities under any circumstances where such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sales made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Set forth below is an estimate of the fees and expenses
payable by the Registrant in connection with the Offering:
Securities and Exchange Commission registration fee....... $ 2,031.25
Legal fees and expenses....................................... 5,000.00
Accounting fees and expenses.................................. 5,000.00
Miscellaneous................................................. 1,000.00
TOTAL......................................................... $13,031.25
Item 15. Indemnification of Directors and Officers
Sections 721-726 of the New York Business Corporation Law, as
amended (the "BCL"), give New York corporations the power to indemnify each of
their present and former officers or directors under certain circumstances, if
such person acted in good faith and in a manner which he reasonably believed to
be in, or not opposed to, the best interests of the corporation.
The Restated Certificate of Incorporation of the Registrant as
amended, contains a provision that eliminates the personal liability of each
director to the Registrant or its shareholders for monetary damages for breach
of fiduciary duty as a director, except for any breach of the director's duty if
a judgment or other final adjudication adverse to such director establishes that
such director's acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law or that such director personally
gained, in fact, a financial profit or other advantage to which such director
was not legally entitled or that such director's acts violated Section 719 of
the BCL.
The by-laws of the Registrant contain a provision permitted by
the BCL that provides that directors and officers will be indemnified by the
Registrant to the fullest extent permitted by law for all losses that may be
incurred by them in connection with any action, suit or proceeding in which they
may become involved by reason of their service as a director or officer of the
Registrant.
<PAGE>
The Registrant has entered into an indemnity agreement with
each officer and director to provide contractual assurance that the protection
afforded by the Registrant's by-laws will be available regardless of changes in
the Registrant's charter documents or change in control of the Registrant.
The Registrant maintains an officers' and directors' liability
insurance policy insuring the covered individuals against acts or omissions
taken by such persons in their capacities as officers or directors.
Item 16. Exhibits
Exhibit No. Title
4.1 Form of Certificate for Common Shares of the
Registrant (incorporated by
reference to Exhibit 4.3 to the Registrant's
Registration Statement on Form
S-3, effective March 24, 1995 (No. 33-89178)).
4.2 Form of the 11.25% Senior Subordinated Note of
SpectraScan, Inc., due June 30, 2006 (Notes were
issued to seven Purchasers in the aggregate
principal amount of $30,000,000) (incorporated by
reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K dated July 29, 1996 (the "1996
8-K")).
4.3 Form of Note Guarantee dated July 12, 1996 made by
PSC Inc. and each of the domestic subsidiaries of
PSC Inc. to each of the purchasers of the Senior
Subordinated Notes (incorporated by reference to
Exhibit 4.2 of the 1996 8-K).
4.4 Form of Warrant issued to the Purchasers named in
the Securities Purchase Agreements dated July 12,
1996 (Warrants were issued to seven Purchasers for
an aggregate of 975,000 common shares of the
Company) (incorporated by reference to Exhibit 4.3
of the 1996 8-K).
5.1 Opinion of Boylan, Brown, Code, Fowler, Vigdor &
Wilson, LLP.
10.1 Securities Purchase Agreement dated July 12, 1996
among PSC Inc., SpectraScan, Inc. and Equitable
Life Assurance Society of the United States
(separate but identical Securities Purchase
Agreements were addressed to each of the Other
Purchasers of the Senior Subordinated Notes)
(incorporated by reference to Exhibit 10.1 of the
1996 8-K).
10.2 Amendment No. 1 dated October 10, 1996 to
Securities Purchase Agreements among PSC Inc., PSC
Scanning, Inc., and Equitable Life Assurance
Society of the United States (separate but
identical amendments were addressed to each of the
other purchasers of the Senior Subordinated Notes)
(incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 27, 1996).
10.3 Amendment No. 2 and Waivers under Securities
Purchase Agreements dated as of July 4, 1997 among
PSC Inc., PSC Scanning, Inc. and the Purchasers
named in the Securities Purchase Agreements
(incorporated by reference to Exhibit 10.4 of the
Company's Quarterly Report on Form 10-Q for the
quarter ended July 4, 1997).
10.4 Amendment No. 3 to Securities Purchase Agreements
and Warrants dated as of August 18, 1997 among PSC
Inc., PSC Scanning, Inc. and the Purchasers named
in the Securities Purchase Agreements
(incorporated by reference to Exhibit
10.6 of the Company's report on Form 10-Q/A for
the quarter ended July 4, 1997).
23.1 Consent of Boylan, Brown, Code, Fowler, Vigdor &
Wilson, LLP (contained in Exhibit 5.1 to the
Registration Statement).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on Page II-4).
Item 17. Undertakings
Rule 415 Offering. The undersigned registrant
hereby undertakes:
To file, during any period in which offers
or sales are being made, a post-effective amendment
to this registration statement;
To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement
or any material change to such information in the
registration statement;
that, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
Incorporating Subsequent Exchange Act Documents by Reference. The undersigned
Registrant hereby undertakes that, for purposes of determining any liability
under the Act, each filing of the Registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plans' annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Indemnification for Liabilities Arising Under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the"Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by any director, officer or controlling person in connection with the
securities registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and had duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized in the City of Rochester, State of New York on August 29, 1997.
PSC Inc.
By: /s/ Robert C. Strandberg
Robert C. Strandberg, President
And Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints ROBERT C. STRANDBERG, ROBERT S. EHRLICH,
and WILLIAM J. WOODARD, or any one of them, as true and lawful
attorneys-in-fact, each with full power and authority to act as such without the
other, and with full power of substitution, for him and in any and all
capacities, to sign any amendments to this Registration Statement, and to file
the same, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, the undersigned hereby ratifying
and confirming all that said attorneys-in-fact, or any of them or his substitute
or substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Robert C. Strandberg President and Chief August 29, 1997
Robert C. Strandberg Executive Officer
/s/ William J. Woodard Vice President, Chief August 29, 1997
William J. Woodard Financial Officer and
Treasurer
/s/ Scott D. Deverell Controller (Principal August 29, 1997
Scott D. Deverell Accounting Officer)
_____________________ Chairman of the Board August 29, 1997
Robert S. Ehrlich
/s/ Jay M. Eastman Director August 29, 1997
Jay M. Eastman
/s/ James W. Henry Director August 29, 1997
James W. Henry
/s/ Donald K. Hess Director August 29, 1997
Donald K. Hess
/s/ Thomas J. Morgan Director August 29, 1997
Thomas J. Morgan
/s/ James C. O'Shea Director August 29, 1997
James C. O'Shea
/s/ Jack E. Rosenfeld Director August 29, 1997
Jack E. Rosenfeld
/s/ Justin L. Vigdor Director August 29, 1997
Justin L. Vigdor
<PAGE>
August 28, 1997
PSC Inc.
675 Basket Road
Webster, NY 14580
RE: PSC Inc. - Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to PSC Inc., a New York corporation
(hereinafter called the "Company"), in connection with its Registration
Statement on Form S-3, filed under the Securities Act of 1933, relating to the
proposed distribution of up to 975,000 common shares of the Company, $.01 par
value ("Common Shares") which are issuable upon the exercise of certain
outstanding warrants (the "Warrants") of the Company and which are proposed to
be sold from time to time by certain selling shareholders.
In that connection, we have examined the Certificate of Incorporation
of the Company, as amended, the by-laws of the Company, as amended, the
Warrants, the Registration Statement, and such other documents and corporate
records as we have deemed necessary or appropriate for purposes of this opinion.
Based upon the foregoing, it is our opinion that:
1. The Company has been duly organized and is a validly
existing corporation in good standing under the laws of the State of New
York.
2. All necessary action has been taken by the Board of Directors of the
Company to authorize the Warrants and the issuance and sale of the Common Shares
upon exercise of the Warrants.
3. When certificates for Common Shares have been delivered against
payment of the purchase price therefor upon exercise of the Warrants, such
Common Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
above-referenced Registration Statement and to the reference made to us under
the caption "Legal Matters" in the Prospectus forming a part of such
Registration Statement.
Very truly yours,
BOYLAN, BROWN, CODE,
FOWLER, VIGDOR & WILSON, LLP
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 31, 1997
included in PSC Inc.'s Form 10-K for the year ended December 31, 1996 and to all
references to our Firm included in this registration statement.
Arthur Andersen LLP
Rochester, New York,
August 28, 1997
<PAGE>
August 29, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: PSC Inc. (the "Registrant")
675 Basket Road
Webster, NY 14580
Ladies and Gentlemen:
We enclose for filing pursuant to the Securities Act of 1933, as
amended (the "Act), a Registration Statement on Form S-3 relating to the
proposed distribution of up to 975,000 common shares of the Registrant which are
issuable upon the exercise of certain outstanding warrants and which are
proposed to be sold from time to time by certain selling shareholders.
The fee required for this filing has been paid in accordance with the
procedures set forth in Instructions for filing Fees, Rule 3a of the
Commission's Informal and Other Procedures.
The criteria for filing a Registration Statement on Form S-3 has been
reviewed by the Registrant and that form is deemed by the Registrant to be
appropriate for this filing.
Please direct any comments or questions you may have concerning the
Registrant's Registration Statement to the undersigned or to our attorney Martin
S. Weingarten at (716) 232-5300.
Very truly yours,
William J. Woodard
Vice President and Chief Financial Officer
