<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PIONEER-STANDARD
ELECTRONICS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PIONEER-STANDARD ELECTRONICS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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<PAGE> 2
[PIONEER LOGO]
June 10, 1994
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Pioneer-Standard Electronics, Inc., which will be held on Tuesday, July 26, 1994
at the Cleveland South Hilton Inn, 6200 Quarry Lane, Cleveland, Ohio at 11:00
a.m. A map to the Cleveland South Hilton Inn is set forth on the inside back
cover of the Proxy Statement. Your Board of Directors and management look
forward to greeting personally those shareholders able to attend.
At the meeting, in addition to electing three Directors, your Board is
asking shareholders to approve an amendment to the Company's Amended Articles of
Incorporation to increase the number of authorized Common Shares. These
proposals are fully set forth in the accompanying Proxy Statement, which you are
requested to read thoroughly.
For the reasons set forth in the Proxy Statement, your Board of Directors
recommends a vote "FOR" each of the proposals.
It is important that your shares are represented and voted at the meeting
whether or not you plan to attend. Accordingly, you are requested to sign, date
and mail the enclosed Proxy in the envelope provided, at your earliest
convenience.
Thank you for your cooperation and continued support.
<TABLE>
<S> <C>
Preston B. Heller, Jr. James L. Bayman
Chairman of the Board and President and Chief
Chief Executive Officer Operating Officer
</TABLE>
<PAGE> 3
[Pioneer Logo Here]
PIONEER-STANDARD ELECTRONICS, INC.
4800 EAST 131ST STREET / CLEVELAND, OHIO 44105
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of the Shareholders (the "Annual Meeting") of
Pioneer-Standard Electronics, Inc. (the "Company") will be held at the Cleveland
South Hilton Inn, 6200 Quarry Lane, Cleveland, Ohio, on Tuesday, July 26, 1994,
at 11:00 A.M., Eastern Daylight Time, for the following purposes:
1. To elect three (3) Class C members of the Board of Directors of the
Company to hold office for a term of three (3) years and until their
respective successors are elected;
2. To amend the Company's Amended Articles of Incorporation to
increase the number of authorized Common Shares of the Company from
20,000,000 Common Shares to 40,000,000 Common Shares; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on June 1, 1994 are
entitled to notice of the Annual Meeting and to vote thereat.
By Order of the Board of Directors.
William A. Papenbrock
Secretary
June 10, 1994
PLEASE SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
[Pioneer Logo Here]
PIONEER-STANDARD ELECTRONICS, INC.
4800 EAST 131ST STREET / CLEVELAND, OHIO 44105
------------------
MAILED TO SHAREHOLDERS ON JUNE 10, 1994
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 26, 1994
The Proxy enclosed with this Proxy Statement is solicited by the Board of
Directors of Pioneer-Standard Electronics, Inc. (the "Company") and is to be
used at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on
July 26, 1994, and any adjournments thereof. The time, place and purposes of the
Annual Meeting are stated in the Notice of Annual Meeting of Shareholders which
accompanies this Proxy Statement. Without affecting any vote previously taken, a
shareholder may revoke his Proxy by giving notice to the Company in writing at
any time before its exercise or in open meeting. Unless so revoked, shares
represented by a valid Proxy (in the form enclosed and properly signed) received
in time for the voting will be voted in accordance with the directions contained
therein.
The holders of Common Shares of the Company (the only class of shares
outstanding) will be entitled to vote at the Annual Meeting. At the close of
business on June 1, 1994, the date fixed for the determination of persons
entitled to vote, there were 9,912,906 Common Shares outstanding and entitled to
vote at the Annual Meeting, each share being entitled to one vote. Under Ohio
law and the Company's Amended Code of Regulations, if a quorum is present at the
Annual Meeting, the three (3) nominees for election as Directors who receive the
greatest number of votes cast for the election of Directors at the Annual
Meeting by the Common Shares present in person or by proxy and entitled to vote
will be elected Directors. However, the proposal to amend the Company's Amended
Articles of Incorporation ("Proposal 2") must be approved by the affirmative
vote of the holders of record of at least two-thirds of the Common Shares. Votes
that are withheld with respect to the election of Directors will not be counted
in determining the outcome of the election. An abstention from voting any share
with respect to Proposal 2 will have the practical effect of a vote against
Proposal 2. A broker non-vote with respect to any share will not effect the
election of Directors, since the share is not considered present for voting
purposes; however, a broker non-vote with respect to any share will have the
practical effect of a vote against Proposal 2, since the adoption of Proposal 2
is determined on the basis of outstanding shares, rather than shares present.
If notice in writing is given by any shareholder to the President, a Vice
President or the Secretary of the Company not less than 48 hours before the time
fixed for holding the Annual Meeting that he desires that the voting for the
election of Directors be cumulative, an announcement of the giving of such
notice shall be made upon the convening of the meeting by the Chairman or
Secretary or may be made by or on behalf of the shareholder giving such notice.
Cumulative voting permits each shareholder to cumulate his voting power at such
election by giving one nominee as many votes as equals the product of the number
of Directors to be elected multiplied by the number of his votes, or by
distributing his votes on the same principle among two or more nominees, as the
shareholder sees fit.
1
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Amended Code of Regulations of the Company provides that the Board of
Directors shall be divided into three classes: Class A, Class B and Class C. All
Directors serve for three-year terms and until their respective successors are
elected. The authorized number of Directors of the Company is presently fixed at
ten, with a vacancy existing in Class B.
At this Annual Meeting, three Class C Directors are to be elected for a
three-year term ending at the Annual Meeting in 1997. The nominees for election
are Preston B. Heller, Jr., Arthur Rhein and Thomas C. Sullivan, all of whom
currently serve as Directors of the Company.
The proxyholders named in the accompanying Proxy or their substitutes will
vote such Proxy at the Annual Meeting or any adjournments thereof for the
election as Directors of the three nominees named above unless the shareholder
instructs, by marking the appropriate space on the Proxy, that authority to vote
is withheld. If cumulative voting is in effect, the proxyholders shall have full
discretion and authority to vote for any one or more of such nominees. In the
event of cumulative voting, the proxyholders will vote the shares represented by
each Proxy so as to maximize the number of Board of Directors' nominees elected
to the Board. Each of the nominees has indicated his willingness to serve as a
Director, if elected. If any nominee should become unavailable for election
(which contingency is not now contemplated or foreseen), it is intended that the
shares represented by the Proxy will be voted for such substitute nominee as may
be named by the Board of Directors. In no event will the accompanying Proxy be
voted for more than three nominees or for persons other than those named above
and any such substitute nominee for any of them.
The following table sets forth with respect to each of the nominees for
election and the other Directors whose terms will continue after the Annual
Meeting: his principal occupation; the period during which he has served as a
Director of the Company; his age; and the expiration date of his term or the
term for which he is a nominee.
NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT
FOR PAST FIVE YEARS AND OTHER DIRECTOR PROPOSED
DIRECTORSHIPS OF PUBLICLY-HELD CONTINUOUSLY TERM
NAME CORPORATIONS SINCE AGE EXPIRES
- - ---------------------------- --------------------------------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
CLASS C DIRECTORS
Preston B. Heller, Jr.(1)... Chairman of the Board and Chief 1969 64 1997
Executive Officer of the Company;
Director, National City Bank (a
subsidiary of National City
Corporation), and Sudbury, Inc.
Arthur Rhein................ Senior Vice President 1990 48 1997
Thomas C. Sullivan(1)(3).... Chairman of the Board and Chief 1984 56 1997
Executive Officer, RPM, Inc. (Specialty
Coatings and Membranes); Director,
National City Bank (a subsidiary of
National City Corporation)
</TABLE>
2
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT
FOR PAST FIVE YEARS AND OTHER DIRECTOR
DIRECTORSHIPS OF PUBLICLY-HELD CONTINUOUSLY TERM
NAME CORPORATIONS SINCE AGE EXPIRES
- - ---------------------------- --------------------------------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
CLASS A DIRECTORS
Frederick A. Downey(1)...... President, F.A. Downey Associates, Inc. 1983 66 1995
(Venture Capital/Consulting); prior
thereto, Executive Vice President --
Finance and Administration and
Director, Parker-Hannifin Corporation
(Motion Control Systems and Components)
until retirement on January 1, 1988;
Director, Main Street Bancorp
Victor Gelb(1)(2)(3)........ President, Victor Gelb, Inc. 1971 67 1995
(Industrial Fibers); Chairman of the
Board, Capitol American Financial Corp.
(Insurance) until January, 1990;
Director, Specialty Chemical Resources,
Inc.
Edwin Z. Singer(1)(2)(3).... Chairman of the Board, Sandusco, Inc. 1974 63 1995
(Wholesale Merchandising, Real Estate);
Director, Star Bank, N.A., Cleveland
CLASS B DIRECTORS
James L. Bayman............. President and Chief Operating Officer 1984 57 1996
of the Company
Gordon E. Heffern(3)........ Retired Chairman of the Board and Chief 1989 70 1996
Executive Officer, Society Corporation
and Society National Bank since 1987
and 1985, respectively (Banking);
Director, A. Schulman Inc., and Scripps
Howard Broadcasting Company
Karl E. Ware(2)............. Chairman and Chief Executive Officer, 1988 67 1996
Ware Industries, Inc. (Metal Wire Forms
and Steel Components); Director, Acme-
Cleveland Corporation, Lesco, Inc., and
Lubrizol Corporation
</TABLE>
- - ---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
3
<PAGE> 7
INFORMATION REGARDING MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS AND
COMPENSATION OF DIRECTORS
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. The Executive Committee, which held no meetings during
the last fiscal year, exercises the power and authority of the Board of
Directors in the interim period between Board meetings. The Audit Committee,
which held three meetings during the last fiscal year, reviews with the
Company's independent auditors the proposed scope of the Company's annual audits
and audit results, reviews the adequacy of internal financial controls and
internal audit functions, provides recommendations as to the engagement of
independent auditors, and reviews any problems identified by either the internal
or external audit functions. The Compensation Committee, which held two meetings
during the last fiscal year, reviews and makes certain decisions concerning
executive officers' salaries and bonuses and the Company's stock option plans.
The Compensation Committee also reviews and makes recommendations concerning
Director compensation. The Board of Directors has no nominating committee.
The Board of Directors held four meetings during the fiscal year ended
March 31, 1994. During that fiscal year, no Director attended fewer than 75% of
the aggregate of (i) the total number of meetings of the Board of Directors held
during the period he served as a Director and (ii) the total number of meetings
held by Committees of the Board on which he served, during the periods that he
served, with the exception of Gordon E. Heffern who attended 67% of such
meetings.
During the fiscal year ended March 31, 1994, Directors who are not also
employees of the Company received an annual fee of $10,000 and $1,000 for each
Board or Committee meeting he attended. In addition, such Directors are to
receive $200 for each Board or Committee telephone conference in which he
participates. As Chairman of the Audit Committee, Mr. Singer received $2,000 in
addition to any fees he received as a Committee member, and, as Chairman of the
Compensation Committee, Mr. Gelb received $1,000 in addition to any fees he
received as a Committee member. In the event that more than one Board or
Committee meeting is held on one day, the Directors involved only receive $500
for the second meeting attended.
4
<PAGE> 8
SHARE OWNERSHIP
The following table sets forth the number of Common Shares of the Company
beneficially owned by each of the nominees for Director and the Directors whose
terms will continue after the Annual Meeting; the Chief Executive Officer and
each of the four most highly-compensated executive officers of the Company
during fiscal 1994; all Directors and officers as a group; and the percent of
the class so owned as of June 1, 1994.
<TABLE>
<CAPTION>
NUMBER OF
COMMON
SHARES
BENEFICIALLY PERCENT OF
NAME OWNED(1) CLASS
- - ---------------------------------------------------------------- ------------ ----------
<S> <C> <C>
James L. Bayman................................................. 256,620 2.6
Frederick A. Downey............................................. 2,000 *
Victor Gelb..................................................... 12,112 0.1
John V. Goodger................................................. 9,400(2) 0.1
Gordon E. Heffern............................................... 3,510 *
Preston B. Heller, Jr. ......................................... 482,399(3) 4.9
Janice M. Margheret............................................. 55,200(4) 0.6
Arthur Rhein.................................................... 61,050(5) 0.6
Edwin Z. Singer................................................. 36,259(6) 0.4
Thomas C. Sullivan.............................................. 1,500 *
Karl E. Ware.................................................... 600 *
All Directors and officers as a Group (12 persons).............. 921,400(7) 9.2
</TABLE>
- - ---------------
* Shares owned are less than one-tenth of one percent of class.
(1) Except where otherwise indicated, beneficial ownership of the Common Shares
held by the persons listed in the table above is comprised of both sole
voting and investment power, or voting and investment power that is shared
with the spouses of such persons.
(2) Includes 8,950 Common Shares which Mr. Goodger has the right to acquire
within 60 days of June 1, 1994 through the exercise of stock options granted
to him under the 1982 Incentive Stock Option Plan and the 1991 Stock Option
Plan.
(3) Includes 2,483 Common Shares held in a trust for which Mr. Heller serves as
co-trustee and shares voting and dispositive power.
(4) Includes 55,050 Common Shares which Ms. Margheret has the right to acquire
within 60 days of June 1, 1994 through the exercise of stock options granted
to her under the 1982 Incentive Stock Option Plan and the 1991 Stock Option
Plan.
(5) Includes 58,050 Common Shares which Mr. Rhein has the right to acquire
within 60 days of June 1, 1994, through the exercise of stock options
granted to him under the 1982 Incentive Stock Option Plan and the 1991 Stock
Option Plan.
(6) Includes 30,000 Common Shares beneficially owned by a corporation controlled
by Mr. Singer.
(7) The number of Common Shares shown as beneficially owned by the Company's
Directors and officers as a group includes 122,050 Common Shares which such
persons have the right to acquire within 60 days of June 1, 1994 through the
exercise of stock options granted to them under the 1982 Incentive Stock
Option Plan and the 1991 Stock Option Plan.
5
<PAGE> 9
The following table sets forth information as of June 1, 1994 with respect
to each person known to the Company to be the beneficial owner of more than 5%
of the outstanding Common Shares of the Company:
<TABLE>
<CAPTION>
NUMBER OF COMMON
NAME AND ADDRESS OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- - ------------------------------------------ ---------------------- ---------------
<S> <C> <C>
FMR Corp.
82 Devonshire Street 1,085,513(1) 10.95
Boston, Massachusetts 02109
</TABLE>
- - ---------------
(1) According to a Schedule 13G furnished to the Company, FMR Corp. has sole
power to vote or to direct the vote of 7,250 Common Shares and sole power to
dispose of or direct the disposition of all 1,085,513 Common Shares that it
beneficially owns.
6
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
years ended March 31, 1994, 1993 and 1992, of all those persons who were at
March 31, 1994, (i) the Chief Executive Officer, and (ii) the other four most
highly compensated executive officers of the Company (the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPEN-
SATION
ANNUAL AWARDS
COMPENSATION ------------
-----------------------------------------------
OTHER
ANNUAL SECURITIES ALL OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION(1)(2) OPTIONS SATION(2)(3)
- - ------------------------- ----- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Preston B. Heller, Jr. 1994 $210,000 $312,639 $ -- -- $ 13,992
Chairman of the 1993 150,000 168,850 -- -- 9,415
Board and Chief 1992 150,000 54,731 -- -- --
Executive Officer
James L. Bayman 1994 250,000 357,301 -- -- 11,957
President and Chief 1993 190,000 192,972 -- -- 8,078
Operating Officer 1992 190,000 62,549 -- -- --
Arthur Rhein 1994 200,000 290,307 -- 50,000 12,701
Senior Vice President 1993 140,000 156,790 -- -- 8,214
1992 140,000 50,821 -- 15,000 --
Janice M. Margheret 1994 185,000 223,313 -- 50,000 11,675
Senior Vice President 1993 125,000 96,486 -- -- 8,070
1992 125,000 31,275 -- 15,000 --
John V. Goodger 1994 125,000 66,994 -- 15,000 8,643
Vice President, 1993 112,500 36,182 -- -- 5,668
Treasurer and Assistant 1992 112,500 11,728 -- 3,750 --
Secretary
</TABLE>
- - ---------------
(1) Unless otherwise indicated, no executive officer named in the Summary
Compensation Table received personal benefits or perquisites in excess of
the lesser of $50,000 or 10% of his or her aggregate salary and bonus.
(2) In accordance with the transitional provisions of the rules on executive
officer compensation adopted by the Securities and Exchange Commission,
amounts under "Other Annual Compensation" and "All Other Compensation" are
excluded for the Company's 1992 fiscal year.
(3) Consists of contributions by the Company on behalf of the Named Executives
to the Pioneer Employees' Profit Sharing Retirement Plan during fiscal 1993
and fiscal 1994.
7
<PAGE> 11
OPTION GRANTS, EXERCISES AND YEAR-END VALUES
The following table sets forth information regarding grants of stock
options to the Named Executives under the 1991 Stock Option Plan during the
fiscal year ended March 31, 1994. The options were granted at the fair market
value on the date of grant for a term of ten (10) years.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION
- - --------------------------------------------------------------------------------- FOR OPTION TERM (10 YEARS)(3)
% OF TOTAL -------------------------------------
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE 5% 10%
UNDERLYING EMPLOYEES OR BASE ----------------------- ---------
OPTIONS IN FISCAL PRICE EXPIRATION PRICE PER AGGREGATE PRICE PER
NAME GRANTED YEAR ($/SHARE) DATE SHARE VALUE SHARE
- - ------------------------ --------- ---------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Preston B. Heller,
Jr.................... -- -- -- -- -- -- --
James L. Bayman......... -- -- -- -- -- -- --
Arthur Rhein............ 50,000(1) 16.7% $ 13.75 4/26/03 $ 22.40 $432,500 $ 35.66
Janice M. Margheret..... 50,000(1) 16.7% 13.75 4/26/03 22.40 432,500 35.66
John V. Goodger......... 15,000(2) 5.0% 13.75 4/26/03 22.40 129,750 35.66
<CAPTION>
- - ------------------------
AGGREGATE
NAME VALUE
- - ------------------------ ----------
<S> <C>
Preston B. Heller,
Jr.................... --
James L. Bayman......... --
Arthur Rhein............ $1,095,500
Janice M. Margheret..... 1,095,500
John V. Goodger......... 328,650
</TABLE>
- - ---------------
(1) Option shares become exercisable on the anniversary date of the date of
grant as follows: 300 shares in 1994, 2,500 shares in 1995, 7,200 shares
beginning in 1996 through 2001 and 4,000 shares in 2002.
(2) Option shares become exercisable on the anniversary date of the date of
grant as follows: 2,500 shares in 1994 and thereafter 2,500 shares per year.
(3) Realizable values are reported net of the option exercise price.
Shown below is information with respect to the exercise of options to
purchase the Company's Common Shares by the Named Executives and unexercised
options to purchase the Company's Common Shares for the Named Executives.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED ON VALUE ----------------------------- -------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------------------- ----------- ---------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Preston B. Heller, Jr....... -- -- -- -- -- --
James L. Bayman............. 135,000 $2,954,005 -- -- -- --
Arthur Rhein................ 3,000 61,380 53,250 63,500 $ 838,532 $ 646,121
Janice M. Margheret......... -- -- 50,250 63,500 789,748 646,121
John V. Goodger............. -- -- 5,250 15,000 71,311 135,000
</TABLE>
- - ---------------
(1) Based on the difference between the exercise price of such options and the
closing price of a share of the Company's Common Shares on the NASDAQ
National Market System on March 31, 1994 ($22.75).
8
<PAGE> 12
EMPLOYMENT AGREEMENTS
The Company has Amended and Restated Employment Agreements with Preston B.
Heller, Jr., Chairman of the Board and Chief Executive Officer, James L. Bayman,
President and Chief Operating Officer, Arthur Rhein, Senior Vice President and
Janice M. Margheret, Senior Vice President, and as authorized by the
Compensation Committee on April 22, 1994, effective as of April 1, 1994, the
Company entered into a new Amended and Restated Employment Agreement with John
V. Goodger, Vice President, Treasurer and Assistant Secretary (the "Employment
Agreements"). The Employment Agreements provide for a continuous employment
arrangement subject to (i) death or disability, (ii) termination by the Company,
for cause (as defined) or without cause at any time, and (iii) the officer's
voluntary termination. The Employment Agreements also provide for an annual base
salary of $210,000 for Mr. Heller, $250,000 for Mr. Bayman, $200,000 for Mr.
Rhein and $185,000 for Ms. Margheret. Mr. Goodger's new Employment Agreement
reflects a $5,000 increase in his annual base salary from $125,000 to $130,000.
In addition, the Employment Agreements provide for annual cash incentive
bonuses, in accordance with a formula based upon the product of the sum of the
Company's actual operating income (as defined) plus equity in profits or losses
attributable to the Company's affiliate, Pioneer Technologies Group, Inc., as
multiplied by a ratio of the Company's actual return on capital (as defined),
compared with a pre-determined standard. Mr. Heller, Mr. Bayman, Mr. Rhein, Ms.
Margheret and Mr. Goodger receive annual cash incentive bonuses in an amount
equal to 7/10 of 1%, 4/5 of 1%, 65/100 of 1%, 5/10 of 1% and 15/100 of 1%,
respectively, of the Company's adjusted income as computed in accordance with
such formula.
Upon termination of an executive officer's employment by the Company
without cause, and subject to compliance by the officer with certain provisions
relating to competition, confidential information and noninterference, each
officer will be entitled to receive his or her base salary for the month in
which termination shall have occurred, and an amount per month consisting of
1/24 of the total of an amount equal to his or her two previous 24 months of
base salary plus an amount equal to the incentive cash bonus for the two
previously completed fiscal years, for a period of 24 months in the case of
Messrs. Heller and Bayman, 12 months in the case of Mr. Rhein and Ms. Margheret,
and six months in the case of Mr. Goodger. In addition to such monthly payments,
each officer would also receive his or her vested bonus payable in accordance
with certain provisions of the Employment Agreements and certain benefits
provided to the officers under certain employee benefit plans, programs or
arrangements.
In the event of termination in connection with a change in control, the
officers have the right to terminate their employment with the Company and are
entitled to receive an amount equal to one month of their then base salary, plus
an amount equal to his or her previous 24 months of base salary and an amount
equal to his or her bonus for the two previously completed fiscal years, payable
in one payment immediately upon such termination. Each officer also will receive
his or her vested bonus payable in accordance with certain provisions of the
Employment Agreements. For two years following such termination, the officer
will also be entitled to all benefits and service credits for benefits under all
employee benefit plans, programs or arrangements of the Company. The Employment
Agreements also provide for the payment by the Company of legal fees incurred by
the officers in the event that, following a change in control, such officers may
be caused to institute or defend legal proceedings to enforce their rights under
the Employment Agreements. A "change in control" is defined as (i) the
acquisition by any person of beneficial ownership, directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities or (ii) during any period of 12
consecutive months, individuals who were Directors of the Company at the
beginning of the period, and for whom such officers voted as a shareholder,
cease for any reason to constitute at least a majority of the Board of Directors
of the Company.
9
<PAGE> 13
Termination for disability will result in continued payment of the
officer's then base salary plus bonus for a maximum period of six months in the
case of Messrs. Heller and Bayman, or three months, in the case of Mr. Rhein,
Ms. Margheret and Mr. Goodger, following which the officer will receive
disability benefits under the Company's long term disability program. Each
officer would also receive his or her vested bonus payable in accordance with
certain provisions of the Employment Agreements. Upon the voluntary termination
or termination for cause (as defined) of any such officer, no further
remuneration payments will be due him or her.
CERTAIN TRANSACTIONS
During the fiscal year ended March 31, 1994, the Company paid an aggregate
of $354,704 for office furnishings to a company controlled by the wife of James
L. Bayman, President, Chief Operating Officer and a Director of the Company.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
GENERAL
The Company's Compensation Committee is comprised of four (4) Directors,
and each member of the Compensation Committee is a non-employee Director of the
Company. The Compensation Committee is responsible for reviewing and
implementing the Company's existing and proposed executive compensation
arrangements and plans and to administer the 1982 Incentive Stock Option Plan,
as amended, and the 1991 Stock Option Plan, as amended.
Set forth below is a report submitted by Messrs. Gelb, Heffern, Singer, and
Sullivan in their capacity as members of the Compensation Committee addressing
the Company's compensation objectives and philosophies, together with a
discussion of the factors considered in determining the compensation for the
Company's 1994 fiscal year of Mr. Preston B. Heller, the Chief Executive Officer
of the Company, and Messrs. Bayman, Rhein and Goodger and Ms. Margheret, the
four executive officers other than Mr. Heller who, for fiscal 1994, were the
Company's most highly compensated executive officers (collectively, with Mr.
Heller, the "Named Executives").
OBJECTIVES AND PHILOSOPHY
The Company's compensation programs are intended to provide its executives
with a mix of salary, benefits, and incentive compensation arrangements that:
- are at levels that will attract and retain qualified executives;
- are closely linked to the accomplishments of the Company and each
executive's individual performance; and
- encourage stock ownership by aligning executive compensation with
shareholder value.
The compensation of executives is intended to assist the Company in
obtaining the objectives set forth above. The Company seeks to provide its
executives with compensation that is comparable to similarly situated companies,
specifically, Anthem Electronics, Inc., Arrow Electronics, Inc., Avnet, Inc.,
Bell Industries, Inc., Hall-Mark Electronics Corporation, Marshall Industries
and Wyle Laboratories, and commensurate with the performance, experience, and
responsibilities of each executive. Cash incentive
10
<PAGE> 14
bonuses are awarded to executives pursuant to a formula linked to the Company's
financial performance. Long-term incentive opportunities in the form of stock
options are granted to executives to provide them with an opportunity to acquire
a proprietary interest in the Company, thereby providing them with an incentive
to promote the long-term interests of the Company's shareholders. In addition,
the general business outlook of the Company and the electronic distribution
industry in general is considered when determining the compensation of the
Company's executives.
The Company's compensation arrangements and plans are currently structured
in such a manner that it is unlikely (other than in the case of a "change in
control") that the compensation which may be paid to any Named Executive in any
year will exceed $1 million. The Compensation Committee believes that it is in
the best interests of shareholders to retain as much flexibility as possible,
presently and in the future, with respect to the Company's compensation
arrangements and plans. However, the Compensation Committee recognizes that the
recently enacted Section 162(m) of the Internal Revenue Code of 1986, as
amended, provides that no deduction is allowed for remuneration paid to any
Named Executive by the Company to the extent the remuneration paid exceeds $1
million. In the future, if the Compensation Committee determines that the
compensation which may be paid to any Named Executive in any year could exceed
$1 million, the Compensation Committee may reexamine its policy.
FISCAL 1994 COMPENSATION DECISIONS
Salaries. On April 27, 1993, Mr. Heller, the Company's Chief Executive
Officer, presented a proposal to the Compensation Committee that it approve
increased salaries of $190,000 to $250,000, $140,000 to $200,000, $125,000 to
$185,000 and $112,500 to $125,000 for Mr. Bayman, Mr. Rhein, Ms. Margheret and
Mr. Goodger, respectively. In determining whether to make these salary
adjustments for fiscal 1994, consideration was given to the performance and
responsibilities of each executive, and the levels of compensation of similarly
situated companies, specifically, Anthem Electronics, Inc., Arrow Electronics,
Inc., Avnet, Inc., Bell Industries, Inc., Hall-Mark Electronics Corporation,
Marshall Industries and Wyle Laboratories. The Compensation Committee strives to
provide its executives with salaries at a competitive median in comparison to
such similarly situated companies. The major part of the Compensation
Committee's decisions with respect to salaries was based on Mr. Heller's
recommendations. The balance of the Compensation Committee's decision was based
on factors relating to the business outlook of the Company and the electronic
distribution industry in general. The salaries of the four (4) executives were
increased by the Compensation Committee as proposed by Mr. Heller for fiscal
1994.
Annual Incentive Compensation. Annual incentive compensation is awarded to
the Named Executives in the form of cash bonuses paid pursuant to a formula
contained in their employment agreements. The formula is based upon the product
of the sum of the Company's actual operating income (as defined) plus equity in
profits or losses attributable to the Company's affiliate, Pioneer Technologies
Group, Inc., as multiplied by a ratio of the Company's actual return on capital
(as defined) compared with a pre-determined standard. On April 27, 1993, the
Compensation Committee approved the payment of the cash incentive bonus, for the
fiscal year ending March 31, 1994, to Mr. Heller, Mr. Bayman, Mr. Rhein, Ms.
Margheret and Mr. Goodger in an amount equal to 7/10 of 1%, 4/5 of 1%, 65/100 of
1%, 5/10 of 1% and 15/100 of 1%, respectively, of the Company's adjusted 1994
fiscal year income as computed in accordance with the formula contained in the
Named Executives' employment agreements. Based upon the results of operations
for the Company's March 31, 1994 fiscal year, Mr. Heller will receive a cash
incentive bonus of $312,639, Mr. Bayman will receive a cash incentive bonus of
$357,301, Mr. Rhein will receive a cash incentive bonus of $290,307, Ms.
Margheret will receive a cash incentive bonus of $223,313 and Mr. Goodger will
receive a cash incentive bonus of $66,994.
11
<PAGE> 15
Stock Options. On April 27, 1993, Mr. Heller presented a proposal to the
Compensation Committee that it authorize the grant of options of 50,000 Common
Shares to Ms. Margheret, 50,000 Common Shares to Mr. Rhein and 15,000 Common
Shares to Mr. Goodger. In determining whether to award such stock options, the
Compensation Committee reviewed the proprietary interest in the Company held by
Messrs. Rhein and Goodger and Ms. Margheret, the desirability of increasing such
proprietary interest, and the performance of Messrs. Rhein and Goodger and Ms.
Margheret. The major part of the Compensation Committee's decision with respect
to the grant of stock options was based on Mr. Heller's recommendations, and the
balance of the Committee's decision was based on the other factors discussed
above. After consideration of these matters, the Compensation Committee decided
to award the stock options, as proposed by Mr. Heller, to Messrs. Rhein and
Goodger and Ms. Margheret at exercise prices equal to $13.75, which was the last
sales price of the Common Shares on April 27, 1993.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Heller included in his April 27, 1993 proposal for salary increases of
the executives, a proposal to increase his salary from $150,000 to $210,000. The
Compensation Committee reviewed the same policies reviewed in connection with
the other Named Executives' salaries as described. In addition, Mr. Heller's
performance was also measured by the Company's financial condition and the
general success in achieving strategic objectives. The major part of the
Compensation Committee's decision with respect to Mr. Heller's salary was based
on Mr. Heller's recommendation, and the balance of the Compensation Committee's
decision was based on the other factors discussed above. Mr. Heller also
received the $312,639 cash incentive bonus for fiscal year 1994 as described
above.
ADDITIONAL MATTERS
On April 22, 1994, the Compensation Committee authorized an amendment to
the Amended and Restated Employment Agreement for Mr. Goodger, effective April
1, 1994, to provide for a $5,000 salary increase for Mr. Goodger. The
Compensation Committee did not increase the salaries of the other executive
officers for fiscal 1995. The Compensation Committee also authorized the grant
of options under the 1991 Stock Option Plan, at an option price equal to the
last sales price on April 22, 1994 ($22.50), to purchase 9,600 Common Shares to
Ms. Margheret, 9,600 Common Shares to Mr. Rhein, 6,000 Common Shares to Mr.
Goodger and 123,000 Common Shares to other employees.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Victor Gelb (Chairman)
Gordon E. Heffern
Edwin Z. Singer
Thomas C. Sullivan
12
<PAGE> 16
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following chart compares the value of $100 invested in the Company's
Common Shares with a similar investment in the S&P 500 Stock Index ("S&P 500")
and the companies listed in the SIC Code 5065 -- Electronic Parts and Equipment
N.E.C. Index ("Peer Group") for the period March 31, 1989 through March 31,
1994.
<TABLE>
<CAPTION>
Measurement Period Pioneer-Stan- S&P 500 In-
(Fiscal Year Covered) dard dex Peer Group
<S> <C> <C> <C>
1989 100 100 100
1990 104 119 131
1991 145 136 137
1992 122 152 163
1993 279 175 214
1994 377 177 215
</TABLE>
13
<PAGE> 17
PROPOSAL NO. 2
AMENDMENT TO AMENDED ARTICLES OF INCORPORATION
The total authorized capital of the Company, as set forth in Article Fourth
of the Company's Amended Articles of Incorporation, consists of 20,000,000
shares, all of which are Common Shares, without par value. Under the proposed
amendment to the Amended Articles of Incorporation, the total authorized capital
will be increased to 40,000,000 shares, all of which shall be Common Shares,
without par value. The Board of Directors approved the proposal on April 26,
1994. The Board of Directors does not presently contemplate proposing any other
changes to the Company's Amended Articles of Incorporation or Amended Code of
Regulations. In addition to the 9,912,906 presently issued and outstanding
Common Shares, the Company has reserved 1,024,625 Common Shares for issuance
pursuant to its stock option plans.
The principal purpose for the proposal is to make available additional
Common Shares for possible stock splits, dividends, acquisitions, public
offerings and other corporate purposes. The Company does not presently have any
agreements or understandings with respect to transactions which would call for
the issuance of any of the additional 20,000,000 Common Shares. Shareholders
have no pre-emptive rights with respect to the issuance of additional Common
Shares, and the issuance of additional Common Shares would not require any
further shareholder approval, except as otherwise expressly required under Ohio
Corporation Law.
The Company's purpose in increasing the number of authorized Common Shares
available for issuance is described above. Nevertheless, the authorization of
additional Common Shares might be considered as having the effect of
discouraging an attempt by another person or entity, through the acquisition of
a substantial number of Common Shares, to acquire control of the Company with a
view to effecting a merger, sale of the Company's assets or similar transaction,
since the issuance of additional Common Shares could be used to dilute the share
ownership or voting rights of such person or entity. Moreover, any of the
authorized but unissued Common Shares could be privately placed with purchasers
supportive of incumbent management, making a change in control of the Company
more difficult.
The Company's Amended Articles of Incorporation contains provisions
relating to shareholder approval of certain business combinations. The Amended
Articles of Incorporation provide that certain business combinations involving
the Company and any person beneficially owning 10% or more of the Common Shares
must be approved by the affirmative vote of 80% of the outstanding shares
entitled to vote generally in the election of Directors. However, the 80% voting
requirement does not apply if (1) not less than a majority of continuing
Directors, has approved, in advance, the acquisition of those outstanding shares
of the Company purchased by the 10% shareholder or has approved the business
combination, or (2) the business combination is a merger or consolidation and
the consideration to be received by holders of Common Shares as a result of the
business combination is not less than (a) the greater of (i) the highest price
per share, including commissions, paid by such person in obtaining 10% or more
of the Company's Common Shares during the two-year period ending on the date of
the most recent purchase of any such shares, or (ii) the highest sales price
reported for the Common Shares during the two-year period preceding the first
public announcement of the proposed business combination, (b) plus interest and
less cash dividends.
In addition, the Company's Amended Code of Regulations provides that the
Board of Directors shall be divided into three classes and requires that any
proposal to increase or decrease the number of Directors be approved by the vote
of the holders of a majority of shares entitled to vote on the proposal;
provided, however, that the number of Directors of any class shall not consist
of less than three Directors. Moreover, the Amended Code of Regulations provides
that the Directors may be removed from office by the vote of the holders of
two-thirds of the voting power entitled to elect Directors in place of those
removed; provided,
14
<PAGE> 18
however, that unless all the Directors of a particular class are removed, no
individual Director may be removed without cause if a sufficient number of
shares are cast against such removal which, if cumulatively voted at an election
for all the Directors, or all the Directors of a particular class, as the case
may be, would be sufficient to elect at least one Director. The purpose of these
provisions is to prevent Directors from being removed from office prior to the
expiration of their respective terms, thus protecting the safeguards inherent in
the classified Board structure unless dissatisfaction with the performance of
one or more Directors is widely shared by the Company's shareholders. These
provisions could also have the effect of increasing the amount of time required
for an acquiror to obtain control of the Company by electing a majority of the
Board of Directors and may also make the removal of incumbent management more
difficult and discourage or render more difficult certain mergers, tender
offers, proxy contests, or other potential takeover proposals. To the extent
that these provisions have the effect of giving management more bargaining power
in negotiations with a potential acquiror, they could result in management using
the bargaining power not only to try to negotiate a favorable price for an
acquisition, but also to negotiate favorable terms for management.
Some shareholders might consider any increase in anti-takeover protection
undesirable because to the extent that any anti-takeover protection discourages
speculation or short-term trading in the Company's Common Shares, the market
impact of such protection could be reduced trading and a lower price. In
addition, shareholders may favor a proposed change in management or control.
However, it is not the intent of the Company to use the additional authorized
Common Shares to block any takeover attempt or change in management or control,
without consideration of the benefits to the Company and its shareholders. There
presently is no takeover proposal before the Company, nor is the Company aware
that any person contemplates such a proposal.
The Board of Directors recommends a vote FOR this proposal. The persons
named in the accompanying Proxy or their substitutes will vote such Proxy for
this proposal unless it is marked to the contrary. A favorable vote of
two-thirds of the outstanding Common Shares on the record date is required for
adoption of the proposed amendment.
INDEPENDENT AUDITORS
The Board of Directors plans on selecting, at the next Board of Directors
meeting to be held in July, 1994, Ernst & Young to audit the accounts of the
Company for the fiscal year ending March 31, 1995, and to perform such other
accounting services as may be appropriate. Prior to its merger with Ernst &
Whinney in 1989, the firm of Arthur Young & Company audited the accounts of the
Company annually since 1964.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting, and they will have the opportunity to make a statement if they desire
to do so. They will also be available to respond to appropriate questions from
shareholders.
OTHER MATTERS
Reports will be laid before the Annual Meeting, including a letter from the
Chairman of the Board and the President which accompanies the financial
statements of the Company and the Auditor's Report prepared by independent
auditors. The Board of Directors does not contemplate and does not intend to
present for consideration the taking of action by shareholders with respect to
any reports to be laid before the Annual Meeting or with respect to the minutes
of the Annual Meeting of Shareholders held on July 27, 1993, which will be read
at the Annual Meeting on July 26, 1994, unless a motion to dispense with a
reading is adopted.
15
<PAGE> 19
The Board of Directors of the Company is not aware of any matter to come
before the Annual Meeting other than those mentioned in the accompanying Notice.
However, if other matters shall properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying Proxy to vote in
accordance with their best judgment on such matters.
The cost of solicitation of Proxies, including the cost of preparing,
assembling and mailing the Notice, Proxy Statement and Proxy, will be borne by
the Company. In addition to solicitation by mail, arrangements may be made with
brokerage houses and other custodians, nominees and fiduciaries to send proxy
materials to their principals, and the Company may reimburse them for their
expenses in so doing. To the extent necessary to assure sufficient
representation, officers and employees of the Company may in person or by
telephone or telegram request the return of Proxies. The Company has also
retained D. F. King & Co. Inc., a professional proxy solicitation firm, to aid
in the solicitation of proxies for whose services the Company will pay a fee of
$4,500, plus reimbursement of out-of-pocket expenses.
Any shareholder proposal intended to be presented at the 1995 Annual
Meeting of Shareholders must be received by the Company's Secretary at the
Company's principal executive offices not later than February 10, 1995, for
inclusion in the Board of Directors' Proxy Statement and form of Proxy relating
to that Annual Meeting. Each proposal submitted should be accompanied by the
name and address of the shareholder submitting the proposal and the number of
Common Shares owned. If the proponent is not a shareholder of record, proof of
beneficial ownership should also be submitted. All proposals must be a proper
subject for action and comply with the proxy rules of the Securities and
Exchange Commission.
UPON THE RECEIPT OF A WRITTEN REQUEST FROM ANY SHAREHOLDER ENTITLED TO VOTE
AT THE FORTHCOMING ANNUAL MEETING, THE COMPANY WILL MAIL, AT NO CHARGE TO THE
SHAREHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, FOR THE COMPANY'S MOST RECENT FISCAL YEAR. REQUESTS FROM
BENEFICIAL OWNERS OF THE COMPANY'S VOTING SECURITIES MUST SET FORTH A GOOD-FAITH
REPRESENTATION THAT, AS OF THE RECORD DATE FOR THE ANNUAL MEETING, THE PERSON
MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF SECURITIES ENTITLED TO VOTE AT
SUCH ANNUAL MEETING. WRITTEN REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO:
Mr. John V. Goodger
Vice President, Treasurer and Assistant Secretary
Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience a
return envelope is enclosed requiring no additional postage if mailed in the
United States.
By Order of the Board of Directors.
WILLIAM A. PAPENBROCK
Secretary
June 10, 1994
16
<PAGE> 20
APPENDIX A
PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE
AMENDED ARTICLES OF INCORPORATION
OF
PIONEER-STANDARD ELECTRONICS, INC.
Article Fourth of the Amended Articles of Incorporation (which is the only
portion of the Amended Articles of Incorporation affected by Proposal 2) shall
be deleted and replaced by the following:
"FOURTH: The authorized number of shares of the corporation is Forty
Million (40,000,000) shares, all of which shall be Common Shares,
without par value."
A-1
<PAGE> 21
[INSERT MAP HERE]
SET FORTH ABOVE ARE MAPS TO THE SITE OF THE 1994 ANNUAL SHAREHOLDERS MEETING TO
BE HELD ON TUESDAY, JULY 26, 1994. THE MAPS INCLUDE MAJOR CLEVELAND AREA
LANDMARKS, MAJOR SURROUNDING ROADS AND HIGHWAYS, AND HOTELS AND OTHER LANDMARKS
IN THE NEARBY AREA.
<PAGE> 22
PIONEER-STANDARD ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JULY 26, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (i) appoints John V. Goodger and William A.
Papenbrock, and each of them, as Proxy holders and attorneys, with full
P power of substitution, to appear and vote all of the Common Shares of
Pioneer-Standard Electronics, Inc. which the undersigned shall be
R entitled to vote at the Annual Meeting of Shareholders of the Company,
to be held at the Cleveland South Hilton Inn, 6200 Quarry Lane,
O Cleveland, Ohio, on Tuesday, July 26, 1994, at 11:00 A.M., Eastern
Daylight Time, and at any adjournments thereof, hereby revoking any and
X all proxies heretofore given, and (ii) authorizes and directs said
Proxy holders to vote all of the Common Shares of the Company
Y represented by this Proxy as follows, WITH THE UNDERSTANDING THAT IF NO
DIRECTIONS ARE GIVEN BELOW, SAID SHARES WILL BE VOTED "FOR"
PROPOSALS 1 AND 2.
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Preston B. Heller, Jr., Arthur Rhein, and Thomas C. Sullivan. ---------------------------------
---------------------------------
---------------------------------
---------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 23
X PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Approval of an [ ] [ ] [ ] 3. In their discretion,
Directors amendment to to act on any other
(see reverse) the Amended matter or matters
Articles of which may properly
Incorporation to come before the
For, except vote withheld from the following increase the number of authorized meeting.
nominee(s): Common Shares of the Company from
20,000,000 Common Shares to 40,000,000 THE BOARD OF DIRECTORS
- - -------------------------------------------- Common Shares. RECOMMENDS A VOTE "FOR" PROPOSALS
1 AND 2.
</TABLE>
Change [ ]
of
Address
Attend [ ]
Meeting
SIGNATURE(S) DATE
------------------------------ -----------------------
SIGNATURE(S) DATE
------------------------------ -----------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
