<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:
/ / Preliminary proxy statement
/X/ 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-STANDARD ELECTRONICS, INC.
4800 EAST 131ST STREET / CLEVELAND, OHIO 44105
June 16, 1995
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 25, 1995
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 included 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 adopt the 1995 Stock Option Plan for Outside Directors.
These proposals are fully set forth in the accompanying Proxy Statement for your
information.
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, please sign, date and mail the
enclosed Proxy in the envelope provided, at your earliest convenience.
Thank you for your cooperation and continued support.
/s/ James L. Bayman /s/ Preston B. Heller, Jr.
James L. Bayman Preston B. Heller, Jr.
Chairman of the Board
President and Chief
Executive Officer
<PAGE> 3
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 25, 1995,
at 11:00 A.M., Eastern Daylight Time, for the following purposes:
1. To elect three (3) Class A 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 ratify, confirm and adopt the 1995 Stock Option Plan for Outside
Directors; 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, 1995 are
entitled to notice of the Annual Meeting and to vote thereat.
By Order of the Board of Directors.
William A. Papenbrock
Secretary
June 16, 1995
PLEASE SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
PIONEER-STANDARD ELECTRONICS, INC.
4800 EAST 131ST STREET / CLEVELAND, OHIO 44105
------------------
MAILED TO SHAREHOLDERS ON JUNE 16, 1995
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 25, 1995
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 25, 1995, 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, 1995, the date fixed for the determination of persons
entitled to vote, there were 14,933,771 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 represented by proxy and
entitled to vote will be elected Directors. However, the proposal to ratify,
confirm and adopt the 1995 Stock Option Plan for Outside Directors ("Proposal
2") must be approved by a majority of the voting power of the Company's Common
Shares. The withholding of a vote with respect to the election of any nominee
for Director or with respect to Proposal 2 will have the practical effect of a
vote against that nominee or Proposal 2. A broker non-vote with respect to any
share will not affect 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.
The Common Share information contained in this Proxy Statement reflects a
three-for-two share split effected in the form of a 50% share dividend declared
on June 23, 1994 and payable on August 1, 1994 to shareholders of record on July
6, 1994.
1
<PAGE> 5
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 A Directors are to be elected for a
three-year term ending at the Annual Meeting in 1998. The nominees for election
are Frederick A. Downey, Victor Gelb and Edwin Z. Singer, 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 can 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.
<TABLE>
NOMINEES FOR ELECTION
<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 A DIRECTORS
Frederick A. Downey(1)...... President, F.A. Downey Associates, Inc. 1983 67 1998
(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 Community
Bancorp, Inc.
Victor Gelb(1)(2)(3)........ President, Victor Gelb, Inc. 1971 68 1998
(Industrial Fibers); Chairman of the
Board, Capitol American Financial Corp.
(Insurance) until January, 1990;
Director, Specialty Chemical Resources,
Inc.
</TABLE>
2
<PAGE> 6
<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>
Edwin Z. Singer(1)(2)(3).... Chairman of the Board, Sandusco, Inc. 1974 64 1998
(Wholesale Merchandising, Real Estate);
Director, Star Bank, N.A., Cleveland
</TABLE>
DIRECTORS CONTINUING IN OFFICE
<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 B DIRECTORS
James L. Bayman............. President and Chief Executive Officer 1984 58 1996
of the Company
Gordon E. Heffern(3)........ Retired Chairman of the Board and Chief 1989 71 1996
Executive Officer, Society Corporation
and Society National Bank since 1987
and 1985, respectively (Banking);
Director, A. Schulman Inc.
Karl E. Ware(2)............. Chairman and Chief Executive Officer, 1988 68 1996
Ware Industries, Inc. (Metal Wire Forms
and Steel Components); Director, Acme-
Cleveland Corporation, Lesco, Inc., and
Lubrizol Corporation
CLASS C DIRECTORS
Preston B. Heller, Jr.(1)... Chairman of the Board of the Company; 1969 65 1997
Chief Executive Officer of the Company
until April, 1995; Director, National
City Bank (a subsidiary of National
City Corporation), and Sudbury, Inc.
Arthur Rhein................ Senior Vice President 1990 49 1997
Thomas C. Sullivan(1)(3).... Chairman of the Board and Chief 1984 57 1997
Executive Officer, RPM, Inc. (Specialty
Coatings and Membranes); Director,
National City Bank (a subsidiary of
National City Corporation), and Huffy
Corporation
<FN>
- - ---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
</TABLE>
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 two 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, reviews 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 recommendations concerning executive
officers' salaries and bonuses and employment agreements and the Company's stock
option plans. The Compensation Committee also reviews and makes recommendations
concerning Director compensation. The Board of Directors serves as the Company's
nominating committee.
The Board of Directors held six meetings during the fiscal year ended March
31, 1995. 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.
During the fiscal year ended March 31, 1995, 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 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 an annual fee of $2,000
in addition to any fees he received as a Committee member, and, as Chairman of
the Compensation Committee, Mr. Gelb received an annual fee of $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. On March 15, 1995, effective
for the fiscal year ended March 31, 1996, the Board of Directors (i) increased
the annual fee to be received by Directors who are not also employees of the
Company to $15,000 and (ii) established that the Chairman of each Committee of
the Board will receive an annual fee of $2,000. All other fees to be paid to
Directors will remain unchanged.
4
<PAGE> 8
<TABLE>
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 1995; all Directors and officers as a group; and the percent of
the class so owned as of June 1, 1995.
<CAPTION>
NUMBER OF
COMMON
SHARES
BENEFICIALLY PERCENT OF
NAME OWNED(1) CLASS
---- ------------ ----------
<S> <C> <C>
James L. Bayman................................................. 384,930 2.6%
Frederick A. Downey............................................. 2,250 *
Victor Gelb..................................................... 18,168 .1%
John V. Goodger................................................. 19,600(2) .1%
Gordon E. Heffern............................................... 5,265 *
Preston B. Heller, Jr. ......................................... 723,598(3) 4.8%
Janice M. Margheret............................................. 100,050(4) .7%
Arthur Rhein.................................................... 108,825(5) .7%
Edwin Z. Singer................................................. 54,387(6) .4%
Thomas C. Sullivan.............................................. 2,250 *
Karl E. Ware.................................................... 900 *
All Directors and officers as a Group (12 persons).............. 1,421,398(7) 9.4%
<FN>
- - ---------------
* 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 18,975 Common Shares which Mr. Goodger has the right to acquire
within 60 days of June 1, 1995 through the exercise of stock options granted
to him under the 1982 Incentive Stock Option Plan and the 1991 Stock Option
Plan.
(3) Includes 3,724 Common Shares held in a trust for which Mr. Heller serves as
co-trustee and shares voting and dispositive power and 22,500 Common Shares
held in a trust for which Mr. Heller serves as trustee and has sole voting
and dispositive power.
(4) Includes 99,825 Common Shares which Ms. Margheret has the right to acquire
within 60 days of June 1, 1995 through the exercise of stock options granted
to her under the 1982 Incentive Stock Option Plan and the 1991 Stock Option
Plan.
(5) Includes 104,325 Common Shares which Mr. Rhein has the right to acquire
within 60 days of June 1, 1995, through the exercise of stock options
granted to him under the 1982 Incentive Stock Option Plan and the 1991 Stock
Option Plan.
(6) Includes 45,000 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 223,125 Common Shares which such
persons have the right to acquire within 60 days of June 1, 1995 through the
exercise of stock options granted to them under the 1982 Incentive Stock
Option Plan and the 1991 Stock Option Plan.
</TABLE>
5
<PAGE> 9
<TABLE>
The following table sets forth information as of June 1, 1995 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:
<CAPTION>
NUMBER OF COMMON
NAME AND ADDRESS OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
------------------- ---------------------- ---------------
<S> <C> <C>
FMR Corp.
82 Devonshire Street 1,658,469(1) 11.1%
Boston, Massachusetts 02109
<FN>
- - ---------------
(1) According to a Schedule 13G, dated February 13, 1995, furnished to the
Company, FMR Corp. and Edward C. Johnson 3d each has the sole power to vote
or to direct the vote of 77,375 Common Shares and sole power to dispose of
or direct the disposition of all 1,658,469 Common Shares. Neither FMR Corp.
nor Edward C. Johnson 3d has the sole power to vote or to direct the vote of
1,581,094 Common Shares.
</TABLE>
6
<PAGE> 10
<TABLE>
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, 1995, 1994 and 1993, of all those persons who were at
March 31, 1995, (i) the Chief Executive Officer, and (ii) the other four most
highly compensated executive officers of the Company (the "Named Executives"):
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPEN-
ANNUAL SATION
COMPENSATION AWARDS
----------------------------------------------- ----------
OTHER
ANNUAL SECURITIES ALL OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) OPTIONS SATION(2)
- - ------------------------- ----- -------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Preston B. Heller, Jr.(3) 1995 $210,000 $424,864 $ -- -- $ 57,849
Chairman of the 1994 210,000 312,639 -- -- 62,144
Board and Chief 1993 150,000 168,850 -- -- 57,953
Executive Officer
James L. Bayman(3) 1995 250,000 485,559 -- -- 45,296
President and Chief 1994 250,000 357,301 -- -- 47,401
Operating Officer 1993 190,000 192,972 -- -- 43,669
Arthur Rhein 1995 200,000 394,517 -- 14,400 12,124
Senior Vice President 1994 200,000 290,307 -- 75,000 15,530
1993 140,000 156,790 -- -- 11,048
Janice M. Margheret 1995 185,000 303,475 -- 14,400 12,495
Senior Vice President 1994 185,000 223,313 -- 75,000 13,520
1993 125,000 96,486 -- -- 9,916
John V. Goodger 1995 130,000 91,042 -- 9,000 9,320
Vice President, 1994 125,000 66,994 -- 22,500 8,643
Treasurer and Assistant 1993 112,500 36,182 -- -- 5,668
Secretary
<FN>
- - ---------------
(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) Consists of (i) contributions by the Company on behalf of the Named
Executives to the Pioneer-Standard Electronics, Inc. Employees' Profit
Sharing Retirement Plan, which during fiscal 1995 were as follows: Preston
B. Heller, Jr. $9,961; James L. Bayman $9,911; Arthur Rhein $9,301; Janice
M. Margheret $10,648; and John V. Goodger $9,320 and (ii) premiums paid for
split dollar life insurance by the Company during fiscal 1995 as follows:
Preston B. Heller, Jr. $47,888; James L. Bayman $35,385; Arthur Rhein
$2,823; and Janice M. Margheret $1,847. Premiums paid for split dollar life
insurance by the Company during fiscal 1994 were as follows: Preston B.
Heller, Jr. $48,152; James L. Bayman $35,444; Arthur Rhein $2,829; and
Janice M. Margheret $1,845 and during fiscal 1993 were as follows: Preston
B. Heller, Jr. $48,538; James L. Bayman $35,591; Arthur Rhein $2,834; and
Janice M. Margheret $1,846.
(3) As of April 3, 1995, Preston B. Heller, Jr. serves as Chairman of the Board
and James L. Bayman serves as President and Chief Executive Officer.
</TABLE>
7
<PAGE> 11
<TABLE>
OPTION GRANTS, EXERCISES AND YEAR-END VALUES
The following table sets forth information regarding grants of stock
options to the Named Executives under the 1991 Stock Option Plan during the
fiscal year ended March 31, 1995. The options were granted at the fair market
value on the date of grant for a term of ten (10) years.
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION
- - --------------------------------------------------------------------------------- FOR OPTION TERM (10 YEARS)(3)
% OF TOTAL -------------------------------------
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE 5% 10%
UNDERLYING EMPLOYEES OR BASE ----------------------- ---------
OPTIONS IN FISCAL PRICE EXPIRATION PRICE PER AGGREGATE PRICE PER
NAME GRANTED YEAR ($/SHARE) DATE SHARE VALUE SHARE
---- --------- ---------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Preston B. Heller,
Jr.................... -- -- -- -- -- -- --
James L. Bayman......... -- -- -- -- -- -- --
Arthur Rhein............ 14,400(1) 3.3% $ 17.00 4/21/04 $ 27.69 $153,936 $ 44.09
Janice M. Margheret..... 14,400(1) 3.3% 17.00 4/21/04 27.69 153,936 44.09
John V. Goodger......... 9,000(2) 2.1% 17.00 4/21/04 27.69 96,210 44.09
<CAPTION>
- - ------------------------
AGGREGATE
NAME VALUE
---- ---------
<S> <C>
Preston B. Heller,
Jr.................... --
James L. Bayman......... --
Arthur Rhein............ $390,096
Janice M. Margheret..... 390,096
John V. Goodger......... 243,810
<FN>
- - ---------------
(1) Option shares become exercisable on the anniversary date of the date of
grant as follows: 2,640 shares in 2002, 5,880 shares in 2003 and 5,880
shares in 2004.
(2) Option shares become exercisable as follows: 1,800 shares on the date of
grant and 1,800 on the anniversary date of grant thereafter.
(3) Realizable aggregate 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.
</TABLE>
<TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<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............. -- -- -- -- -- --
Arthur Rhein................ -- -- 98,325 91,200 $ 1,321,627 $ 720,949
Janice M. Margheret......... -- -- 93,825 91,200 1,258,967 720,949
John V. Goodger............. -- -- 13,425 25,950 131,903 179,306
<FN>
- - ---------------
(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, 1995 ($18.25).
</TABLE>
8
<PAGE> 12
EMPLOYMENT AGREEMENTS
As authorized by the Compensation Committee on April 25, 1995, on June 12,
1995, effective as of April 3, 1995, the Company entered into new Amended and
Restated Employment Agreements with Preston B. Heller, Jr., James L. Bayman,
Arthur Rhein, Janice M. Margheret and John V. Goodger (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 $250,000 for Mr. Bayman, $200,000 for Mr. Rhein, $185,000 for Ms.
Margheret and $130,000 for Mr. Goodger. Mr. Heller's new Employment Agreement
reflects a $90,000 increase in his annual base salary from $210,000 to $300,000,
but he will no longer be eligible to receive a cash incentive bonus. The
Employment Agreements for Messrs. Bayman, Rhein, Goodger and Ms. Margheret
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. Bayman, Mr. Rhein, Ms. Margheret and Mr. Goodger receive annual
cash incentive bonuses in an amount equal to 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. The new Employment Agreements of all of the
officers, except Mr. Heller, were changed only to reflect Mr. Heller's change in
position from Chairman of the Board and Chief Executive Officer to Chairman of
the Board and Mr. Bayman's change in position from President and Chief Operating
Officer to President and Chief Executive Officer.
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 occurs. Each officer also will be entitled to receive 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. Messrs. Bayman, Rhein and Goodger and
Ms. Margheret additionally will receive 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 Mr. 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,
Messrs. Bayman, Rhein and Goodger and Ms. Margheret also will be entitled to
receive his or her vested bonus payable in accordance with certain provisions of
the Employment Agreements.
In the event of termination in connection with a change in control, all of
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,
if any, payable in one payment immediately upon such termination. Messrs.
Bayman, Rhein and Goodger and Ms. Margheret also will be entitled to receive his
or her vested bonus payable in accordance with certain provisions of the
Employment Agreements. For two years following such termination, each 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)
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<PAGE> 13
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.
Termination for disability will result in continued payment of the
officer's then base salary. Mr. Bayman, Mr. Rhein, Mr. Goodger and Ms. Margheret
also will receive a payment equal to their respective bonus for a maximum period
of six months in the case of Mr. Bayman, or three months, in the case of Mr.
Rhein, Ms. Margheret and Mr. Goodger, following which they will receive
disability benefits under the Company's long term disability program. Messrs.
Bayman, Goodger and Rhein and Ms. Margheret 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 officer, no further remuneration payments will be due him or her.
CERTAIN TRANSACTIONS
During the fiscal year ended March 31, 1995, the Company paid an aggregate
of $421,138 for office furnishings to a company controlled by the wife of James
L. Bayman, President, Chief Executive Officer and a Director of the Company.
While the transactions were fair and reasonable from a commercial standpoint,
the Company and Mrs. Bayman have agreed to terminate their business relationship
as of the beginning of the current 1996 fiscal year.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
GENERAL
The Company's Compensation Committee is comprised of four (4) non-employee
Directors of the Company. The Compensation Committee is responsible for
reviewing and implementing the Company's existing and proposed executive and
director 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 1995 fiscal year of Mr. Preston B. Heller, the former 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 1995, were the
Company's most highly compensated 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.
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<PAGE> 14
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 both comparable to similarly situated
companies, specifically, Arrow Electronics, Inc., Avnet, Inc., Bell Industries,
Inc., Jaco Electronics, Inc., Kent Electronics Corporation, Marshall Industries,
Milgray Electronics, Inc., Sterling Electronics Corporation, and Wyle
Electronics, and commensurate with the performance, experience, and
responsibilities of each executive. Cash incentive bonuses are awarded to
certain 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 or to
increase their 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 electronics
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
Section 162(m) of the Internal Revenue Code of 1986, as amended, provides that
no tax deduction is allowed for remuneration paid by the Company to any Named
Executive 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 1995 COMPENSATION DECISIONS
Salaries. On April 22, 1994, Mr. Heller, the Company's then Chief Executive
Officer, recommended to the Compensation Committee that there be no change in
the salaries of $250,000, $200,000, and $185,000 for Mr. Bayman, Mr. Rhein, and
Ms. Margheret, respectively, but that Mr. Goodger's salary be increased by
$5,000 to $130,000. In determining whether to make any salary adjustments for
fiscal 1995, consideration was given to the payment of anticipated bonuses, the
performance and responsibilities of each executive, prior years' salary
increases, and the levels of compensation of similarly situated companies,
specifically, Arrow Electronics, Inc., Avnet, Inc., Bell Industries, Inc., Jaco
Electronics, Inc., Kent Electronics Corporation, Marshall Industries, Milgray
Electronics, Inc., Sterling Electronics Corporation and Wyle Electronics. The
Compensation Committee strives to provide its executives with salaries at a
competitive median in comparison to such similarly situated companies. The
Compensation Committee's decisions with respect to fiscal year 1995 salaries
primarily were based on Mr. Heller's recommendations, which were accepted.
Annual Incentive Compensation. Annual incentive compensation was 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 22, 1994, the
Compensation Committee approved the future payment of cash incentive bonuses for
the fiscal year ending March 31, 1995, 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 1995
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
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<PAGE> 15
31, 1995 fiscal year, Mr. Heller received a cash incentive bonus of $424,864,
Mr. Bayman received a cash incentive bonus of $485,559, Mr. Rhein received a
cash incentive bonus of $394,517, Ms. Margheret received a cash incentive bonus
of $303,475 and Mr. Goodger received a cash incentive bonus of $91,042.
Stock Options. On April 22, 1994, Mr. Heller presented a proposal to the
Compensation Committee that it authorize the grant of options of 14,400 Common
Shares to Ms. Margheret, 14,400 Common Shares to Mr. Rhein and 9,000 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 Compensation Committee's decision with respect to the grant of
stock options primarily 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 $17.00, which was the last
sales price of Common Shares on April 22, 1994.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Heller included in his April 22, 1994 executive salary recommendations
a proposal not to increase his current salary of $210,000, which was adopted by
the Compensation Committee. Mr. Heller received the $424,864 cash incentive
bonus for fiscal year 1995 as described above.
ADDITIONAL MATTERS
On March 15, 1995, the Board of Directors, at the recommendation of the
Compensation Committee, effective April 3, 1995, elected Mr. Bayman as Chief
Executive Officer of the Company. Mr. Bayman also will continue as President,
and, effective April 3, 1995, Mr. Heller will continue as Chairman of the Board
of Directors with reduced executive responsibilities. The Compensation Committee
increased Mr. Heller's salary from $210,000 to $300,000 and eliminated his
participation in the cash incentive bonus program. The salaries of the other
executive officers for fiscal 1996 were not increased. 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 March 15, 1995, to
non-officer employees to purchase 209,000 Common Shares at $19.25 per share. At
the meeting, the Compensation Committee also recommended the adoption of a
50,000 Common Share Stock Option Plan for non-employee Outside Directors, which
was approved by the Board of Directors subject to Shareholder approval at the
1995 Annual Meeting of Shareholders. Finally, the Compensation Committee
authorized an increase in annual Director fees to $15,000, a $1,000 fee for
Board and Committee Meetings attended, and an annual $2,000 fee for the Chairman
of both the Audit and Compensation Committees of the Board.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Victor Gelb (Chairman)
Gordon E. Heffern
Edwin Z. Singer
Thomas C. Sullivan
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<PAGE> 16
<TABLE>
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, 1990 through March 31,
1995.
<CAPTION>
Measurement Period Pioneer-Stan- S&P 500 In-
(Fiscal Year Covered) dard dex Peer Group
<S> <C> <C> <C>
1990 $100 $100 $100
1991 139 114 102
1992 117 127 120
1993 268 146 164
1994 361 149 168
1995 438 172 189
</TABLE>
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<PAGE> 17
PROPOSAL NO. 2
PROPOSAL TO RATIFY THE 1995 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
At the Annual Meeting, shareholders will be asked to approve a proposal to
ratify, confirm and adopt the 1995 Stock Option Plan for Outside Directors (the
"Plan"), which provides for the granting of options to purchase the Company's
Common Shares to eligible Directors of the Company.
GENERAL
On April 25, 1995, the Board of Directors adopted the Plan, providing for
the granting of options to purchase no more than 50,000 Common Shares to those
Directors of the Company who are not employees of the Company or of any of its
subsidiaries or affiliates ("Outside Directors"). All options granted under the
Plan will be nonqualified stock options for federal income tax purposes.
The following summary of the Plan is not intended to be complete as
qualified in its entirety by reference to the Plan, which is set forth as
Appendix A to this Proxy Statement.
PURPOSE OF THE PLAN
The purpose of the Plan is to provide additional incentive to the Company's
Outside Directors by encouraging them to acquire a new or an additional share
ownership in the Company, thus increasing their proprietary interest in the
Company's business and providing them with an increased personal interest in the
Company's continued success and progress.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Compensation Committee. However, since the
Plan provides for the automatic granting of options to Outside Directors, the
Compensation Committee's role in administering the Plan is purely ministerial
and does not involve discretion with respect to the identity of persons to whom
options are to be granted or the number of options to be granted to any
individual.
DIRECTORS ELIGIBLE FOR THE PLAN
Only Outside Directors of Pioneer-Standard Electronics, Inc. are eligible
to participate in the Plan.
SHARES SUBJECT TO THE PLAN
The shares to be issued upon exercise of options granted under the Plan
will be Common Shares, without par value, of the Company. Either treasury or
authorized and unissued Common Shares, or both, as the Board of Directors shall
from time to time determine, may be so issued. Common Shares which are the
subject of any lapsed, expired or terminated options may be made available for
reoffering under the Plan.
The aggregate number of Common Shares for which options may be granted
under the Plan will be 50,000. However, in the event that subsequent to the date
of adoption of the Plan by the Board of Directors, the outstanding Common Shares
should be increased or decreased or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation, as a result of a stock split, stock dividend, combination
or exchange of shares, exchange for other securities, reclassification,
reorganization, redesignation, merger, consolidation, recapitalization or other
such change,
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<PAGE> 18
then (i) there shall automatically be substituted for each Common Share subject
to an unexercised option (in whole or in part) granted under the Plan, the
number and kind of shares of stock or other securities into which each
outstanding Common Share shall be changed or for which each such Common Share
shall be exchanged, (ii) the option price per Common Share or unit of securities
shall be increased or decreased proportionately so that the aggregate purchase
price for the securities subject to the option shall remain the same as
immediately prior to such event, and (iii) the Board shall make such other
adjustments as may be appropriate and equitable.
GRANT OF OPTIONS
Subject to the approval of the Plan by the shareholders, options will be
granted to each Outside Director for the purchase of a maximum of 5,000 Common
Shares by each such Director. The Directors currently eligible to receive
options under the Plan are Messrs. Sullivan, Downey, Gelb, Singer, Heffern and
Ware.
OPTION PROVISIONS
Option Price. The option price per Common Share under the Plan will be
equal to the fair market value of a share on the date the options are granted.
The market value of a share of Common Stock on April 25, 1995 was $19.50.
Period of Option. Each option granted under the Plan will be exercisable
for a period of ten (10) years from the date of grant and 1,000 Common Shares
will be exercisable during the first year of said period. Thereafter, during
each succeeding year each option may be exercised for up to a maximum of twenty
percent (20%) of the total number of shares subject to the option, which annual
rights of exercise will be cumulative.
Limitation On Exercise and Transfer of Options. Only the Director to whom
the option is granted may exercise the same, except where a guardian or other
legal representative has been appointed for such Director and except as
discussed below in the case of such Director's death. No option granted under
the Plan will be transferable otherwise than by the Last Will and Testament of
the Director to whom it is granted or, if the Director dies intestate, by the
applicable laws of descent and distribution. No option granted under the Plan
may be pledged or hypothecated, nor will any such option be subject to
execution, attachment or similar process.
Exercise of Option. Each option granted under the Plan may be exercised in
whole or in part (to the maximum extent then exercisable) from time to time
during the option period, but this right of exercise will be limited to whole
shares. Options may be exercised by the optionee giving written notice to the
Company of intention to exercise the same accompanied by full payment of the
purchase price in cash or in whole or in part in Common Shares having a fair
market value on the date the option is exercised equal to that portion of the
purchase price for which payment in cash is not made.
Termination of Directorship. If the optionee ceases to be a Director of the
Company, the optionee's option will terminate on the effective date of
termination of his or her directorship and neither the optionee nor any other
person will have any right after such date to exercise all or any part of the
option. If, however, the termination of the optionee's directorship is due to
death, then the option may be exercised within twelve (12) months after his or
her death by the optionee's estate or by the person designated in the optionee's
Last Will and Testament or to whom transferred by the applicable laws of descent
and distribution. Notwithstanding the foregoing, in no event will any option be
exercisable after the expiration of the option period and not to any greater
extent than the optionee would have been entitled to exercise the option at the
time of death.
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<PAGE> 19
TERMINATION OF THE PLAN
The Plan will terminate ten (10) years from the date of its adoption by the
Board of Directors of the Company and thereafter no options may be granted under
the Plan. All options outstanding at the time of such termination will continue
in full force and effect in accordance with and subject to their terms and the
terms and conditions of the Plan.
FEDERAL INCOME TAX CONSEQUENCES
All of the options granted under the Plan will be nonqualified stock
options for Federal income tax purposes. Accordingly, an optionee will not
realize income upon the granting of such an option; however, in any year in
which an optionee who is not an officer, Director or owner of 10% or more of the
Company's Common Shares, exercises a part or all of such option, the excess, if
any, of the fair market value of the shares at the date of exercise over the
option price will be taxed as compensation at ordinary income tax rates, and the
Company will be entitled to a tax deduction for a like amount in the same year,
provided it complies with applicable requirements. When an optionee who is an
officer, Director or owner of 10% or more of the Company's Common Shares,
exercises a part or all of such an option, the optionee will not realize income
at the time of exercise unless he or she makes the election discussed
hereinafter, but the excess, if any, of the fair market value of the shares on
the date six months after the date of exercise over the option price will be
taxed at ordinary income tax rates at that time, and the Company will be
entitled to a tax deduction for a like amount, provided it complies with
applicable requirements. The optionee may elect, within 30 days after issuance
of shares upon exercise of the option (which the Internal Revenue Service may
assert occurs on the date of exercise), to treat the excess, if any, of the fair
market value of the shares on the date of issuance over the option price as
ordinary income at that time, and the Company will be entitled to a tax
deduction for a like amount. If this election is made, no additional income will
be realized by the optionee on the date six months after the date of issuance.
RECOMMENDATION; REQUIRED VOTE
The Board of Directors recommends a vote FOR the 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 shares
representing a majority of the total number of Common Shares of the Company is
required for the adoption of the proposal to ratify, confirm and adopt the Plan.
INDEPENDENT AUDITORS
The Board of Directors plans on selecting, at the next Board of Directors
meeting to be held in July, 1995, Ernst & Young to audit the accounts of the
Company for the fiscal year ending March 31, 1996, and to perform such other
accounting services as may be appropriate. Ernst & Young and its predecessors
have 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.
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<PAGE> 20
OTHER MATTERS
Reports will be laid before the Annual Meeting, including a letter from the
Chairman of the Board and the President and Chief Executive Officer 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
26, 1994, which will be read at the Annual Meeting on July 25, 1995, unless a
motion to dispense with a reading is adopted.
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 1996 Annual
Meeting of Shareholders must be received by the Company's Secretary at the
Company's principal executive offices not later than February 9, 1996, 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
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<PAGE> 21
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 16, 1995
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<PAGE> 22
APPENDIX A
1995 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
Pioneer-Standard Electronics, Inc., hereinafter called the "Company,"
hereby adopts a stock option plan for eligible directors of the Company pursuant
to the following terms and provisions:
1. PURPOSE OF THE PLAN. The purpose of this plan, hereinafter called the
"Plan," is to provide additional incentive to those directors of the Company who
are not employees of the Company or any of its subsidiaries or affiliates by
encouraging them to acquire a new or an additional share ownership in the
Company, thus increasing their proprietary interest in the Company's business
and providing them with an increased personal interest in the Company's
continued success and progress. These objectives will be promoted through the
grant of options to acquire the Company's Common Shares, without par value (the
"Common Shares"), pursuant to the terms of the Plan. Only those directors who
meet the qualifications stated above are eligible for and shall receive options
under this Plan.
2. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective upon
adoption by the Board of Directors on April 25, 1995, subject to approval by
holders of a majority of the outstanding shares of voting capital stock of the
Company. In the event the Plan is not so approved within twelve (12) months
after the date the Plan is adopted by the Board of Directors, the Plan and the
options granted hereunder shall be null and void.
3. SHARES SUBJECT TO THE PLAN. The shares to be issued upon the exercise
of the options granted under the Plan shall be Common Shares of the Company.
Either treasury or authorized and unissued Common Shares, or both, as the Board
of Directors shall from time to time determine, may be so issued. Common Shares
which are subject of any lapsed, expired or terminated options may be made
available for reoffering under the Plan. If an option granted under this Plan is
exercised pursuant to the terms and conditions of subsection 5(b), any Common
Shares which are the subject thereof shall not thereafter be available for
reoffering under the Plan.
Subject to the provisions of the next succeeding paragraph of this Section
3, the aggregate number of Common Shares for which options may be granted under
the Plan shall be fifty thousand (50,000) Common Shares.
In the event the date of adoption of the Plan by the Board of Directors the
Common Shares should, as a result of a stock split, stock dividend, combination
or exchange of shares, exchange for other securities, reclassification,
reorganization, redesignation, merger, consolidation, recapitalization or other
such change, be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation, then (i) there shall automatically be substituted for
each Common Share subject to an unexercised option (in whole or in part) granted
under the Plan and each Common Share made available for grant to each eligible
Director pursuant to Section 4 hereof, the number and kind of shares of stock or
other securities into which each outstanding Common Share shall be changed or
for which each such Common Share shall be exchanged, (ii) the option price per
Common Share or unit of securities shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to the option shall remain the same as immediately prior to such event, and
(iii) the Board shall make such other adjustments as may be appropriate and
equitable to prevent enlargement or dilution of option rights. Any such
adjustment may provide for the elimination of fractional shares.
A-1
<PAGE> 23
4. GRANT OF OPTIONS. Subject to the terms of the Plan, and effective upon
its adoption by the Board of Directors, options shall be granted to each
eligible director for the purchase of a maximum of five thousand (5,000) Common
Shares by each such director at an option price per share equal to the fair
market value of a Common Share of the Company on the date said options are
granted. Thereafter, options for the purchase of five thousand (5,000) Common
Shares shall be granted to each newly elected eligible director immediately upon
his or her election to the Board of Directors. Each such option granted shall be
exercisable for a period of ten (10) years from the date of grant. One thousand
(1,000) Common Shares shall be exercisable during the first year of said period.
Thereafter, during each succeeding year each such option may be exercised for up
to a maximum of twenty percent (20%) of the total number of shares subject to
the option, which annual rights of exercise shall be cumulative.
5. OPTION PROVISIONS.
(a) Limitation on Exercise and Transfer of Options. Only the director
to whom the option is granted may exercise the same except where a guardian
or other legal representative has been duly appointed for such director and
except as otherwise provided in the case of such director's death. No
option granted hereunder shall be transferable otherwise than by the Last
Will and Testament of the director to whom it is granted or, if the
director dies intestate, by the applicable laws of descent and
distribution. No option granted hereunder may be pledged or hypothecated,
nor shall any such option be subject to execution, attachment or similar
process.
(b) Exercise of Option. Each option granted hereunder may be
exercised in whole or in part (to the maximum extent then exercisable) from
time to time during the option period, but this right of exercise shall be
limited to whole shares. Options shall be exercised by the optionee giving
written notice to the Secretary or the Vice President, Treasurer and
Assistant Secretary of the Company at its principal business office, by
certified mail, return receipt requested, of intention to exercise the same
and the number of Common Shares with respect to which the Option is being
exercised (the "Notice of Exercise of Option") accompanied by full payment
of the purchase price in cash or in whole or in part in Common Shares
having a fair market value on the date before the option is exercised equal
to that portion of the purchase price for which payment in cash is not
made. Such Notice of Exercise of Option shall be deemed delivered upon
deposit into the mails.
(c) Termination of Directorship. If the optionee ceases to be a
director of the Company, his or her option shall terminate on the effective
date of termination of his or her directorship and neither he or she nor
any other person shall have any right after such date to exercise all or
any part of such option. If, however, the termination of the directorship
is due to death, then the option may be exercised within twelve (12) months
after the optionee's death by the optionee's estate or by the person
designated in the optionee's Last Will and Testament or to whom transferred
by the applicable laws of descent and distribution. Notwithstanding the
foregoing, in no event shall any option be exercisable after the expiration
of the option period and not to any greater extent than the optionee would
have been entitled to exercise the option at the time of death.
(d) Acceleration of Exercise of Options in Certain Events.
Notwithstanding anything in the foregoing to the contrary, in the event
of a "change in control" the eligible director shall have the immediate
right and option (notwithstanding the provisions of paragraph 4 hereof)
to exercise the option with respect to all Common Shares covered by the
option, which exercise, if made, shall be irrevocable. The term "change
in control" shall include, but not be limited to: (i) the first purchase of
shares pursuant
A-2
<PAGE> 24
to a tender offer or exchange (other than a tender offer or exchange by the
Company) for all or part of the Company's common shares of any class or any
securities convertible into such common shares; (ii) the receipt by the
Company of a Schedule 13D or other advice indicating that a person is the
"beneficial owner" (as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of twenty percent (20%) or more of the
Company's shares of capital stock calculated as provided in paragraph (d)
of said Rule 13d-3, other than a person who was the beneficial owner of
such percentage of the Company's capital stock on the date of adoption of
the Plan by the Board of Directors; (iii) the date of approval by
shareholders of the Company of an agreement providing for any consolidation
or merger of the Company in which the Company will not be the continuing or
surviving corporation or pursuant to which shares of capital stock, of any
class or any securities convertible into such capital stock, of the Company
would be converted into cash, securities, or other property, other than a
merger of the Company in which the holders of shares of all classes of the
Company's capital stock immediately prior to the merger would have the same
proportion of ownership of common stock of the surviving corporation
immediately after the merger; (iv) the date of the approval by shareholders
of the Company of any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company; or (v) the adoption of any plan or
proposal for the liquidation (but not a partial liquidation) or dissolution
of the Company.
(e) Option Agreements. Options granted under the Plan shall be
subject to the further terms and provisions of an Option Agreement, a copy
of which is attached hereto as Exhibit 1, the execution of which by each
optionee shall be a condition to the receipt of an option.
6. INVESTMENT REPRESENTATION, APPROVALS AND LISTING. The options to be
granted hereunder shall be further conditioned upon receipt of the following
investment representation from the optionee:
"I further agree that any Common Shares of Pioneer-Standard
Electronics, Inc., which I may acquire by virtue of this option shall be
acquired for investment purposes only and not with a view to distribution
or resale; provided, however, that this restriction shall become
inoperative in the event the said Common Shares subject to this option
shall be registered under the Securities Act of 1933, as amended, or in the
event there is presented to Pioneer-Standard Electronics, Inc. an opinion
of counsel satisfactory to Pioneer-Standard Electronics, Inc., to the
effect that the offer or sale of the Common Shares subject to this option
may lawfully be made without registration under the Securities Act of 1933,
as amended."
The Company shall not be required to issue any certificate or certificates
for Common Shares upon the exercise of an option granted under the Plan prior to
(i) the obtaining of any approval from any governmental agency which the Company
shall, in its sole discretion, determine to be necessary or advisable, (ii) the
admission of such Common Shares to listing on any national securities exchange
on which the Common Shares may be listed, (iii) the completion of any
registration or other qualification of the Common Shares under any state or
federal law or ruling or regulations of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or advisable or the
determination by the Company, in its sole discretion, that any registration or
other qualification of the Common Shares is not necessary or advisable and (iv)
the obtaining of an investment representation from the optionee in the form
stated above or in such other form as the Company, in its sole discretion, shall
determine to be adequate.
7. GENERAL PROVISIONS. For all purposes of this Plan the fair market value
of a Common Share shall be determined as follows: so long as the Common Shares
of the Company are listed upon an established stock exchange or exchanges or on
the Nasdaq National Market System such fair market value shall be determined
A-3
<PAGE> 25
to be the highest closing price of such Common Shares on such stock exchange or
exchanges or on such market system on the day the option is granted (or the day
before the Common Shares are tendered as payment, in the case of determining
fair market value for that purpose) or if no sale of such Common Shares shall
have been made on any stock exchange on that day, then on the next preceding day
on which there was a sale of such Common Shares; and during any period of time
as such Common Shares are not listed upon an established stock exchange or the
Nasdaq National Market System the fair market value per share shall be the last
sales price of such Common Shares in the over-the-counter market on the day the
option is granted (or the day before the shares are tendered as payment, in the
case of determining fair market value for that purpose), as reported by the
National Association of Securities Dealers, Inc.
The liability of the Company under the Plan and any distribution of Common
Shares made hereunder is limited to the obligations set forth herein with
respect to such distribution and no term or provision of the Plan shall be
construed to impose any liability on the Company in favor of any person with
respect to any loss, cost or expense which the person may incur in connection
with or arising out of any transaction in connection with the Plan, including,
but not limited to, any liability to any Federal, state, or local tax authority
and/or any securities regulatory authority.
Nothing in the Plan or in any option agreement shall confer upon any
optionee any right to continue as a director of the Company, or to be entitled
to any remuneration or benefits not set forth in the Plan or such option.
Nothing contained in the Plan or in any option agreement shall be construed
as entitling any optionee to any rights of a shareholder as a result of the
grant of an option until such time as Common Shares are actually issued to such
optionee pursuant to the exercise of an option.
The Plan may be assumed by the successors and assigns of the Company.
The cash proceeds received by the Company from the issuance of Common
Shares pursuant to the Plan will be used for general corporate purposes or in
such other manner as the Board of Directors deems appropriate.
The expense of administering the Plan shall be borne by the Company.
The captions and section numbers appearing in the Plan are inserted only as
a matter of convenience. They do not define, limit, construe or describe the
scope or intent of the provisions of the Plan.
8. TERMINATION OF THE PLAN. The Plan shall terminate ten years from the
date of its adoption by the Board of Directors of the Company and thereafter no
options shall be granted hereunder. All options outstanding at the time of
termination of the Plan shall continue in full force and effect in accordance
with and subject to their terms and the terms and conditions of the Plan.
9. TAXES. Appropriate provisions shall be made for all taxes required to
be withheld and/or paid in connection with the Options or the exercise thereof,
and the transfer of Common Shares pursuant thereto, under the applicable laws or
other regulations of any governmental authority, whether federal, state, or
local and whether domestic or foreign.
10. VENUE. The venue of any claim brought hereunder by an eligible
Director shall be Cleveland, Ohio.
11. CHANGES IN GOVERNING RULES AND REGULATIONS. All references herein to
the Internal Revenue Code of 1986, as amended, or sections thereof, or to rules
and regulations of the Department of Treasury or of the
A-4
<PAGE> 26
Securities and Exchange Commission, shall mean and include the Code sections
thereof and such rules and regulations as are now in effect or as they may be
subsequently amended, modified, substituted or superseded.
IN WITNESS WHEREOF, PIONEER-STANDARD ELECTRONICS, INC., by its appropriate
officers duly authorized, has executed this instrument this 25th day of April,
1995.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ JAMES L. BAYMAN
Its: President and Chief Executive Officer
A-5
<PAGE> 27
[INSERT MAP HERE]
SET FORTH ABOVE ARE MAPS TO THE SITE OF THE 1995 ANNUAL SHAREHOLDERS MEETING TO
BE HELD ON TUESDAY, JULY 25, 1995. THE MAPS INCLUDE MAJOR CLEVELAND AREA
LANDMARKS, INCLUDING SURROUNDING ROADS, HIGHWAYS, HOTELS AND OTHER LANDMARKS IN
THE NEARBY AREA.
<PAGE> 28
PIONEER-STANDARD ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JULY 25, 1995
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,
P with full power of substitution, to appear and vote all of the Common
Shares of Pioneer-Standard Electronics, Inc. which the undersigned
R shall be entitled to vote at the Annual Meeting of Shareholders of the
Company, to be held at the Cleveland South Hilton Inn, 6200 Quarry
O Lane, Cleveland, Ohio, on Tuesday, July 25, 1995, at 11:00 A.M.,
Eastern Daylight Time, and at any adjournments thereof, hereby
X revoking any and all proxies heretofore given, and (ii) authorizes and
directs said Proxy holders to vote all of the X O Common Shares of the
Y Company 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)
Frederick A. Downey, Victor Gelb and Edwin Z. Singer. ------------------------------------
------------------------------------
------------------------------------
------------------------------------
(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
- - --------------------------------------------------------------------------------
DETACH CARD
PLEASE DETACH THE ABOVE PROXY CARD AND
RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 29
<TABLE>
<S> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Ratify, confirm / / / / / / 3. In their discretion,
Directors and adopt the to act on any other
(see reverse) 1995 Stock matter or matters
Option Plan which may properly
for Outside come before the
Directors. meeting.
For, except vote withheld from the following nominee(s):
-------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD
</TABLE>
