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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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PIONEER-STANDARD ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Ohio
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
34-0907152
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
4800 East 131st Street
Cleveland, Ohio 44105
(216) 587-3600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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James L. Bayman
President and Chief Executive Officer
4800 East 131st Street
Cleveland, Ohio 44105
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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COPIES TO:
William A. Papenbrock, Esq.
Calfee, Halter & Griswold
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
(216) 622-8200
Wilbur C. Delp, Jr., Esq.
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
(312) 853-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the statement number
of the earlier effective registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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<TABLE>
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<CAPTION>
<S> <C> <C>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED PRICE(1) REGISTRATION FEE(1)
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Debt Securities........................................... $200,000,000 $68,966
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Common Shares, without par value(2).......................
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes Rights to purchase Common Shares under the Company's Shareholder
Rights Plan and such presently undetermined number of Common Shares as may
be issuable from time to time upon conversion of Debt Securities.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS
[LOGO]
$200,000,000
PIONEER-STANDARD ELECTRONICS, INC.
DEBT SECURITIES AND COMMON SHARES
Pioneer-Standard Electronics, Inc. (the "Company") may from time to time
offer, together or separately, its (i) debt securities (the "Debt Securities")
and (ii) common shares, without par value (the "Common Shares"), in amounts, at
prices and on terms to be determined at the time of the offering. The Debt
Securities and Common Shares are collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances and will be limited to $200,000,000 aggregate public
offering price (or its equivalent, based on the applicable exchange rate at the
time of sale, in one or more foreign currencies, currency units or composite
currencies as shall be designated by the Company). Certain specific terms of the
particular Securities in respect of which this Prospectus is being delivered are
set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement"), including, where applicable, (i) in the case of Debt Securities,
the title, aggregate principal amount, currency or currencies in which the
principal (and premium, if any) and any interest are payable, denominations,
maturity, rate (which may be fixed or variable) and time of payment of any
interest, any terms for redemption at the option of the Company or the holder,
any terms for sinking fund payments, any listing on a securities exchange and
any initial public offering price and other terms in connection with the
offering and sale of the Debt Securities and (ii) in the case of Common Shares,
the terms of the offering and the sales thereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY MISREPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The Securities will be sold directly, through agents, underwriters or
dealers, as designated from time to time, or through a combination of such
methods. See "Plan of Distribution." If agents of the Company or any dealers or
underwriters are involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable commissions or discounts will be set forth in or may be
calculated from the Prospectus Supplement with respect to such Securities.
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LAZARD FRERES & CO. LLC
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The date of this Prospectus is , 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), all of which may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can also be obtained
from the Commission at prescribed rates through its Public Reference Section at
450 Fifth Street, N.W., Washington, D.C. 20549. The Company's Common Shares are
traded on the Nasdaq National Market, and reports, proxy statements and other
information concerning the Company may be inspected at the office of the Nasdaq
National Market at 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of the Registration Statement on Form
S-3 filed by the Company with the Commission under the Securities Act. This
Prospectus and the accompanying Prospectus Supplement omit certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. For further information with respect to the
Company and the Securities, reference is made to the Registration Statement and
to the schedules and exhibits filed therewith. Statements contained in this
Prospectus as to the contents of certain documents are not necessarily complete,
and, with respect to each such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission, reference is made to the copy
of the document so filed. Each statement is qualified in its entirety by such
reference.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus or the Prospectus Supplement, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus and the Prospectus Supplement do not constitute an
offer of any securities other than those to which it relates or an offer to
sell, or a solicitation of an offer to buy, to any person in any jurisdiction
where such an offer or solicitation would be unlawful. Neither the delivery of
this Prospectus or any Prospectus Supplement nor any sale made hereunder or
thereunder shall, under any circumstance, create any implication that the
information contained herein or therein is correct as of any time subsequent to
their respective dates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended March 31, 1996,
which was filed by the Company with the Commission under the Exchange Act, is
incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by reference
in this Prospectus or in any Prospectus Supplement from the date of filing or
furnishing of such documents or reports. Any statement contained in a document
incorporated by reference herein or in any Prospectus Supplement shall be deemed
to be modified or superseded for purposes of this Prospectus and such Prospectus
Supplement to the extent that a statement contained herein or therein or in any
other subsequently filed document which also is incorporated by reference herein
or therein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or any Prospectus Supplement.
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The Company will provide without charge to each person to whom a copy of
this Prospectus or any Prospectus Supplement is delivered, upon the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated herein or therein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be directed to the Vice President, Treasurer and Assistant Secretary,
4800 East 131st Street, Cleveland, Ohio 44105. Telephone requests for such
copies should be directed to the Vice President, Treasurer and Assistant
Secretary at (216) 587-3600.
THE COMPANY
The Company is engaged in the distribution of industrial and end-user
electronic components and computer products. The Company distributes its
products principally in the United States and Canada. The Company was organized
as an Ohio corporation in 1963, and its Common Shares are traded on the Nasdaq
National Market under the symbol PIOS. The Company's executive offices are
located at 4800 East 131st Street, Cleveland, Ohio 44105 and its telephone
number is (216) 587-3600.
RECENT ACQUISITIONS
On June 1, 1994, Pioneer-Standard Canada Inc., a newly-formed Canadian
subsidiary of the Company, ("P-S Canada"), purchased from United Westburne Inc.
certain of the assets and assumed certain liabilities of United Westburne's
Zentronics Division, which the Company believes is one of the largest
distributors of electronic components and computer products in Canada. On
November 30, 1995, the Company acquired the remaining 50% of the Common Stock of
Pioneer-Standard of Maryland, Inc., a Maryland corporation, then known as
Pioneer/Technologies Group Inc. ("Technologies"). Prior to this acquisition, the
Company owned 50% of the Common Stock of Technologies. Except as otherwise
stated, the term "Company" as used herein includes P-S Canada and Technologies.
INDUSTRIAL AND END-USER DISTRIBUTION
The Company distributes a broad range of electronics components and
computer products manufactured by others. These products are sold to original
equipment manufacturers, value-added resellers, research laboratories,
government agencies, and end-users, including manufacturing companies and
service and other non-manufacturing organizations. These products are classified
into three broad categories: semiconductors, computer products, and passive and
electromechanical components. During fiscal 1996, semiconductor products
accounted for 38% of the Company's sales compared with 37% in 1995 and 41% in
1994. These products include microprocessors, memory devices, programmable logic
devices, analog and digital integrated circuits and other semiconductor devices.
During fiscal 1996, computer products accounted for 40% of the Company's sales
compared with 38% in 1995 and 33% in 1994. These products include computers
(primarily mini and personal), display terminals, disk drives, development
systems and networking products. During fiscal 1996, passive and
electromechanical products accounted for 20% of the Company's sales, compared
with 22% in 1995 and 24% in 1994. These products include capacitors, connectors,
resistors, potentiometers, switches and power conditioning equipment.
As a part of its distributor operations, the Company provides value-added
services including point of use inventory management, systems integration,
just-in-time kitting operations, memory and logic device programming and
connector assemblies to customer specifications. Sales amounts for these
services are included among the three broad categories discussed above.
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PRODUCTS DISTRIBUTED AND SOURCES OF SUPPLY
The Company is the fourth largest of the approximately 1,500 electronics
distributors serving North American markets on the basis of total sales, which
includes combined sales of the Company and Technologies prior to November 30,
1995. The Company markets electronic components supplied by over 100
manufacturers. A majority of the Company's revenues comes from products sourced
by relatively few suppliers. During the 1996 fiscal year, products purchased
from the Company's five largest suppliers accounted for 69% of total sales
volume, with Digital Equipment Corporation (27%) and Intel Corporation (18%)
being the largest two suppliers. The loss of any one of the top five suppliers
and/or a combination of certain other suppliers could have a material adverse
effect on the Company's sales and earnings unless alternative products
manufactured by others are available to the Company.
The majority of the products sold by the Company are purchased pursuant to
distributor agreements which generally provide for inventory return privileges
by the Company upon cancellation of a distributor agreement. The distributor
agreements also typically provide protection to the Company for product
obsolescence and price erosion. The Company believes it has good relationships
with its suppliers.
CUSTOMERS
The Company serves over 24,000 customers in many major markets of North
America. No single customer accounted for more than 5% of the Company's total
sales for the 1996 fiscal year.
COMPETITION
The sale and distribution of industrial electronic components and computer
products is highly competitive, primarily with respect to price and product
availability, but also with respect to service, variety, number of locations and
promptness of service. Many of the distributors with whom the Company competes
are regional or local distributors. However, several of the Company's strongest
competitors have national and international distribution businesses. The Company
also experiences competition from manufacturers, including some of the Company's
suppliers, who may sell directly to the industrial and end-user account base.
EMPLOYEES
As of March 31, 1996, the Company had 2,052 employees, with approximately
2,016 of these persons employed on a full-time basis and the balance on a
part-time basis. The Company is not a party to any collective bargaining
agreement, has had no strikes or work stoppages and considers its employee
relations to be excellent.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Securities will be used by the Company for the reduction of
bank indebtedness, working capital, and general corporate purposes. Until the
proceeds are used for these purposes, the Company may deposit them in
interest-bearing accounts or invest them in short-term investment securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the last five fiscal years. In computing the ratio of
earnings to fixed charges, income used in the calculation of the ratio of
earnings to fixed charges consists of income before income taxes plus fixed
charges. Fixed charges consist of interest on debt and the portion of rental
expense which is deemed representative of the interest factor. The computation
of the ratio of earnings to fixed charges includes the Company's 50% pro rata
share of Technologies prior to November 30, 1995.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED MARCH 31,
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1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (unaudited).......... 5.08x 7.90x 8.74x 5.15x 2.37x
</TABLE>
4
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities are to be issued under an Indenture, dated as of July
, 1996, as supplemented from time to time (the "Indenture") between the
Company and Star Bank, N.A., as trustee (the "Trustee"), which is an exhibit to
the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Debt Securities and the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by express reference to, all the provisions of the Indenture, including the
definitions therein of certain terms. Certain terms defined in the Indenture are
capitalized herein. Particular section numbers refer to sections in the
Indenture.
GENERAL
The Debt Securities will be unsecured obligations of the Company and will
rank on a parity with all other unsecured and unsubordinated indebtedness of the
Company. The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued thereunder from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the Debt
Securities for the following terms thereof: (1) the title of the Debt
Securities; (2) any limit on the aggregate principal amount of the Debt
Securities; (3) whether the Debt Securities of any such series are to be
issuable in permanent global form with or without coupons; (4) the date or dates
on which the principal of the Debt Securities is payable; (5) the rate or rates
(which may be fixed or variable) per annum at which the Debt Securities will
bear interest, if any, and the date from which such interest will accrue; (6)
the dates on which such interest will be payable and the Regular Record Dates
for such Interest Payment Dates; (7) the place or places where the principal of
(and premium, if any) and interest on the Debt Securities will be payable; (8)
the dates, if any, on which and the price or prices at which the Debt Securities
may, pursuant to any mandatory or optional sinking fund provisions, be redeemed
by the Company and other terms and provisions of such sinking funds; (9) the
date, if any, after which and the price or prices at which the Debt Securities
may, pursuant to any optional redemption provisions, be redeemed at the option
of the Company or of the Holder thereof and other detailed terms and provisions
of such optional redemption; (10) the currency or units based on or relating to
currencies in which the Debt Securities are denominated and in which principal
of (and premium, if any) and any interest on the Debt Securities will or may be
payable; and (11) any additional Events of Default or covenants with respect to
the Debt Securities or the terms and conditions thereof other than those set
forth in the Indenture (Section 301). For a description of the terms of the Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and to the description of Debt Securities set forth herein.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of, and any
premium or interest on, the Debt Securities will be payable, and the Debt
Securities will be exchangeable and transfers thereof will be registrable, at
the Corporate Trust Office of the Trustee at 425 Walnut Street, Cincinnati, Ohio
45201-1118, provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register (Sections 202, 305, 307, 308 and 1002).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued in United States dollars in fully registered
form, without coupons, in denominations of $1,000 or any integral multiple
thereof (Section 302). Unless otherwise provided in the Debt Securities to be
transferred or exchanged, no service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith (Section 305).
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Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
principal amount thereof. Special federal income tax, accounting and other
considerations applicable to any such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security which provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and during the continuation thereof (Section 101).
RESTRICTIVE COVENANTS
Restrictions Upon Secured Debt
The Company covenants that it will not, and will not permit any Restricted
Subsidiary to, create, incur, issue, assume or guarantee any indebtedness for
borrowed money (hereinafter called "indebtedness") secured by a mortgage,
security interest, pledge or lien (hereinafter called "mortgage") of or upon any
Principal Property or any shares of capital stock or indebtedness of any
Restricted Subsidiary, whether owned at the date of the Indenture or thereafter
acquired, without effectively providing that the Debt Securities (together with,
if the Company shall so determine, any other indebtedness created, incurred,
issued, assumed or guaranteed by the Company or any Restricted Subsidiary and
then existing or thereafter created) shall be secured by such mortgage equally
and ratably with (or, at the option of the Company, prior to) such indebtedness.
The foregoing restrictions, however, shall not apply to (1) mortgages of or upon
any property acquired, constructed or improved by, or of or upon any shares of
capital stock or indebtedness acquired by, the Company or any Restricted
Subsidiary after the date of the Indenture to secure the payment of all or any
part of the purchase price of such property, shares of capital stock or
indebtedness or of the cost of any acquisition, completion of construction or
commencement of commercial operation of such property, which indebtedness is
incurred prior to, at the same time as or within 270 days after such
acquisition, completion of such construction or the commencement of commercial
operation of such property; (2) mortgages of or upon any property, shares of
capital stock or indebtedness existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary; (3) mortgages of or upon any property of a
corporation existing at the time such corporation is merged with or into or
consolidated with the Company or any Restricted Subsidiary or existing at the
time of a sale or transfer of the properties of a corporation as an entirety or
substantially as an entirety to the Company or any Restricted Subsidiary; (4)
mortgages of or upon any property of, or shares of capital stock or indebtedness
of, a corporation existing at the time such corporation becomes a Restricted
Subsidiary; (5) mortgages to secure indebtedness in favor of the Company or any
Restricted Subsidiary; (6) mortgages in favor of governmental bodies to secure
partial, progress, advance or other payments pursuant to any contract or statute
or to secure indebtedness incurred or guaranteed to finance or refinance all or
any part of the purchase price of the property, shares of capital stock or
indebtedness subject to such mortgages, or the cost of constructing or improving
the property subject to such mortgages; (7) mortgages to secure payment of taxes
or assessments or other governmental charges or levies being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and for which such reserve or other appropriate provision, if any, as is
required is made; (8) mortgages to secure obligations under workers'
compensation or similar legislation; (9) mortgages to secure performance of
statutory obligations, surety bonds or appeal bonds, performance or
return-of-money bonds or other obligations of a like nature incurred in the
ordinary course of business; (10) attachment and judgment mortgages for which an
insurance carrier shall have acknowledged in writing liability in respect of the
full amount thereof or shall have been ordered by a court of competent
jurisdiction to pay; and (11) extensions, renewals or replacements of any
mortgage existing on the date of the Indenture or any mortgage referred to in
the foregoing clauses (1) through (10), inclusive (Section 1010).
Notwithstanding the restrictions outlined above, the Company or any
Restricted Subsidiary may, without equally and ratably securing the Debt
Securities, issue, assume or guarantee indebtedness secured by a mortgage not
excepted under clauses (1) through (11) above, if the aggregate amount of such
indebtedness, together with all other indebtedness of, or indebtedness
guaranteed by, the Company and its Restricted Subsidiaries existing at such time
and secured by mortgages not so excepted and the Attributable Debt existing in
respect of Sale and Leaseback Transactions (other than Sale and Leaseback
Transactions in
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respect of which amounts equal to the Attributable Debt relating to the
transactions shall have been applied, within 270 days after the effective date
of the arrangement, to the prepayment or retirement (other than any mandatory
prepayment or retirement) of long-term indebtedness and Sale and Leaseback
Transactions in which the property involved would have been permitted to be
mortgaged under clause (1) or (6) above) does not at the time such indebtedness
is issued, assumed or guaranteed exceed 10% of Consolidated Net Tangible Assets
(Section 1010).
Restrictions upon Sale and Leaseback Transactions
Sale and Leaseback Transactions by the Company or any Restricted Subsidiary
of any Principal Property are prohibited unless (i) the Company or such
Restricted Subsidiary would be entitled, without equally and ratably securing
the Debt Securities, to incur indebtedness secured by a mortgage on the property
to be leased pursuant to clause (1) or (6) under the subsection Restrictions
Upon Secured Debt above; (ii) the Company or such Restricted Subsidiary would be
entitled, without equally and ratably securing the Debt Securities, to issue,
assume or guarantee indebtedness secured by a mortgage on such property in an
amount at least equal to the Attributable Debt in respect of the Sale and
Leaseback Transaction; or (iii) the Company shall apply, within 270 days after
the effective date of the arrangement, an amount equal to the Attributable Debt
in respect of the transaction to the prepayment or retirement (other than any
mandatory prepayment or retirement) of long-term indebtedness of the Company or
any Restricted Subsidiary (Section 1011).
Restrictions on Indebtedness of Restricted Subsidiaries
The Company is prohibited from permitting any Restricted Subsidiary from
creating, incurring, issuing, assuming or guaranteeing any indebtedness;
provided, however, that the restriction will not apply if: (1) such indebtedness
is owed to the Company; (2) such indebtedness existed at the time the
corporation that issued such indebtedness became a Restricted Subsidiary of the
Company, or was merged with or into or consolidated with such Restricted
Subsidiary, or at the time of a sale, lease or other disposition of the
properties of such corporation as an entirety to such Restricted Subsidiary; (3)
such indebtedness is guaranteed by a governmental agency; (4) such indebtedness
is issued, assumed or guaranteed in connection with, or with a view to,
compliance by such Restricted Subsidiary with the requirements of any program
adopted by a governmental authority and applicable to such Restricted Subsidiary
and providing financial or tax benefits to such Restricted Subsidiary which are
not available directly to the Company; (5) such indebtedness is nonrecourse to
the Restricted Subsidiary; or (6) such indebtedness is incurred for the purpose
of extending, renewing, substituting, replacing or refunding indebtedness
permitted by the foregoing clauses (1) through (5), provided that the principal
amount of such indebtedness cannot exceed the principal amount of indebtedness
being extended, renewed, replaced or refunded. Notwithstanding the restriction
on indebtedness contained in the Indenture and summarized above, the Company's
Restricted Subsidiaries may create, incur, issue, assume or guarantee
indebtedness which would otherwise be subject to the foregoing restrictions in
an aggregate principal amount which, together with the aggregate outstanding
principal amount of all other indebtedness of the Company and its Restricted
Subsidiaries which would otherwise be subject to the restrictions (which
calculation includes and excludes certain indebtedness as specifically set forth
in the Indenture), does not at the time such indebtedness is incurred exceed an
amount equal to 10% of Consolidated Net Tangible Assets (Section 1012).
CHANGE OF CONTROL
Upon the occurrence of a Change of Control (the "Change of Control Date"),
each Holder will have the right, at the Holder's option, to require that the
Company purchase all or any part (provided that the principal amount must be
$1,000 or an integral multiple thereof) of such Holder's Debt Securities
pursuant to the offer described below (the "Change of Control Offer") at a
purchase price equal to 100% of the principal amount of such Debt Securities
plus accrued and unpaid interest, if any, to the date of such purchase (Section
1013).
Within ten days after the Change of Control Date, the Company will mail a
notice (which notice will contain all instructions and materials necessary to
enable Holders to tender their Debt Securities) to each Holder of Debt
Securities of each applicable series. All Debt Securities of each applicable
series properly
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<PAGE> 9
tendered will be accepted for payment on a date (the "Change of Control Payment
Date") which will be no earlier than 30 days nor later than 40 days from the
date such notice is mailed (Section 1013).
On the Change of Control Payment Date, the Company will accept for payment
all Debt Securities of each applicable series or portions thereof properly
tendered pursuant to the Change of Control Offer, deposit with the applicable
Paying Agent money sufficient to pay the purchase price of all Debt Securities
of each applicable series or portions thereof so accepted and deliver to the
Trustee Debt Securities so accepted, together with an Officer's Certificate
stating the Debt Securities or portions thereof tendered to the Company. The
Paying Agent will promptly mail to the Holder of Debt Securities of each series
so accepted payment in an amount equal to the purchase price, and the Trustee
will promptly authenticate and mail or make available for delivery to such
Holder a new Debt Security of the same series as, and equal in principal amount
to, any unpurchased portion of the Debt Security surrendered. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date (Section 1013).
In the event that the aggregate principal amount of the Debt Securities
that are surrendered pursuant to a Change of Control Offer on a Change of
Control Payment Date is at least 80% of the aggregate principal amount of the
Debt Securities outstanding, the remaining Debt Securities will be subject to
the Company's purchase as a whole, at the Company's option, upon not less than
30 days notice mailed to each Holder thereof on a date selected by the Company
that is within 30 days after such Change of Control Payment Date, at a price
equal to 100% of the principal amount, plus accrued interest to such date of
purchase (Section 1013).
Whether a Change of Control has occurred depends on the accumulation of
Common Shares of the Company, on certain changes in the composition of the
Company's Board of Directors or on the disposition of all or substantially all
of the assets of the Company. As a result, the Company can enter into certain
highly leveraged transactions, including certain recapitalizations, mergers or
stock repurchases, that would not result in the application of the Change of
Control provisions. With respect to any Change of Control Offer, the Company
intends to comply with the requirements of Section 14(e) and Rule 14e-1 under
the Exchange Act, if then applicable.
The Change of Control purchase feature of the Debt Securities may in
certain circumstances make more difficult or discourage a takeover of the
Company and, thus, the removal of incumbent management. The Change of Control
purchase feature, however, is not the result of management's knowledge of any
specific effort to accumulate Common Shares or obtain control of the Company by
means of a merger, tender offer, solicitation or otherwise, or part of a plan by
management to adopt a series of anti-takeover provisions. The Change of Control
purchase feature is a provision commonly found in similar debt offerings.
If a Change of Control were to occur, there can be no assurance that the
Company would have sufficient funds to pay the required purchase price for all
the Debt Securities tendered by the Holders thereof. The Company's ability to
purchase the Debt Securities tendered upon a Change of Control may be limited by
the terms of its then-existing borrowing and other agreements.
Certain Definitions
The term "Acquiring Person" generally means any person or group (as defined
in Section 13(d)(3) of the Exchange Act) who or which, together with all
affiliates and associates (as defined in Rule 12b-2 under the Exchange Act),
becomes the beneficial owner of common shares of the Company having more than
50% of the total number of votes that may be cast for the election of directors
of the Company (Section 101).
The term "Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at any particular time, the present value (discounted at the rate of
interest implicit in the lease involved in such Sale and Leaseback Transaction,
as determined in good faith by the Company) of the obligation of the lessee
thereunder for rental payments (excluding, however, any amounts required to be
paid by such lessee, whether or not designated as rent or additional rent, on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges or any amounts required to be paid by such lessee thereunder
contingent upon the amount of sales, maintenance and repairs, insurance, taxes,
assessments, water rates or
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<PAGE> 10
similar charges) during the remaining term of such lease (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended) (Section 101).
The term "Change of Control" means any event by which (i) an Acquiring
Person has become such, (ii) Continuing Directors cease to comprise a majority
of the members of the Board of Directors of the Company or (iii) all or
substantially all the properties and assets of the Company as an entirety or
substantially as an entirety are sold, assigned, transferred or leased (Section
101).
The term "Consolidated Net Tangible Assets" means, as of any particular
time, the total amount of assets (less applicable reserves) after deducting
therefrom (i) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed and excluding current maturities of long-term indebtedness) and (ii)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangible assets, all as shown in the audited
consolidated balance sheet of the Company and subsidiaries contained in the
Company's then most recent annual report to shareholders, except that assets
will include an amount equal to the Attributable Debt in respect of any Sale and
Leaseback Transaction not capitalized on such balance sheet (Section 101).
The term "Continuing Director" generally means any member of the Board of
Directors, while such person is a member of such Board of Directors, who is not
an Acquiring Person, or affiliated with an Acquiring Person and who (i) was a
member of the Board of Directors prior to the date of the Indenture or (ii)
subsequently becomes a member of such Board of Directors and whose nomination
for election or election to such Board of Directors is recommended or approved
by a majority of the Continuing Directors or who is included as a nominee in a
proxy statement of the Company distributed when a majority of such Board of
Directors consists of Continuing Directors (Section 101).
The term "Principal Property" means any manufacturing or assembly plant or
warehouse owned at the date of the Indenture or acquired after such date by the
Company or any Restricted Subsidiary which is located within the United States
or Canada and has gross book value (including land and improvements, machinery
and equipment thereon) which exceeds 2% of Consolidated Net Tangible Assets at
the time of determination thereof other than (i) any such manufacturing or
assembly plant or warehouse or any other real property or any portion thereof
(together with the land and fixtures comprising a part thereof) which is
financed by certain tax exempt industrial development bonds, (ii) any property
which, in the opinion of the Board of Directors of the Company, is not of
material importance to the total business conducted by the Company and its
Restricted Subsidiaries taken as a whole, or (iii) any portion of a particular
property which is similarly found not to be of material importance to the use or
operation of such property (Section 101).
The term "Restricted Subsidiary" means any Subsidiary (i) substantially all
of the property of which is located, or substantially all of the business of
which is carried on, within the United States of America (other than its
territories or possessions and other than Puerto Rico) or Canada and (ii) which
owns a Principal Property; provided, however, that any Subsidiary which is
principally engaged in financing operations outside the United States of America
or which is principally engaged in leasing or in financing installment
receivables shall not be a Restricted Subsidiary (Section 101).
The term "Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
any Principal Property, whether owned at the date of the Indenture or thereafter
acquired (except for temporary leases for a term, including any renewal thereof,
of not more than three years and except for leases between the Company and any
Restricted Subsidiary, between any Restricted Subsidiary and the Company or
between Restricted Subsidiaries) which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person with the
intention of taking back a lease of such property (Section 1011).
The term "Subsidiary" means any corporation more than 50% of the
outstanding voting stock of which is at the time owned, directly or indirectly,
by the Company and/or one or more of its other Subsidiaries (Section 101).
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<PAGE> 11
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (1) failure, for a period of two days, to pay any
interest on any Debt Security of that series when due; (2) failure to pay
principal of (or premium, if any) on any Debt Security of that series when due;
(3) failure to deposit any sinking fund payment in respect of any Debt Security
of that series when due; (4) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (5) an
event of default, as defined in any mortgage, indenture, or instrument under
which there may be issued, or by which there may be secured or evidenced, any
Indebtedness in excess of $15,000,000 of the Company or a Subsidiary, continued
for 15 days after written notice to the Company from the Trustee or to the
Company and to the Trustee from the Holders of at least 10% in aggregate
principal amount of the Debt Securities of that series at the time outstanding;
(6) certain events of bankruptcy, insolvency or reorganization relating to the
Company; and (7) any other Event of Default provided with respect to Debt
Securities of that series (Section 501).
If an Event of Default with respect to any series of Outstanding Debt
Securities shall occur and be continuing, either the Trustee or the Holders of
at least 25% in principal amount of the Outstanding Debt Securities of that
series may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) to be due and payable
immediately. However, at any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree based on such acceleration has been obtained, the Holders of a majority
in principal amount of Outstanding Debt Securities of that series may, subject
to certain conditions, rescind and annul such acceleration if all Events of
Default, other than the nonpayment of accelerated principal, with respect to
Debt Securities of that series have been cured or waived as provided in the
Indenture (Section 502). Notwithstanding the foregoing, if an Event of Default
occurs under clause (6) above, all unpaid principal of and accrued interest on
the Outstanding Securities of that series (or specified principal amount) ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder of any Security of that series. For
information as to waiver of defaults, see "Modification and Waiver." Reference
is made to the Prospectus Supplement relating to any series of Debt Securities
which are Original Issue Discount Securities for the particular provisions
relating to acceleration of the Maturity of a portion of the principal amount of
such Original Issue Discount Securities upon the occurrence of any Event of
Default and the continuation thereof.
The Indenture provides that, subject to the duties of the Trustee to act
with the required standard of care if an Event of Default shall occur and be
continuing, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity (Sections 601 and 603). Subject to such provisions for
security or indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of that series (Section 512).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the indenture or for any remedy
thereunder, unless (1) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to Debt Securities of that
series; (2) the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of that series has made written request to the Trustee to
institute such proceedings; (3) such Holder has offered reasonable security or
indemnity to the Trustee to institute such proceeding as trustee; (4) the
Trustee has not received from the Holders of a majority in principal amount of
the Outstanding Debt Securities of that series a direction inconsistent with
such request; and (5) the Trustee has failed to institute such proceeding within
60 days (Section 507). However, the Holder of any Debt Security will have an
absolute right to receive payment of the principal of (and premium, if any) and
any interest on such Debt Security on or after the due dates expressed in such
Debt Security and to institute suit for the enforcement of any such payment
(Section 508).
The Indenture requires the Company to furnish to the Trustee annually a
statement as to the existence of any Default or Event of Default under the
Indenture (Section 1006). The Indenture provides that the Trustee
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<PAGE> 12
may withhold notice to the Holders of Debt Securities of any series of any
default (except in payment of principal or any premium or interest or in sinking
fund payments) with respect to Debt Securities of that series if it considers it
in the interest of the Holders of Debt Securities of that series to do so
(Section 602).
MODIFICATION AND WAIVER
Modification and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby, (1)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any Debt Security; (2) reduce the principal amount of (or
premium, if any) or interest on, any Debt Security; (3) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof; (4) change the place or currency of payment of principal
of (or premium, if any) or interest on, any Debt Security; (5) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security after the Stated Maturity; (6) change the redemption provisions in
a manner adverse to the Holders; or (7) reduce the percentage in principal
amount of Outstanding Debt Securities of any series, the consent of the Holders
of which is required for modification or amendment of the Indenture, waiver of
compliance with certain provisions of the Indenture or waiver of certain
Defaults or Events of Default (Section 902).
Under certain circumstances, the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of any series may on behalf
of the Holders of all Debt Securities of that series waive, insofar as that
series is concerned, compliance by the Company with certain restrictive
covenants of the Indenture (Section 1015). The Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
may on behalf of the Holders of all Debt Securities of that series waive any
past Default or Event of Default under the Indenture with respect to that
series, except a Default or Event of Default in the payment of the principal of
(or premium, if any) or any interest on any Debt Security of that series or in
respect of a provision which under the Indenture cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of that
series affected (Section 513).
DEFEASANCE
Defeasance and Discharge. If the Debt Securities of any series so provide,
the Company will be discharged (hereinafter, "defeasance") from any and all
obligations in respect of Debt Securities of that series (except for certain
obligations to pay to Holders of Outstanding Securities of such series any
payments in respect of the principal of (and premium, if any) and any interest
on such Debt Securities when such payments are due, to prepare and make
available temporary securities, to register the transfer or exchange of Debt
Securities of that series, to replace stolen, lost or mutilated Debt Securities
of that series, to maintain paying agencies, to compensate and indemnify the
Trustee and to furnish the Trustee (if the Trustee is not the registrar) with
the names and addresses of the holders of Debt Securities of that series) upon
the irrevocable deposit with the Trustee, in trust, of money and/or obligations
of the United States government or securities issued by United States government
agencies backed by the full faith and credit of the United States government
which, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of (and premium, if any) and the interest on the Debt Securities
of that series on the Stated Maturity of such payments in accordance with the
terms of the Debt Securities of that series (Sections 1302 and 1304). Such a
defeasance may be effected only if, among other things, the Company has
delivered to the Trustee a ruling directed to the Trustee received from the
Internal Revenue Service to the effect that the Holders of the Debt Securities
of that series will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred, or an Opinion of Counsel (who
may be an employee of or counsel to the Company), based on such ruling or on a
change in the applicable federal income tax law since the date of the Indenture,
to the same effect (Section 1304). In addition, the Company may also obtain a
discharge of the Indenture with respect to all Debt Securities issued under the
Indenture by depositing with the Trustee, in trust, money sufficient to pay at
Stated Maturity or upon redemption all of such Debt
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Securities, provided that such Debt Securities are by their terms to become due
and payable within one year or are to be called for redemption within one year
(Section 401).
Defeasance of Certain Covenants and Certain Events of Default. If the Debt
Securities of any series so provide, the Company may omit to comply
(hereinafter, "covenant defeasance") with the restrictive covenants described
under Restrictive Covenants -- Restrictions Upon Secured Debt, -- Restrictions
Upon Sale and Leaseback Transactions, -- Restrictions on Indebtedness of
Restricted Subsidiaries and Consolidation, Merger and Sale of Assets, and no
Default or Event of Default shall arise with respect to Debt Securities of such
series by reason of any failure to comply therewith, upon the irrevocable
deposit with the Trustee, in trust, of money and/or obligations of the United
States government or securities issued by United States government agencies
backed by the full faith and credit of such government which through the payment
of interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any) and the interest on the Debt Securities of that series on the Stated
Maturity of such payments in accordance with the terms of the Debt Securities of
that series (Section 1303 and 1304). The obligations of the Company under the
Debt Securities of that series other than with respect to the covenants referred
to above and all Defaults and Events of Default other than with respect to such
covenants shall remain in full force and effect. Such a covenant defeasance may
be effected only if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel (who may be an employee of or counsel for the
Company), or a ruling directed to the Trustee received from the Internal Revenue
Service, to the effect that the Holders of the Debt Securities of that series
will not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times, as would have been
the case if such covenant defeasance had not occurred (Section 1304).
Covenant Defeasance and Certain Other Events of Default. In the event the
Company exercises its option to effect a covenant defeasance with respect to the
Debt Securities of any series as described above and the Debt Securities of that
series are thereafter declared due and payable because of the occurrence of any
Event of Default other than the Event of Default caused by failing to comply
with the covenants which are defeased, if the amount of money and securities on
deposit with the Trustee would be sufficient to pay amounts due on the Debt
Securities of that series at the time of their Stated Maturity but are not
sufficient to pay amounts due on the Debt Securities of that series at the time
of the acceleration resulting from such Event of Default, the Company would
remain liable for such payments (Sections 1303 and 1304).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with, or merge with or into any other
Person (whether or not the Company shall be the surviving corporation), or sell,
assign, transfer or lease all or substantially all of its properties and assets
as an entirety or substantially as an entirety to any Person or group of
affiliated Persons, in one transaction or a series of related transactions,
unless (1) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or with which or into which
the Company is merged or the Person (or the group of affiliated Persons) to
which all or substantially all the properties and assets of the Company as an
entirety or substantially as an entirety are sold, assigned, transferred or
leased shall be a corporation (or constitute corporations) organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental to the Indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and the Indenture; and (2) immediately before and after giving effect
to such transaction or series of related transactions, no Default or Event of
Default shall have occurred and be continuing (Section 801).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York (Section 112).
REGARDING THE TRUSTEE
The Trustee, Star Bank, N.A., is one of a number of banks with which the
Company maintains ordinary banking relationships and credit facilities.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 40,000,000 Common
Shares, without par value. The shareholders of the Company are being asked to
approve, at the July 23, 1996 Annual Meeting of Shareholders, an amendment to
the Company's Articles of Incorporation, as amended (the "Articles of
Incorporation") to increase the authorized capital stock of the Company to
80,000,000 Common Shares, without par value. The principal purpose for the
proposal is to make available additional Common Shares for possible stock splits
or dividends, employee benefit plans, acquisitions, private or public stock
offerings and other corporate purposes. The following summary description of the
capital stock of the Company does not purport to be complete and is qualified in
its entirety by reference to the Company's Articles of Incorporation, a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is part.
COMMON SHARES
The holders of Common Shares are entitled to receive dividends when, as and
if declared from time to time by the Board of Directors out of funds legally
available therefor. The Common Shares have no preemptive rights or conversion
rights and are not subject to further calls or assessments by the Company. There
are no redemption or sinking fund provisions applicable to the Common Shares.
All currently outstanding Common Shares are, and the Common Shares being sold by
the Company in this offering will be, duly authorized, validly issued, fully
paid and nonassessable. The holders of Common Shares, upon proper notice, have
the right to vote cumulatively in the election of directors. The Board of
Directors consists of ten members divided into three classes of three, four and
three members, respectively. The directors of the class elected at each Annual
Meeting of Shareholders hold office for a term of three years. The Articles can
be amended by the affirmative vote of the holders of at least two-thirds of the
Company's then outstanding shares having voting power thereon.
SHARE SUBSCRIPTION AGREEMENT AND TRUST
The Company has entered into a Share Subscription Agreement and Trust with
Wachovia Bank of North Carolina, N.A., as Trustee, pursuant to which the Trustee
has subscribed for 5,000,000 Common Shares of the Company which will be paid for
over the 15 year term of the Trust. The proceeds from the sale of the Common
Shares will be used to fund Company obligations under various employee benefit
plans, to pay cash bonuses and other similar employee related Company
obligations. Under Ohio law, the subscribed for Common Shares are deemed to be
issued and outstanding for voting and dividend purposes, but will not be fully
paid and nonassessable until payment for such Common Shares is received as
provided in the Trust. According to generally accepted accounting principles,
none of the 5,000,000 Common Shares will be deemed outstanding for purposes of
calculating earnings per share until payment is received for the Common Shares
as provided in the Trust.
OTHER MATTERS
Code of Regulations. The Company's Code of Regulations, as amended (the
"Code"), 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 Code provides that 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, 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, such
number being that 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
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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.
Business Combinations. Under the Articles, the affirmative vote of not
less than 80% of the outstanding Common Shares is required for the approval or
authorization of any Business Combination (as hereinafter defined) involving the
Company and an Interested Party (as hereinafter defined). This provision does
not apply to Business Combinations with Interested Parties which have been
approved by a majority of Continuing Directors (as hereinafter defined) or which
satisfy certain provisions of the Articles relating to the consideration to be
paid to the holders of Common Shares by the Interested Party. For purposes of
the Articles, the term "Business Combination" means (i) any merger or
consolidation involving both the Company and the Interested Party, or a
subsidiary of either of them, (ii) any sale, lease, transfer or other
disposition of assets of the Interested Party, (iii) adoption of a plan of
liquidation or dissolution, (iv) issuance or transfer by the Company or a
subsidiary to an Interested Party of any securities with a market value of $2
million or more, or (v) any recapitalization, reclassification or other
transaction which would have the effect of increasing the Interested Party's
voting power in the Company. The term "Interested Party" means (i) any
individual, corporation, partnership or other person or entity which, together
with its affiliates or associates, is a beneficial owner of 10% or more of the
aggregate voting power of any class of capital stock of the Company entitled to
vote generally in the election of directors, and (ii) any affiliate or associate
of such individual, corporation, partnership or other person or entity. The term
"Continuing Director" means any director who is not an affiliate of an
Interested Party and who was a member of the Board of Directors of the Company
immediately prior to the time that the Interested Party involved in a Business
Combination became an Interested Party, and any successor to a Continuing
Director who is not such an affiliate and who is nominated to succeed a
Continuing Director by a majority of the Continuing Directors in office at the
time of such nomination.
Certain Provisions of Ohio Law. The Company is subject to certain
provisions of Ohio law which may discourage or render more difficult an
unsolicited takeover of the Company. Among these are provisions that (i)
prohibit certain mergers, sales of assets, issuance or purchases of securities,
liquidation or dissolution, or reclassification of the then outstanding shares
of an Ohio corporation involving certain holders or stock representing 10% or
more of the voting power (other than present shareholders), unless (a) such
transactions are approved by the directors prior to the 10% shareholder becoming
such, (b) the acquisition of 10% of the voting power is approved by the
directors prior to the 10% shareholders becoming such, or (c) such transactions
involve a 10% shareholder which has been such for at least three years and the
transaction is approved by holders of two-thirds of the voting power of the
Company and the holders of a majority of the voting power not owned by the 10%
shareholders or certain minimum price and form of consideration requirements are
met; and (ii) provide Ohio corporations, or in certain circumstances the
shareholders of an Ohio corporation, a cause of action to recover profits
realized under certain circumstances by persons who dispose of securities of a
corporation within 18 months of proposing to acquire such corporation.
In addition, the acquisition of shares entitling the holder to execute
certain levels of voting power of the Company (one-fifth or more, one-third or
more, or a majority) can be made only with the prior authorization of (i) the
holders of at least a majority of the total voting power and (ii) the holders of
at least a majority of the total voting power held by shareholders other than
the proposed acquirer, officers of the Company elected or appointed by the
directors, and directors who are also employees and excluding certain shares
that are transferred after the announcement of the proposed acquisition and
prior to the vote with respect to the proposed acquisition.
Rights Plan. On April 25, 1989, the Board of Directors of the Company
adopted a Shareholder Rights Plan pursuant to a Rights Agreement (the "Rights
Agreement"), which is an exhibit to the Registration Statement of which this
Prospectus is a part, entered into by and between the Company and a Cleveland,
Ohio bank, and declared a dividend distribution of one Right (as defined in the
Rights Agreement) for each
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outstanding Common Share, which was paid to shareholders on May 10, 1989. The
Rights are also issuable to all holders of Common Shares issued after May 10,
1989. The Rights are not exercisable until the earlier to occur of (i) ten days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding Common Shares of the Company or (ii) ten business
days following the commencement of, or announcement of an intention to make a
tender offer or exchange offer for 20% or more of the outstanding Common Shares
of the Company (the earlier of such dates being called the "Distribution Date").
Once exercisable, each Right entitles the registered holder to purchase from the
Company one Common Share at the then-current exercise price per Common Share,
which currently is $11.85.
In the event that the Company is acquired in a merger or other business
combination transaction, or 50% or more of its consolidated assets or earning
power are sold, proper provision shall be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of Common Shares of the
acquiring company which at the time of such transaction would have a market
value of two times the exercise price of the Right. In the event that (i) any
person becomes an Acquiring Person (unless such person first acquires 20% or
more of the outstanding Common Shares by a purchase pursuant to a tender offer
for all of the Common Shares for cash, which purchase increases such person's
beneficial ownership to 80% or more of the outstanding Common Shares) or (ii)
during such time as there is an Acquiring Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
In addition, if a bidder who does not beneficially own more than 1% of the
Common Shares (and who has not within the past year owned in excess of 1% of the
Common Shares and, at a time he held such greater than 1% stake, disclosed, or
caused the disclosure of, an intention which relates to or would result in the
acquisition or influence of control of the Company) proposes to acquire all of
the Common Shares (and all other shares of capital stock of the Company entitled
to vote with the Common Shares in the election of directors or on mergers,
consolidations, sales of all or substantially all of the Company's assets,
liquidations, dissolutions or windings up) for cash at a price which a
nationally recognized investment banker selected by such bidder states in
writing is fair, and such bidder has obtained written financing commitments (or
otherwise has financing) and complies with certain procedural requirements, then
the Company, upon the request of the bidder, will hold a special shareholders
meeting to vote on a resolution requesting the Board of Directors to accept the
bidder's proposal. If a majority of the outstanding shares entitled to vote on
the proposal vote in favor of such resolution, then for a period of 60 days
after such meeting the Rights will be automatically redeemed at the Redemption
Price immediately prior to the consummation of any tender offer for all of such
shares at a price per share in cash equal to or greater than the price offered
by such bidder; provided, however, that no redemption will be permitted or
required after the acquisition by any person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Shares. The Rights, which have no voting power, will expire on May 10,
1999 unless earlier redeemed by the Company as described above.
Director and Officer Indemnification. The Company's Code contains
provisions indemnifying directors and officers of the Company to the fullest
extent permitted by law and providing for the advancement of expenses incurred
in connection with an action upon the receipt of an appropriate undertaking to
repay said amount if it is determined that the individual in question is not
entitled to indemnification. The Company has also entered into indemnity
agreements pursuant to which it has agreed, among other things, to indemnify its
directors for settlement in derivative actions. The Company also has purchased a
Director and Officer liability insurance policy (the "D & O Insurance"), a copy
of which is an exhibit to the Company's Annual Report on Form 10-K.
15
<PAGE> 17
General. It is possible that the division of the Board of Directors of the
Company into classes provided for in the Code and the other provisions of the
Code discussed above, the heightened shareholder voting requirements applicable
to certain proposed business combination transactions, the provisions of Ohio
law, the Rights Plan and the Change of Control provisions of the Indenture may
discourage other persons from making a tender offer for or acquisitions of
substantial amounts of the Company's Common Shares. This could have an
incidental effect of inhibiting changes in management and may also prevent
temporary fluctuations in the market price of the Company's Common Shares which
often result from actual or rumored takeover attempts. In addition, the
indemnification provisions of the Code, certain indemnity agreements between
directors and officers and the Company and the D & O Insurance may have the
effect of reducing the likelihood of derivative litigation against directors and
deterring shareholders from bringing a lawsuit against directors for breach of
their duty of care, even though such an action, if successful, might otherwise
have benefitted the Company and the shareholders.
Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Common Shares is KeyCorp Shareholder Services, Inc., Cleveland, Ohio.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through Lazard Freres & Co. LLC or
other underwriters and also may sell Securities directly to other purchasers or
through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales of Common Shares offered hereby may be effected from time to time in
one or more transactions on the Nasdaq National Market or in negotiated
transactions or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at other negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the underwriters, dealers or agents may be required to make in
respect thereof.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
16
<PAGE> 18
The Debt Securities may or may not be listed on a national securities
exchange. Any Common Shares sold pursuant to a Prospectus Supplement will be
traded on the Nasdaq National Market. No assurances can be given that there will
be an active trading market for the Debt Securities.
VALIDITY OF SECURITIES
The validity of the Debt Securities and Common Shares will be passed upon
for the Company by Calfee, Halter & Griswold, Cleveland, Ohio, and for any
underwriters and agents by Sidley & Austin, Chicago, Illinois. William A.
Papenbrock, Esq., a partner of Calfee, Halter & Griswold, is the Secretary of
the Company.
EXPERTS
The consolidated financial statements and schedule of the Company
incorporated by reference and included in the Company's Annual Report (Form
10-K) for the year ended March 31, 1996, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon incorporated by
reference and included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
17
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale and distribution of securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimated except the
Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
SEC registration fee....................................................... $ 68,966
Blue sky fees and expenses................................................. 10,000
Printing and engraving expenses............................................ 30,000
Legal fees and expenses.................................................... 50,000
Accounting fees and expenses............................................... 50,000
Transfer agent and registrar............................................... 2,500
Trustee's fees and expenses................................................ 2,500
Miscellaneous.............................................................. 1,034
--------
Total.................................................................... $215,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13 of the Ohio Revised Code sets forth the conditions and
limitations governing the indemnification of officers, directors and other
persons. Section 1701.13 provides that a corporation shall have the power to
indemnify any person who was or is a party or threatened to be made a party to
any threatened, pending or contemplated action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation in a similar capacity with another corporation or
other entity, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement incurred in connection therewith if he or she acted
in good faith and in a manner that he or she reasonably believed to be in the
best interests of the corporation and, with respect to a criminal proceeding,
had no reasonable cause to believe that his or her conduct was unlawful. With
respect to a suit by or in the right of the corporation, indemnity may be
provided to the foregoing persons under Section 1701.13 on a basis similar to
that set forth above, except that no indemnity may be provided in respect of any
claim, issue or matter as to which such person has been adjudged to be liable to
the corporation unless and to the extent that the Court of Common Pleas or the
court in which such action, suit or proceeding was brought determines that
despite the adjudication of liability but in view of all the circumstances of
the case such person is entitled to indemnity for such expenses as the court
deems proper. Moreover, Section 1701.13 provides for mandatory indemnification
of a director, officer, employee or agent of the corporation to the extent that
such person has been successful in defense of any such action, suit or
proceeding and provides that a corporation shall pay the expenses of an officer
or director in defending an action, suit or proceeding upon receipt of an
undertaking to repay such amounts if it is ultimately determined that such
person is not entitled to be indemnified. Section 1701.13 establishes provisions
for determining whether a given person is entitled to indemnification, and also
provides that the indemnification provided by or granted under Section 1701.13
is not exclusive of any rights to indemnity or advancement of expenses to which
such person may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise.
Under certain circumstances provided in Article VIII of the Registrant's
Code of Regulations , as amended, and subject to Section 1701.13 of the Ohio
Revised Code (which sets forth the conditions and limitations governing the
indemnification of officers, directors and other persons), the Registrant will
indemnify any director or officer or any former director or officer of the
Registrant against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him or
II-1
<PAGE> 20
her by reason of the fact that he or she is or was such director or officer in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
The Registrant has entered into indemnity agreements (the "Indemnity
Agreements") with the current directors and executive officers of the Registrant
and expects to enter into similar agreements with any director or executive
officer elected or appointed in the future at the time of their election or
appointment. Pursuant to the Indemnity Agreements, the Registrant will indemnify
a director or executive officer of the Registrant (the "Indemnitee") if the
Indemnitee is a party to or otherwise involved in any legal proceeding by reason
of the fact that the Indemnitee is or was a director or executive officer of the
Registrant, or is or was serving at the request of the Registrant in certain
capacities with another entity, against all expenses, judgments, settlements,
fines and penalties, actually and reasonably incurred by the Indemnitee, in
connection with the defense or settlement of such proceeding. Indemnity is only
available if the Indemnitee acted in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to, the best interests of the
Registrant. The same coverage is provided whether or not the suit or proceeding
is a derivative action. Derivative actions may be defined as actions brought by
one or more shareholders of a corporation to enforce a corporate right or to
prevent or remedy a wrong to the corporation in cases where the corporation,
because it is controlled by the wrongdoers or for other reasons, fails or
refuses to take appropriate action for its own protection. The Indemnity
Agreements mandate advancement of expenses to the Indemnitee if the Indemnitee
provides the Registrant with a written promise to repay the advanced amounts in
the event that it is determined that the conduct of the Indemnitee has not met
the applicable standard of conduct. In addition, the Indemnity Agreements
provide various procedures and presumptions in favor of the Indemnitee's right
to receive indemnification under the Indemnity Agreement.
Under the Registrant's Director and Officer Liability Insurance Policy,
each director and certain officers of the Registrant are insured against certain
liabilities.
ITEM 16. EXHIBITS.
See Exhibit Index at page E-1 of this Registration Statement.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in periodic reports filed
by Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement, unless the information required to be
included in such post-effective amendment is contained in periodic
reports filed by Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated herein by
reference;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the Securities offered
therein, and the offering of such Securities at that time shall be deemed
to be the initial bona fide offering thereof;
II-2
<PAGE> 21
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities and Exchange Act of 1934) that
is incorporated by reference in the Registration Statement relating to the
Securities offered therein, and the offering of such Securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
in Item 15 above, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted
against the Registrant by such director, officer or controlling person in
connection with the Securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, State of Ohio, on July 3, 1996.
PIONEER-STANDARD ELECTRONICS, INC.
By /s/ JAMES L. BAYMAN
James L. Bayman
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on July 3, 1996, by the following
persons in the capacities indicated:
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James L. Bayman, Arthur Rhein, John V.
Goodger and William A. Papenbrock, and each of them, such individual's true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for such individual and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any registration statement
related to the offering contemplated by this registration statement that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ JAMES L. BAYMAN President, Chief Executive Officer and
------------------------------- Director (Principal Executive Officer)
James L. Bayman
/s/ JOHN V. GOODGER Vice President, Treasurer and Assistant
------------------------------- Secretary (Principal Financial and Accounting Officer)
John V. Goodger
/s/ PRESTON B. HELLER, JR. Director
-------------------------------
Preston B. Heller, Jr.
Director
-------------------------------
Frederick A. Downey
/s/ VICTOR GELB Director
-------------------------------
Victor Gelb
------------------------------- Director
Gordon E. Heffern
/s/ ARTHUR RHEIN Director
-------------------------------
Arthur Rhein
/s/ EDWIN Z. SINGER Director
-------------------------------
Edwin Z. Singer
/s/ THOMAS C. SULLIVAN Director
-------------------------------
Thomas C. Sullivan
/s/ KARL E. WARE Director
-------------------------------
Karl E. Ware
</TABLE>
II-4
<PAGE> 23
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MARCH 31,
---------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Consolidated pre tax income.................. $43,639 $42,213 $31,703 $19,985 $ 8,542
Share of pretax income of 50%-owned
affiliate, net of equity pick-up........... 72 1,568 1,990 1,813 432
Interest..................................... 8,136 3,966 2,687 3,581 4,505
Share of interest expense of 50%-owned
affiliate.................................. 887 1,008 586 627 1,032
Interest portion of rental expense........... 1,408 965 721 659 646
Share of interest portion of rental expense
of 50%-owned affiliate..................... 277 405 361 382 361
------- ------- ------- ------- -------
Earnings.............................. $54,419 $50,125 $38,048 $27,047 $15,518
======= ======= ======= ======= =======
Interest..................................... $ 8,136 $ 3,966 $ 2,687 $ 3,581 $ 4,505
Share of interest expense of 50%-owned
affiliate.................................. 887 1,008 586 627 1,032
Interest portion of rental expense........... 1,408 965 721 659 646
Share of interest portion of rental expense
of 50%-owned affiliate..................... 277 405 361 382 361
------- ------- ------- ------- -------
Fixed charges...................... $10,708 $ 6,344 $ 4,355 $ 5,249 $ 6,544
======= ======= ======= ======= =======
Ratio of earnings to fixed
charges.......................... 5.08 7.90 8.74 5.15 2.37
======= ======= ======= ======= =======
</TABLE>
II-5
<PAGE> 24
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Pioneer-Standard
Electronics, Inc. for the registration of $200,000,000 of Debt Securities and
Common Shares and to the incorporation by reference therein of our reports dated
May 1, 1996, with respect to the consolidated financial statements and schedule
of Pioneer-Standard Electronics, Inc. incorporated by reference and included in
its Annual Report (Form 10-K) for the year ended March 31, 1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Cleveland, Ohio
July 1, 1996
II-6
<PAGE> 25
EXHIBIT 24.2
CONSENT OF COUNSEL
The consent of Calfee, Halter & Griswold is contained in their opinion
filed as Exhibit 5.1 to this Registration Statement.
II-7
<PAGE> 26
EXHIBIT 24.1
PIONEER-STANDARD ELECTRONICS, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Pioneer-Standard Electronics, Inc.
hereby constitutes and appoints James L. Bayman, Arthur Rhein, John V. Goodger
or William A. Papenbrock, or any one or more of them, its attorneys-in-fact and
agents, each with full power of substitution and resubstitution for it in any
and all capacities to sign any or all amendments or post-effective amendments to
this Registration Statement and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary in connection with such matters and hereby ratifying and confirming
all that each of such attorneys-in-fact and agents or his substitute or
substitutes may do or cause to be done by virtue hereof.
IT WITNESS WHEREOF, this Power of Attorney has been signed at Cleveland,
Ohio this 2nd day of July, 1996.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ JOHN GOODGER
--------------------------------
Vice President, Treasurer
and Assistant Secretary
II-8
<PAGE> 27
EXHIBIT 24.1
(CONTINUED)
PIONEER-STANDARD ELECTRONICS, INC.
CERTIFIED RESOLUTION
I, John V. Goodger, Assistant Secretary of Pioneer-Standard Electronics,
Inc., an Ohio corporation (the "Company"), do hereby certify that the following
is a true copy of a resolution adopted by the Board of Directors on July 2,
1996, and that the same has not been changed and remains in full force and
effect.
RESOLVED, that the Chairman, Chief Executive Officer and President and any
Vice President of the Company be and each of them is hereby authorized to
execute and to cause to be filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-3 (the "Registration Statement") covering the
Common Shares and the Debt Securities (the "Securities"), in such forms as the
officer or officers executing the Registration Statement shall determine , such
determination to be conclusively evidenced by the execution thereof by such
officer or officers, and thereafter from time to time to execute and cause to be
filed such amendments (including post-effective amendments) to the Registration
Statement and such supplements or amendments to any prospectus, prospectus
supplement or pricing supplement (whether or not included in such Registration
Statement) relating to the Securities as such officer or officers in his or
their discretion may deem necessary or advisable, in all cases together with all
schedules, exhibits, consents and other documents as the officer or officers so
acting may deem necessary or advisable to comply with the requirements of the
Act and the rules and regulations of the Commission thereunder, in order that
the Registration Statement shall become and remain effective.
/s/ JOHN V. GOODGER
----------------------
John V. Goodger,
Assistant Secretary
Dated: July 3, 1996
II-9
<PAGE> 28
PIONEER-STANDARD ELECTRONICS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ---------------------------------------------------------------------- ----------
<S> <C> <C>
1.1 Form of Underwriting Agreement for Debt Securities....................
4.1 Credit Agreement, dated as of November 30, 1995 by and among Pioneer-
Standard Electronics, Inc., Pioneer-Standard of Maryland, Inc., the
Banks identified on the signature pages thereto and National City
Bank, as Agent, which is incorporated by reference from the Form 8-K
dated December 13, 1995............................................... N/A
4.2 Rights Agreement dated as of April 25, 1989 by and between the Company
and AmeriTrust Company National Association, which is incorporated
herein by reference from the Company's Annual Report on Form 10-K for
the year ended March 31, 1989......................................... N/A
4.3 Note Purchase Agreement dated as of October 31, 1990 by and between
the Company and Teachers Insurance and Annuity Association of America,
which is incorporated herein by reference from the Company's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1990........... N/A
4.4 Amendment No. 1 to Note Purchase Agreement dated as of November 1,
1991 by and between the Company and Teachers Insurance and Annuity
Association of America, which is incorporated herein by reference from
the Company's Annual Report on Form 10-K for the year ended March 31,
1993.................................................................. N/A
4.5 Amendment No. 2 to Note Purchase Agreement dated as of November 30,
1995 by and between the Company and Teachers Insurance and Annuity
Association of America, which is incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended March 31,
1996.................................................................. N/A
4.6 Form of Indenture with respect to the Debt Securities covered by the
Registration Statement................................................
4.7 Form of Debt Securities covered by the Registration Statement
(included in Exhibit 4.6).............................................
5.1 Opinion of Calfee, Halter & Griswold with respect to the validity of
the Debt Securities...................................................
10.1 Share Subscription Agreement and Trust, effective July 2, 1996,
between the Company and Wachovia Bank of North Carolina, N.A..........
12.1 Computation of ratio of earnings to fixed charges (See page II-5 of
this Registration Statement.).........................................
23.1 Consent of Ernst & Young LLP (See page II-6 of this Registration
Statement.)...........................................................
23.2 Consent of Calfee, Halter & Griswold (See page II-7 of this
Registration Statement.)..............................................
24.1 Power of Attorney and related certified resolution (See page II-8 and
II-9 of this Registration Statement.).................................
25.1 Form T-1 Statement of Eligibility and Qualification of Star Bank,
N.A...................................................................
99.1 Certificate of Insurance Policy effective November 1, 1996 between
Chubb Group of Insurance Companies and Pioneer-Standard Electronics,
Inc., which is incorporated by reference from the Company's Annual
Report on Form 10-K for the year ended March 31, 1996................. N/A
</TABLE>
E-1
<PAGE> 1
EXHIBIT 1.1
$__________________
PIONEER-STANDARD ELECTRONICS, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
__________ ___, 1996
Lazard Freres & Co. LLC
One Rockefeller Plaza
New York, New York 10020
Dear Sirs:
SECTION 1. Introduction. Pioneer-Standard Electronics, Inc.,
an Ohio corporation (the "Company"), proposes to issue and sell to Lazard Freres
& Co. LLC (the "Underwriter") an aggregate of $_____________ principal amount of
its debt securities (the "Securities") The Securities are to be issued pursuant
to the provisions of an Indenture dated as of __________, 1996 (hereinafter
called the "Indenture"), between the Company and Star Bank, N.A., as Trustee
(the "Trustee"). The Company hereby agrees with the Underwriter as follows:
SECTION 2. Representations, Warranties and Agreements
of the Company. The Company represents and warrants to, and
agrees with, the Underwriter that:
(a) A registration statement on Form S-3 (No. 333- _____),
including a prospectus, relating to the Securities has been filed with
the Securities and Exchange Commission (the "Commission"). Such
registration statement either (i) is not proposed to be amended and has
been declared effective under the Securities Act of 1933, as amended
(the "Act"), and any post-effective amendments filed with the
Commission prior to the execution and delivery of this Agreement have
been declared effective or (ii) is proposed to be amended by amendment
or post-effective amendment. For purposes of this Agreement, "Effective
Time" means, in the case of clause (i) in the preceding sentence, the
date and time as of which such registration statement or the most
recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement was declared effective by the
Commission or, in the case of clause (ii) in the preceding sentence,
the date and time as of which such registration statement, as amended
by such amendment or
<PAGE> 2
post-effective amendment, as the case may be, is declared effective by
the Commission. "Effective Date" means the date of the Effective Time.
If the Effective Time is prior to the execution and delivery of this
Agreement, no other document relating to such registration statement
has been filed with the Commission; and no proceeding for the purpose
of suspending such effectiveness has been initiated or threatened or,
to the knowledge of the Company, is contemplated by the Commission.
Such registration statement as amended at the Effective Time, including
all material incorporated by reference therein and all exhibits thereto
and including all information (if any) contained in a prospectus
subsequently filed with the Commission and deemed to be part of the
registration statement at the Effective Time pursuant to Rule 430A
under the Act, is hereinafter referred to as the "Registration
Statement," and the prospectus, in the form first filed pursuant to
Rule 424(b) under the Act ("Rule 424(b)") or, if no such filing is
required, as included in the Registration Statement, including all
material incorporated by reference in such prospectus is, hereinafter
referred to as the "Prospectus." The terms "supplement" and "amendment"
or "amend" as used in this Agreement shall include all documents
subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Commission thereunder (the "Exchange Act Rules and
Regulations") that are incorporated by reference in the Prospectus.
(Any preliminary prospectus included in such Registration Statement or
filed with the Commission pursuant to Rule 424(a) under the Act is
hereinafter referred to as a "Preliminary Prospectus.")
(b) If the Effective Time is prior to the execution and
delivery of this Agreement: (i) on the Effective Date, the Registration
Statement conformed, on the date of this Agreement, the Registration
Statement conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b), the Registration Statement and the Prospectus
will conform in all respects to the requirements of the Act and the
rules and regulations of the Commission thereunder (the "Rules and
Regulations") and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
thereunder (the "TIA Rules and Regulations"), (ii) on the Effective
Date, neither the Registration Statement nor the Prospectus included
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any amendment to the
Registration Statement, as of its date and as of its effective date,
did not and will not include any untrue statement of material fact or
omit to state any material fact required to be stated therein or
necessary to
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<PAGE> 3
make the statements therein not misleading and (iv) the Prospectus on
the date of this Agreement, as of its date, as of the date of any
amendment or supplement thereto, and as amended or supplemented at the
Closing Date (as defined in Section 3), does not and will not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If the
Effective Time is subsequent to the execution and delivery of this
Agreement: (i) on the Effective Date, the Registration Statement and
the Prospectus will conform in all respects to the requirements of the
Act and the Rules and Regulations and the Trust Indenture Act and the
TIA Rules and Regulations, and neither the Registration Statement nor
the Prospectus will include any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any
amendment to the Registration Statement, as of its date and as of its
effective date, will not include any untrue statement of material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) the
Prospectus, as of its date, as of the date of any amendment or
supplement thereto, and as amended or supplemented at the Closing Date,
will not contain any untrue statement of any material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The foregoing representations and warranties do not
apply to statements or omissions in the Registration Statement or any
amendment thereto or the Prospectus, as amended or supplemented, if
applicable, based upon the information furnished to the Company by the
Underwriter specified in Section 8(a).
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all respects to the requirements of the Act
and the Rules and Regulations and the Exchange Act and the Exchange Act
Rules and Regulations, as applicable, and none of such documents when
they became effective or were so filed, as the case may be, contained
any untrue statement of any material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act and the Rules and
Regulations and
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<PAGE> 4
the Exchange Act and the Exchange Act Rules and Regulations, as
applicable, and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(d) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and no
proceedings for that purpose shall have been instituted or threatened
or, to the knowledge of the Company, contemplated by the Commission,
and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and
the Rules and Regulations and the Trust Indenture Act and the TIA Rules
and Regulations, and did not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with the information furnished to the
Company by the Underwriter as specified in Section 8(a).
(e) The consolidated financial statements included in the
Registration Statement and Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as
of the dates indicated and the results of their operations and the
statements of their cash flows for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved, except as indicated therein; and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein.
(f) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse change
in the condition, financial or otherwise, earnings, business or
prospects of the Company and its subsidiaries considered as a whole,
whether or not arising in the ordinary course of business, and (ii)
there have been no material transactions entered into by the Company or
any of its subsidiaries other than those in the ordinary course of
business.
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio with power and authority to own, lease and operate its
properties and conduct its business as
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<PAGE> 5
described in the Registration Statement and Prospectus; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its subsidiaries considered as a whole.
(h) Each of the subsidiaries of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the Prospectus
and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which it owns or leases
real property or in which the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its subsidiaries considered as a whole; all of the issued
and outstanding capital stock of each subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable, and
all such capital stock of each subsidiary is owned, directly or through
subsidiaries, by the Company, free and clear of any mortgage, pledge,
lien, encumbrance, adverse claim or equity.
(i) Neither the Company nor any of its subsidiaries is (i) in
violation of its or any of their charters or codes of regulation or
bylaws, as the case may be, or other organizational documents or (ii)
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any
of them or their properties may be bound, except in the case of (ii)
above, where such default would not, individually or in the aggregate,
result in a material adverse change in (A) the condition, financial or
otherwise, earnings, business or prospects of the Company and its
subsidiaries taken as a whole, or (B) the ability of the Company and
any subsidiary to enter into, perform and effect the transactions
contemplated hereby; no consent, approval, authorization, order,
registration, filing or qualification of or with any court or
governmental authority or agency is required for the issue and sale of
the Securities as contemplated herein and in the Indenture or the
consummation by the Company of the transactions contemplated by this
Agreement and the Indenture, except
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<PAGE> 6
such as may be required under the Act and the Rules and Regulations,
the Trust Indenture Act and the TIA Rules and Regulations or state
securities or Blue Sky laws in connection with the distribution of the
Securities by the Underwriter; and the issue and sale of the Securities
as contemplated herein and in the Indenture, the execution and delivery
of this Agreement and the Indenture and the consummation of the
transactions contemplated herein and therein will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of, the
provisions of the charter or code of regulation of the Company or any
law, administrative regulation or administrative or court decree or
order applicable to the Company or any of its subsidiaries.
(j) The Company and its subsidiaries possess all certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, earnings, business or
prospects of the Company and its subsidiaries considered as a whole.
(k) Except as set forth in the Prospectus, as amended or
supplemented, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, contemplated or threatened against
the Company or any of its subsidiaries, which might result in any
material adverse change in the condition, financial or otherwise,
earnings, business or prospects of the Company and its subsidiaries
considered as a whole, or might materially and adversely affect the
properties or assets thereof or might adversely affect the lawful
issuance and offering of the Securities in the manner contemplated by
the Prospectus; and there are no material contracts or other documents
which are required to be described in the
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<PAGE> 7
Registration Statement or the Prospectus or filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations or by
the Trust Indenture Act or the TIA Rules and Regulations which have not
been so described or have not been so filed.
(l) Each of the Company and its subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by it, in each case
free and clear of all liens, encumbrances and defects except (i) such
as are referred to in the Prospectus or (ii) such as do not materially
and adversely affect the value of such property to the Company or such
subsidiary, and do not materially interfere with the use made and
proposed to be made of such property by the Company or such subsidiary;
and any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made by the Company and
its subsidiaries.
(m) The Company has an authorized capitalization as set forth
in the Prospectus, and the shares of capital stock of the Company
outstanding prior to the issuance of the Securities have been duly
authorized, are validly issued, fully paid and non-assessable and
conform to the description thereof contained in the Prospectus.
(n) This Agreement has been duly authorized, executed and
delivered by the Company.
(o) The Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement, has been duly
authorized and duly qualified under the Trust Indenture Act and when
executed and delivered by the Company and the Trustee, the Indenture
will have been duly authorized, executed and delivered by the Company
and will constitute a valid and legally binding agreement of the
Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Indenture will conform to the
description thereof in the Prospectus.
(p) The Securities have been duly authorized and, when
executed and authenticated in accordance with the terms of the
Indenture and issued and delivered in accordance with the terms of this
Agreement, will have been duly authorized, executed, authenticated,
issued and delivered by the Company, will constitute valid and binding
obligations of
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<PAGE> 8
the Company, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles, will conform to the description thereof
contained in the Prospectus, will be substantially in the form filed as
an exhibit to the Registration Statement, and will be entitled to the
benefits of the Indenture.
(q) There are no contracts, agreements or under standings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities under the
Registration Statement.
(r) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the Rules and Regulations.
(s) The Share Subscription Agreement and Trust, effective as
of July ___, 1996, between the Company and Wachovia Bank of North
Carolina, N.A., as Trustee (the "Subscription Trust"), has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company; the 5,000,000
Common Shares, without par value, of the Company (the "Shares") to be
issued pursuant to the terms of the Subscription Trust have been duly
authorized and when issued in accordance with the terms of the
Subscription Trust will be validly issued and outstanding; the Shares,
when paid for as provided by the Subscription Trust, will be fully paid
and non-assessable; and the Subscription Trust conforms to the
description thereof in the Prospectus.
SECTION 3. Purchase, Sale and Delivery of Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby agrees
to issue and sell to the Underwriter, and the Underwriter agrees to purchase
from the Company the Securities at ___% of their principal amount, plus accrued
interest, if any, to the Closing Date hereunder.
The Securities to be purchased by the Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in such
names as the Underwriter may request upon at least forty-eight hours prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Underwriter, against payment by the Underwriter of the purchase
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<PAGE> 9
price therefor by wire transfer in same day funds or by one or more certified or
official bank checks, payable to the order of the Company in New York Clearing
House or other same day funds, all at the office of Lazard Freres & Co. LLC, New
York, New York, at 9:30 a.m., New York City time, on ________, 1996 or at such
other time date as the Underwriter and the Company may agree upon in writing,
such time and date being herein called the "Closing Date." Certificates
representing the Securities will be made available for checking and packaging at
least twenty-four hours prior to the Closing Date at the office of the Trustee.
SECTION 4. Offering by the Underwriter. After the Registration
Statement becomes effective, the Underwriter will offer the Securities for sale
to the public on the terms and conditions as set forth in the Prospectus.
SECTION 5. Covenants of the Company. The Company covenants and
agrees with the Underwriter that:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Company will file the Prospectus with
the Commission pursuant to and in accordance with subparagraph (1) (or,
if applicable, and with the Underwriter's consent, subparagraph (4)) of
Rule 424(b) not later than the earlier of (i) the second business day
following the execution and delivery of this Agreement or (ii) if such
filing is made after the fifth business day after the Effective Date,
subparagraph (2) (or, if applicable and with the Underwriter's consent,
subparagraph (5)) of Rule 424(b). The Company will advise the
Underwriter promptly of any proposal to amend or supplement the
Registration Statement as filed, or the related Prospectus, prior to
the Closing Date, and will not effect such amendment or supplement
without the Underwriter's consent; the Company will also advise the
Underwriter promptly of the effectiveness of the Registration Statement
(if the Effective Time is subsequent to the execution and delivery of
this Agreement), of any amendment or supplement to the Registration
Statement or the Prospectus, and of receipt of notification of the
institution by the Commission of any stop order proceedings in respect
of the Registration Statement or of any order preventing or suspending
the use of any Preliminary Prospectus or any prospectus relating to the
Securities, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or of any request by
the Commission to amend or supplement the Registration Statement or
Prospectus or for additional information and will use its best efforts
to prevent the issuance of any such stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or any
prospectus relating to the Securities or
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<PAGE> 10
suspending any such qualification and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the Underwriter, include an untrue statement
of a material fact, or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Exchange
Act, the Trust Indenture Act or any other law, the Company promptly
will prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which
will effect such compliance and will notify the Underwriter and, upon
the Underwriter's request prepare and furnish without charge to the
Underwriter and to any dealer in securities as many copies as the
Underwriter may from time to time reasonably request, of an amended
Prospectus or a supplement to the Prospectus complying with Section
10(a) of the Act which will correct such statement or omission or
effect such compliance.
(c) The Company will make generally available to the Company's
security holders as soon as practicable an earnings statement covering
the twelve-month period ending __________, 1997 [one year after the end
of the Company's fiscal quarter in which the Closing Date occurs] that
satisfies the provisions of Section 11(a) of the Act and the Rules and
Regulations (including Rule 158).
(d) The Company will deliver to the Underwriter as many signed
and conformed copies of the Registration Statement (as originally
filed) and of each amendment thereto (including exhibits filed
therewith and documents incorporated therein by reference) as the
Underwriter may reasonably request and will also deliver to the
Underwriter a conformed copy of the Registration Statement and each
amendment thereto (including documents incorporated therein by
reference).
(e) The Company will take such action as the Underwriter may
reasonably request to qualify the Securities for offering and sale
under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriter may designate,
and will maintain such qualifications in effect for as long as may be
required for the distribution of the Securities. The Company will file
such statements and reports as may be required by the laws
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<PAGE> 11
of each jurisdiction in which the Securities have been qualified as
above provided.
(f) During the period of five years hereafter, the Company
will furnish to the Underwriter as soon as practicable after the end of
each fiscal year, a copy of its annual report to shareholders for such
year, and the Company will furnish to the Underwriter (i) as soon as
available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
shareholders and (ii) from time to time, such other information
concerning the Company as the Underwriter may reasonably request.
(g) During the period beginning from the date hereof and
continuing to and including the later of (i) the termination of trading
restrictions on the Securities, as notified to the Company by the
Underwriter, and (ii) the Closing Date, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after the Closing Date, without the
Underwriter's prior written consent.
(h) The Company, during the period when the prospectus
relating to the Securities is required to be delivered under the Act,
will file promptly all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act.
SECTION 6. Conditions of the Obligations of the Underwriter.
The obligations of the Underwriter to purchase and pay for the Securities on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein as of the date hereof and as of the
Closing Date with the same force and effect as if made as of that date, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not
later than 5:00 P.M., New York time, on the date of this Agreement, or
such later time or date as shall have been consented to by the
Underwriter. If the Effective Time is prior to the execution and
delivery of this Agreement, the Company shall have filed the Prospectus
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the Rules and Regulations and in
accordance with Section 5(a) hereof. In either case, prior to the
Closing Date no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened, or to the
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<PAGE> 12
knowledge of the Company or the Underwriter, shall be contemplated by
the Commission; and the Company shall have complied with all requests
for additional information on the part of the Commission to the
Underwriter's reasonable satisfaction.
(b) The Underwriter shall not have advised the Company that
the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains any untrue statement of fact or omits to
state any fact which, the Underwriter has concluded, is material and in
the case of an omission is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) The Underwriter shall have received a favorable opinion of
Calfee, Halter & Griswold, counsel for the Company, dated the Closing
Date, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio with power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus;
and the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which it owns or
leases real property.
(ii) Each of the subsidiaries of the Company has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has power and authority to own, lease and
operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, and is duly
qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which it owns or
leases real property; all of the issued and outstanding
capital stock of each subsidiary has been duly authorized and
validly issued and is fully paid and non-assessable, and all
of such capital stock is owned by the Company free and clear
of any pledge, lien, encumbrance, adverse claim or equity.
(iii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iv) The Securities have been duly and validly
authorized, executed, authenticated, issued and delivered and
constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy,
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<PAGE> 13
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles, conform to the description
thereof in the Prospectus and are entitled to the benefits of
the Indenture;
(v) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and
legally binding agreement of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles, conforms to the
description thereof in the Prospectus, and has been duly
qualified under the Trust Indenture Act.
(vi) The Registration Statement is effective under
the Act and, to the best of their knowledge and information,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued under the Act or
proceedings therefor initiated or threatened or are pending or
contemplated by the Commission.
(vii) Statements set forth in the Prospectus under
the headings ["The Company", "Use of Proceeds", "Description
of Debt Securities" and "Description of Capital Stock"] and in
the Registration Statement under Item 15 on Form S-3 insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein fairly present
the information called for with respect to such legal matters,
documents and proceedings.
(viii) No consent, approval, authorization, order,
filing, registration or qualification of or with any court or
governmental authority or agency is required for the issue and
sale of the Securities or the consummation of the transactions
contemplated by this Agreement, except such as may be required
and have been obtained under the Act and the Rules and
Regulations and the Trust Indenture Act and the TIA Rules and
Regulations and such as may be required under state securities
or Blue Sky laws in connection with the distribution of the
Securities by the Underwriter; and, the issue and sale of the
Securities, the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein will
not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any
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<PAGE> 14
lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any material
contract filed in response to paragraphs (4) and (10) of Item
601(b) of Regulation SK or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of, the
provisions of the charter or code of regulations of the
Company, or any law, administrative regulation or
administrative or court decree or order applicable to the
Company or any of its subsidiaries.
(ix) To our knowledge, (1) after having made due
inquiry, there is no governmental action or proceeding and no
litigation pending against the Company or any of its
subsidiaries which would adversely affect the lawful issuance
and offering of the Securities or that is required to be
described in the Registration Statement or Prospectus and is
not so described and (2) after having made due inquiry, there
are no material contracts or other documents that are required
to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required.
(x) Such counsel (1) is of the opinion that each
document incorporated by reference in the Registration
Statement and the Prospectus (other than the financial
statements and related schedules and other financial and
statistical data included therein, as to which no opinion need
be expressed) complied as to form when filed with the
Commission in all material respects with the Exchange Act and
the Exchange Act Rules and Regulations and did not contain any
untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were
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<PAGE> 15
made, not misleading; (2) is of the opinion that the
Registration Statement, as of the Effective Date, any
amendment to the Registration Statement, as of its date or as
of its effective date, and the Prospectus, as of the Effective
Date and as of its date (other than the financial statements
and related schedules and other financial and statistical data
included therein, as to which no opinion need be expressed)
complies as to form in all material respects with the
requirements of the Act and the Rules and Regulations and the
Trust Indenture Act and the TIA Rules and Regulations; and (3)
has no reason to believe that (other than the financial
statements and related schedules and other financial and
statistical data included therein, as to which no opinion need
be expressed) the Registration Statement, as of the Effective
Date, any amendment to the Registration Statement, as of its
date or as of its effective date, and the Prospectus, as of
the Effective Date, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading and that the Prospectus, as of its
date, as of the date of any amendment or supplement thereto,
and as amended or supplemented at the Closing Date, contained
or contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may: (i) rely
in respect of matters of fact upon certificates of
governmental officials and officers of the Company, provided
that such certificates have been attached to such opinion; and
(ii) state that they express opinions only as to the laws of
the United States of America and of the State of Ohio and
that, with respect to their opinion in clauses (iii) and (v),
they are assuming as to all matters of New York law (if any)
that the application of New York law to such matters would
have the same effect as would the application of the laws of
the State of Ohio to such matters if such matters were
governed by Ohio law. The opinions set forth above as to the
due incorporation of the Company's Pioneer-Standard of
Maryland, Inc. subsidiary in Maryland will be rendered by
Piper Marbury, L.L.P., or another acceptable Maryland law
firm. The opinion above as to the due incorporation of the
Company's Pioneer-Standard
-15-
<PAGE> 16
Canada Inc. subsidiary in Canada will be rendered by Blake,
Cassels & Graydon, or another acceptable Canada law firm.
Calfee, Halter & Groswold shall state that they believe that
the Underwriter is justified in relying upon such opinions
referred to in the previous two sentences.
(d) The Underwriter shall have received an opinion from each
of Piper Marbury, L.L.P., and Blake, Cassels & Graydon, each a counsel
for the Company, with respect to the due incorporation of
Pioneer-Standard of Maryland, Inc., and Pioneer Standard Canada Inc.,
respectively.
(e) The Underwriter shall have received from Sidley & Austin,
counsel for the Underwriter, an opinion, dated the Closing Date, with
respect to such matters as the Underwriter may reasonably request.
(f) The Underwriter shall have received from the President or
any Vice President and a principal financial or accounting officer of
the Company a certificate, dated the Closing Date, in which such
officers, to the best of their knowledge and after reasonable
investigation, shall state that there has not been, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) any material adverse change in the
condition, financial or otherwise, earnings, business or prospects of
the Company and its subsidiaries considered as a whole, whether or not
arising in the ordinary course of business or (ii) any material
transactions entered into by the Company or any of its subsidiaries
other than those in the ordinary course of business, except in the case
of clause (i) and clause (ii) as set forth in or contemplated by the
Prospectus; the representations and warranties of the Company contained
in Section 2 are true and correct with the same force and effect as
though made on and as of the Closing Date and the Company has complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened or are contemplated by the Commission.
(g) The Underwriter shall have received from Ernst & Young
LLP, independent public accountants, two letters, the first dated the
date of this Agreement and the other dated such Closing Date, addressed
to the Underwriter, substantially in the form of Annex I hereto with
such variations as are reasonably acceptable to the Underwriter.
-16-
<PAGE> 17
(h) At the Closing Date counsel for the Underwriter shall have
been furnished with such other documents and opinions as they may
reasonably require.
SECTION 7. Payment of Expenses. The Company will pay all
costs, expenses, fees, disbursements and taxes incident to (i) the preparation
by the Company, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), the Prospectus, each Preliminary
Prospectus and all amendments and supplements to any of them prior to or during
the period specified in Section 5(b), (ii) the preparation, printing (including
word processing and duplication costs) and delivery of this Agreement, the
Indenture, Preliminary and Supplemental Blue Sky Memoranda, Legal Investment
Survey, if any, and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Securities, (iii) the registration with the Commission, and the issuance by the
Company, of the Securities, (iv) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including the reasonable fees and disbursements of the
Underwriter's counsel relating to such registration or qualification), (v)
filings and clearance with the National Association of Securities Dealers, Inc.
in connection with the offering, (vi) any fees charged by securities rating
services for rating the Securities, (vii) the fees and expenses of the Trustee
and any agent of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities, and (viii) the
performance by the Company of its other obligations under this Agreement, and
all other costs and expenses incident to the performance of its obligations
hereunder in this Section 7.
If this Agreement is terminated by the Underwriter in
accordance with the provisions of Section 10 hereof, the Company shall not then
be under any liability to the Underwriter except as provided in Sections 7 and 8
hereof, but, if for any other reason the Securities are not delivered by or on
behalf of the Company as provided herein, the Company shall reimburse the
Underwriter for all of its out-of-pocket expenses reasonably incurred in
connection with marketing and preparing for the purchase, sale and delivery of
the Securities, including the reasonable fees and disbursements of counsel for
the Underwriter but the Company shall then be under no further liability to the
Underwriter except as provided in Sections 7 and 8 hereof.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act, from and against any
-17-
<PAGE> 18
and all losses, claims, damages and liabilities (or actions in respect
thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or
defending any action, suit or proceeding or any claim asserted, as such
expenses are incurred) arising out of or based on any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus
or any other prospectus with respect to the Securities, or caused by
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon the
information furnished to the Company in writing by the Underwriter in
the Prospectus concerning the terms of the offering by the Underwriter;
and provided, further, that the Company shall not be liable to the
Underwriter under this subsection (a) for any such loss, claim, damage
or liability arising from any Preliminary Prospectus or the Prospectus
to the extent that such loss, claim, damage or liability results from
the fact that such Underwriter sold Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus as then amended or supplemented,
excluding documents incorporated therein by reference, in any case
where (i) such delivery of the Prospectus as then amended or
supplemented to such person is required by the Act, (ii) the Company
has previously furnished sufficient copies thereof to such Underwriter
at such time as is sufficient to permit such delivery prior to such
confirmation and (iii) the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material
fact contained in the Preliminary Prospectus or the Prospectus which
was corrected in the Prospectus as amended or supplemented, excluding
documents incorporated therein by reference. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have to the persons referred to above in this Section 8(a).
(b) The Underwriter agrees to indemnify and hold harmless the
Company, the directors of the Company, the officers of the Company who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or caused
-18-
<PAGE> 19
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to the information
furnished to the Company by the Underwriter set forth in the first
sentence of Section 8(a). This indemnity agreement will be in addition
to any liability which the Underwriter may otherwise have to the
persons referred to above in this Section 8(b).
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to any of the two preceding paragraphs, such person
(hereinafter called the indemnified party) shall promptly notify the
person against whom such indemnity may be sought (hereinafter called
the indemnifying party) in writing; however, the omission to so notify
the indemnifying party shall relieve the indemnifying party from
liability under the two preceding paragraphs only to the extent
prejudiced thereby. The indemnifying party, upon request of the
indemnified party, shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified party
to represent the indemnified party and any others that the indemnifying
party may designate and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such action or proceeding
any indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the reasonable fees and
expenses of more than one separate firm (in addition to any local
counsel) for the Underwriter and all persons, if any, who control the
Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, and (b) the reasonable fees and
expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case
of any such separate firm for the Underwriter and such control persons
of the Underwriter, such firm shall be designated in writing by the
Underwriter.
-19-
<PAGE> 20
In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. The Company shall not, without
the prior written consent of any indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which
any such indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 8 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriter on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law or if the indemnified party shall have
failed to the prejudice of the indemnifying party to give the notice
required by Section 8(c), in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriter on the other shall be deemed to be in the same proportions
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of
the Company on the one hand and the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
-20-
<PAGE> 21
(e) The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to Section 8(d) were
determined by pro rata allocation (even if the Underwriter were treated
as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in the
immediately preceding paragraph shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of Section 8(d), in no event shall the
Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which the Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
the Agreement, or contained in certificates of officers of the Company submitted
hereto, including indemnity and contribution agreements, shall remain operative
and in full force and effect, regardless of any termination of this Agreement,
or any investigation, or any statement as to the results thereof, made by or on
behalf of the Underwriter or any person controlling the Underwriter or by or on
behalf of the Company, its officers or directors or controlling persons, and
shall survive acceptance of and payment for Securities hereunder.
If this Agreement is terminated pursuant to Section 10 or if
for any reason the purchase of Securities by the Underwriter is not consummated,
the Company shall remain responsible for the reasonable expenses to be paid or
reimbursed by it pursuant to Section 7 and the respective obligations of the
Company and the Underwriter pursuant to Section 8 shall remain in effect.
SECTION 10. Termination. This Agreement may be terminated for
any reason at any time prior to the delivery and payment of the Securities on
the Closing Date by the Underwriter upon the giving of written notice of such
termination to the Company, if prior to such time (i) there has been, since the
-21-
<PAGE> 22
respective dates as of which information is given in the Registration Statement
and the Prospectus, (A) any material adverse change in the condition, financial
or otherwise, earnings, business or prospects of the Company and its
subsidiaries considered as a whole, whether or not arising in the ordinary
course of business or (B) any material transaction entered into by the Company
or any subsidiary other than in the ordinary course of business, or (ii) there
has occurred any outbreak or escalation of hostilities or other calamity or
crisis or material change in existing national or international financial,
political, economic or securities market conditions, the effect of which is such
as to make it, in the judgment of the Underwriter, impracticable or inadvisable
to market the Securities in the manner contemplated in the Prospectus or enforce
contracts for the sale of the Securities, or (iii) reporting of bid and asked
prices of the Common Shares of the Company has been suspended by the National
Association of Securities Dealers, Inc., or trading in the Common Shares of the
Company has been suspended by the Commission or a national securities exchange,
or trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal or New
York authorities or (iv) any downgrading shall have occurred in the rating
accorded any of the Company's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act or any organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities. In the event
of any such termination, the provisions of Section 7, the indemnity agreement
and contribution provisions set forth in Section 8, and the provisions of
Sections 9 and 12 shall remain in effect.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter c/o Lazard Freres & Co. LLC,
One Rockefeller Plaza, New York, NY 10020, Attention: Syndicate Department; and
notices to the Company shall be directed to it at 4800 East 131st Street,
Cleveland, OH 44105, facsimile transmission no. 216/587-3563, attention of the
Secretary with copy to the Treasurer.
SECTION 12. Parties. This Agreement shall inure to the benefit
of and be binding upon the Company, its directors and officers who signed the
Registration Statement, the Underwriter, any controlling persons referred to
herein and their respective
-22-
<PAGE> 23
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New York.
SECTION 14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
-23-
<PAGE> 24
If the foregoing is in accordance with the Underwriter's understanding of our
agreement, please sign this Agreement and return to us two counterparts hereof.
Very truly yours,
PIONEER-STANDARD ELECTRONICS, INC.
By:__________________________________________
Name:
Title:
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
By:_________________________________
Name:
Title:
-24-
<PAGE> 25
ANNEX I
[FORM OF ANNEX I DESCRIPTION OF COMFORT
LETTER FOR REGISTRATION STATEMENTS ON FORM S-1]
Pursuant to Section 6(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published Rules and Regulations; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited consolidated
interim financial statements, selected financial data, pro forma
financial information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports attached to such letters, copies of which
have been furnished to the Underwriter;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Board of Directors and the
committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
-25-
<PAGE> 26
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations, or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in
paragraph (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to
in paragraph (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated
financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published Rules and
Regulations or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and share appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and
-26-
<PAGE> 27
its subsidiaries, or any decreases in consolidated net current
assets or net assets or other items specified by the
Underwriter, or any increases in any items specified by the
Underwriter, in each case as compared with amounts shown in
the latest balance sheet included in the Prospectus, except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in paragraph (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Underwriter, or any increases in
any items specified by the Underwriter, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Underwriter, except in each case for decreases or increases
which the Prospectus discloses have occurred or may occur or
which are described in such letter;
(G) certain sections of the Prospectus did not comply
in all material respects with the disclosure obligations under
Regulation S-K under the Act (e.g., "Selected Financial Data"
(Item 301), "Supplementary Financial Information" (Item 302),
"Ratio of Earnings to Fixed Charges" (Item 503(d)) and
"Executive Compensation" (Item 402);
(iv) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriter,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus, or in Part II of,
or in exhibits and schedules to, the Registration Statement specified
by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
-27-
<PAGE> 1
EXHIBIT 4.6
- -------------------------------------------------------------------------------
PIONEER-STANDARD ELECTRONICS, INC.,
AS ISSUER
TO
STAR BANK, N.A.,
AS TRUSTEE
--------------------
INDENTURE
SENIOR DEBT SECURITIES
DATED AS OF ____________, 1996
--------------------
- -------------------------------------------------------------------------------
<PAGE> 2
PIONEER-STANDARD ELECTRONICS, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ______________, 1996
<TABLE>
<CAPTION>
TRUST INDENTURE
INDENTURE SECTION
ACT SECTION
<S> <C> <C>
Section 310(a)(1).................................................................... 609
(a)(2).................................................................... 609
(a)(3).................................................................... Not Applicable
(a)(4).................................................................... Not Applicable
(b)....................................................................... 608,610
Section 311(a)....................................................................... 613
(b)....................................................................... 613
(b)(2).................................................................... 703(a), 703(b)
Section 312(a)....................................................................... 701, 702(a)
(b)....................................................................... 702(b)
(c)....................................................................... 702(c)
Section 313(a)....................................................................... 703(a)
(b)....................................................................... 703(b)
(c)....................................................................... 703(a), 703(b)
(d)....................................................................... 703(b)
Section 314(a)....................................................................... 704, 1006, 1007
(b)....................................................................... Not Applicable
(c)(1).................................................................... 102
(c)(2).................................................................... 102
(c)(3).................................................................... Not Applicable
(d)....................................................................... Not Applicable
(e)....................................................................... 102
Section 315(a)....................................................................... 601(a)
(b)....................................................................... 602, 703(a)
(c)....................................................................... 601(b)
(d)....................................................................... 601(c)
(d)(1).................................................................... 601(a), 601(c)
(d)(2).................................................................... 601(c)
(d)(3).................................................................... 601(c)
(e)....................................................................... 514
Section 316(a)....................................................................... 101
(a)(1)(A)................................................................. 512
(a)(1)(B)................................................................. 502, 513
(a)(2).................................................................... Not Applicable
(b)....................................................................... 508
Section 317(a)(1).................................................................... 503
(a)(2).................................................................... 504
(b)....................................................................... 1009
(c)....................................................................... 104(c)
Section 318(a)....................................................................... 107
</TABLE>
- --------------------
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C> <C>
RECITALS OF THE COMPANY......................................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION...................................................................... 1
SECTION 101. Definitions.............................................................................. 1
Acquiring Person.............................................................................. 2
Act ..................................................................................... 2
Affiliate..................................................................................... 2
Attributable Debt............................................................................. 2
Authenticating Agent.......................................................................... 3
Bankruptcy Law................................................................................ 3
Board of Directors............................................................................ 3
Board Resolution.............................................................................. 3
Business Day.................................................................................. 3
Capital Stock................................................................................. 3
Change of Control............................................................................. 3
Change of Control Date, Change of Control Offer and
Change of Control Payment Date.............................................................. 3
Commission.................................................................................... 3
Common Depositary............................................................................. 3
Company ..................................................................................... 4
Company Request or Company Order.............................................................. 4
Consolidated Net Tangible Assets.............................................................. 4
Continuing Director........................................................................... 4
Corporate Trust Office........................................................................ 4
Covenant defeasance........................................................................... 4
Custodian..................................................................................... 5
Default ..................................................................................... 5
Defaulted Interest............................................................................ 5
Defeasance.................................................................................... 5
Dollars and $................................................................................. 5
Event of Default.............................................................................. 5
Exchange Act.................................................................................. 5
GAAP ..................................................................................... 5
Holder or Securityholder...................................................................... 5
Indebtedness.................................................................................. 5
Indenture..................................................................................... 5
Interest ..................................................................................... 5
Interest Payment Date......................................................................... 5
Judgment Currency............................................................................. 5
Maturity ..................................................................................... 5
Mortgage ..................................................................................... 6
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New York Banking Day......................................................................... 6
Officer .................................................................................... 6
Officer's Certificate........................................................................ 6
Opinion of Counsel........................................................................... 6
Original Issue Discount Security............................................................. 6
Outstanding.................................................................................. 6
Paying Agent................................................................................. 7
Person .................................................................................... 7
Place of Payment............................................................................. 7
Principal Property........................................................................... 7
Redemption Date.............................................................................. 8
Redemption Price............................................................................. 8
Registered Security.......................................................................... 8
Regular Record Date.......................................................................... 8
Required Currency............................................................................ 8
Responsible Officer.......................................................................... 8
Restricted Subsidiaries...................................................................... 8
Sale and Leaseback Transaction............................................................... 9
Securities................................................................................... 9
Security Register and Security Registrar..................................................... 9
Special Record Date.......................................................................... 9
Stated Maturity.............................................................................. 9
Subsidiary................................................................................... 9
Trustee .................................................................................... 9
Trust Indenture Act.......................................................................... 9
U.S. Depositary.............................................................................. 10
U.S. Government Obligations.................................................................. 10
Vice President............................................................................... 10
SECTION 102. Compliance Certificates and Opinions................................................... 10
SECTION 103. Form of Documents Delivered to Trustee................................................. 11
SECTION 104. Acts of Holders........................................................................ 12
SECTION 105. Notices, Etc., to Trustee and Company.................................................. 13
SECTION 106. Notice to Holders; Waiver.............................................................. 13
SECTION 107. Conflict with Trust Indenture Act...................................................... 14
SECTION 108. Effect of Headings and Table of Contents............................................... 14
SECTION 109. Successors and Assigns................................................................. 14
SECTION 110. Separability Clause.................................................................... 15
SECTION 111. Benefits of Indenture.................................................................. 15
SECTION 112. Governing Law.......................................................................... 15
SECTION 113. Legal Holidays......................................................................... 15
SECTION 114. No Recourse Against Others............................................................. 15
SECTION 115. Judgment Currency...................................................................... 15
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ARTICLE TWO
SECURITY FORMS........................................................................................ 16
SECTION 201. Forms Generally........................................................................ 16
SECTION 202. Form of Face of Security............................................................... 17
SECTION 203. Form of Reverse of Security............................................................ 19
SECTION 204. Form of Trustee's Certificate of
Authentication....................................................................... 25
SECTION 205. Securities in Global Form.............................................................. 25
SECTION 206. CUSIP Number........................................................................... 26
SECTION 207. Form of Legend for the Securities in
Global Form.......................................................................... 26
ARTICLE THREE
THE SECURITIES........................................................................................ 27
SECTION 301. Amount Unlimited; Issuable in Series................................................... 27
SECTION 302. Denominations.......................................................................... 29
SECTION 303. Execution, Authentication, Delivery and
Dating............................................................................... 29
SECTION 304. Temporary Securities................................................................... 31
SECTION 305. Registration, Registration of Transfer
and Exchange......................................................................... 32
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities........................................................................... 34
SECTION 307. Payment of Interest; Interest Rights
Preserved............................................................................ 35
SECTION 308. Persons Deemed Owners.................................................................. 36
SECTION 309. Cancellation........................................................................... 37
SECTION 310. Computation of Interest................................................................ 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE............................................................................ 38
SECTION 401. Satisfaction and Discharge of Indenture................................................ 38
SECTION 402. Application of Trust Money............................................................. 39
ARTICLE FIVE
REMEDIES.............................................................................................. 39
SECTION 501. Events of Default...................................................................... 39
SECTION 502. Acceleration of Maturity; Rescission
and Annulment........................................................................ 41
SECTION 503. Collection of Indebtedness and Suits
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for Enforcement by Trustee........................................................... 42
SECTION 504. Trustee May File Proofs of Claim....................................................... 43
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities............................................................... 44
SECTION 506. Application of Money Collected......................................................... 44
SECTION 507. Limitation on Suits.................................................................... 45
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest...................................................... 45
SECTION 509. Restoration of Rights and Remedies..................................................... 46
SECTION 510. Rights and Remedies Cumulative......................................................... 46
SECTION 511. Delay or Omission Not Waiver........................................................... 46
SECTION 512. Control by Holders..................................................................... 46
SECTION 513. Waiver of Past Defaults................................................................ 47
SECTION 514. Undertaking for Costs.................................................................. 47
ARTICLE SIX
THE TRUSTEE........................................................................................... 48
SECTION 601. Certain Duties and Responsibilities of the
Trustee.............................................................................. 48
SECTION 602. Notice of Defaults..................................................................... 48
SECTION 603. Certain Rights of Trustee.............................................................. 48
SECTION 604. Not Responsible for Recitals or Issuance
of Securities........................................................................ 50
SECTION 605. May Hold Securities.................................................................... 50
SECTION 606. Money Held in Trust.................................................................... 50
SECTION 607. Compensation and Reimbursement......................................................... 50
SECTION 608. Disqualification; Conflicting Interests................................................ 51
SECTION 609. Corporate Trustee Required; Eligibility................................................ 51
SECTION 610. Resignation and Removal; Appointment of
Successor............................................................................ 52
SECTION 611. Acceptance of Appointment by Successor................................................. 53
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business............................................................... 55
SECTION 613. Preferential Collection of Claims Against
Company.............................................................................. 55
SECTION 614. Appointment of Authenticating Agent.................................................... 55
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................................................... 57
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders................................................................. 57
SECTION 702. Preservation of Information; Communications to Holders................................. 58
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SECTION 703. Reports by Trustee........................................................................ 59
SECTION 704. Reports by Company........................................................................ 59
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ARTICLE EIGHT
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER........................................................ 60
SECTION 801. When Company May Merge, Etc............................................................ 60
SECTION 802. Opinion of Counsel..................................................................... 61
SECTION 803. Successor Corporation Substituted...................................................... 61
ARTICLE NINE
SUPPLEMENTAL INDENTURES............................................................................... 62
SECTION 901. Supplemental Indentures Without Consent
of Holders........................................................................... 62
SECTION 902. Supplemental Indentures with Consent
of Holders........................................................................... 63
SECTION 903. Execution of Supplemental Indentures................................................... 64
SECTION 904. Effect of Supplemental Indentures...................................................... 65
SECTION 905. Conformity with Trust Indenture Act.................................................... 65
SECTION 906. Reference in Securities to Supplemental
Indentures........................................................................... 65
ARTICLE TEN
COVENANTS............................................................................................. 65
SECTION 1001. Payments of Securities................................................................. 65
SECTION 1002. Maintenance of Office or Agency........................................................ 65
SECTION 1003. Corporate Existence.................................................................... 66
SECTION 1004. Payment of Taxes and Other Claims...................................................... 66
SECTION 1005. Maintenance of Properties.............................................................. 67
SECTION 1006. Compliance Certificates................................................................ 67
SECTION 1007. Commission Reports..................................................................... 68
SECTION 1008. Waiver of Stay, Extension or Usury Laws................................................ 69
SECTION 1009. Money for Securities Payments to Be
Held in Trust........................................................................ 69
SECTION 1010. Restrictions on Secured Debt........................................................... 71
SECTION 1011. Restrictions on Sale and Leaseback
Transactions......................................................................... 74
SECTION 1012. Restrictions on Indebtedness of
Restricted Subsidiaries.............................................................. 74
SECTION 1013. Change of Control...................................................................... 75
SECTION 1014. Statement by Officers as to Default.................................................... 77
SECTION 1015. Waiver of Certain Covenants............................................................ 77
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES.............................................................................. 78
SECTION 1101. Applicability of Article............................................................... 78
SECTION 1102. Election to Redeem; Notice to Trustee.................................................. 78
SECTION 1103. Selection by Trustee of Securities to
Be Redeemed.......................................................................... 78
SECTION 1104. Notice of Redemption................................................................... 79
SECTION 1105. Deposit of Redemption Price............................................................ 80
SECTION 1106. Securities Payable on Redemption Date.................................................. 80
SECTION 1107. Securities Redeemed in Part............................................................ 80
ARTICLE TWELVE
SINKING FUNDS......................................................................................... 81
SECTION 1201. Applicability of Article............................................................... 81
SECTION 1202. Satisfaction of Sinking Fund Payments
with Securities...................................................................... 81
SECTION 1203. Redemption of Securities for Sinking
Fund................................................................................. 81
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE.................................................................... 82
SECTION 1301. Applicability of Article; Company's Option
to Effect Defeasance or Covenant
Defeasance........................................................................... 82
SECTION 1302. Defeasance and Discharge............................................................... 82
SECTION 1303. Covenant Defeasance.................................................................... 83
SECTION 1304. Conditions to Defeasance or Covenant
Defeasance........................................................................... 83
SECTION 1305. Deposited Money and Government Obligations
To Be Held In Trust.................................................................. 85
ARTICLE FOURTEEN
MISCELLANEOUS......................................................................................... 86
SECTION 1401. Miscellaneous.......................................................................... 86
Testimonium...........................................................................................
Signatures and Seals..................................................................................
Acknowledgments.......................................................................................
</TABLE>
<PAGE> 10
INDENTURE, dated as of ________________, 1996, between
PIONEER-STANDARD ELECTRONICS, INC., an Ohio corporation (herein called the
"COMPANY"), having its principal office at 4800 East 131st Street, Cleveland,
Ohio 44105, and Star Bank, N.A., a national banking association, as Trustee
(herein called the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"SECURITIES"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or defined by
Commission rule and not otherwise defined herein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(4) the word "INCLUDING" (and with correlative meaning
"INCLUDE") means including, without limiting the generality of, any
description preceding such term; and
(5) the words "HEREIN," "HEREOF" and "HEREUNDER" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
<PAGE> 11
"ACQUIRING PERSON" means any Person or group (as defined in
Section 13(d)(3) of the Exchange Act) who or which, together with all affiliates
and associates (as defined in Rule 12b-2 under the Exchange Act), becomes the
beneficial owner of common shares of the Company having more than 50% of the
total number of votes that may be cast for the election of directors of the
Company; provided, however, that an Acquiring Person shall not include (i) the
Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit plan
of the Company or any Subsidiary of the Company or any entity holding common
shares of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of common shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to more than 50% or more of the common shares
of the Company then outstanding; provided, however, that if a Person shall
become the beneficial owner of more than 50% or more of the common shares of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the beneficial owner of any
additional common shares of the Company, then such Person shall be deemed to be
an "Acquiring Person."
"ACT," when used with respect to any Holder, has the meaning
specified in Section 104.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback
Transaction means, as of any particular time, the present value (discounted at
the rate of interest implicit in the terms of the lease involved in such Sale
and Leaseback Transaction, as determined in good faith by the Company) of the
obligation of the lessee thereunder for rental payments (excluding, however, any
amounts required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges or any amounts required to be paid
by such lessee thereunder contingent upon the amount of sales, maintenance and
repairs, insurance, taxes, assessments water rates or similar charges) during
the remaining term of such lease (including any period for which such lease has
been extended or may, at the option of the lessor, be extended).
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"AUTHENTICATING AGENT" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate Securities.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the board of directors of the
Company; provided, however, that when the context refers to actions or
resolutions of the Board of Directors, then the term "Board of Directors" shall
also mean any duly authorized committee of the Board of Directors of the Company
or Officer authorized to act with respect to any particular matter to exercise
the power of the Board of Directors of the Company.
"BOARD RESOLUTION" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY," when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law or regulation to close.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, warrants, rights, options or other
equivalents (however designated) of capital stock or any other equity interest
of such Person, including each class of common stock and preferred stock.
"CHANGE OF CONTROL" means any event by which (i) an Acquiring
Person has become such, (ii) Continuing Directors cease to comprise a majority
of the members of the Board of Directors of the Company or (iii) all or
substantially all the properties and assets of the Company as an entirety or
substantially as an entirety are sold, assigned, transferred or leased.
"CHANGE OF CONTROL DATE", "CHANGE OF CONTROL OFFER" and
"CHANGE OF CONTROL PAYMENT DATE" shall have the respective meanings provided in
Section 1013.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"COMMON DEPOSITARY" has the meaning specified in
Section 304.
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"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Controller, an Assistant Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any particular
time, the total amount of assets (less applicable reserves) after deducting
therefrom (a) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed and excluding current maturities of long-term indebtedness), and (b)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangible assets, all as shown in the audited
consolidated balance sheet of the Company and Subsidiaries contained in the
Company's then most recent annual report to shareholders, except that assets
shall include an amount equal to the Attributable Debt in respect of any Sale
and Leaseback Transaction not capitalized on such balance sheet.
"CONTINUING DIRECTOR" means any member of the Board of
Directors, while such person is a member of such Board of Directors, who is not
an Acquiring Person, or an affiliate or associate of an Acquiring Person or a
representative of an Acquiring Person or of any such affiliate or associate and
who (a) was a member of the Board of Directors prior to the date of this
Indenture, or (b) subsequently becomes a member of such Board of Directors and
whose nomination for election or election to such Board of Directors is
recommended or approved by resolution of a majority of the Continuing Directors
or who is included as a nominee in a proxy statement of the Company distributed
when a majority of such Board of Directors consists of Continuing Directors.
"CORPORATE TRUST OFFICE" means the office of the Trustee in
Cincinnati, Ohio at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located at
425 Walnut Street, Cincinnati, Ohio 45201-1118.
"COVENANT DEFEASANCE" has the meaning specified in Section
1303.
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"CUSTODIAN" means any receiver, custodian, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFEASANCE" has the meaning specified in Section 1302.
"DOLLARS" and "$" means lawful money of the United States of
America.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
"GAAP" means such accounting principles as are generally
accepted in the United States of America as of the date or time of any
computation required hereunder.
"HOLDER" or "SECURITYHOLDER" means a Person in whose name a
Security is registered in the Security Register.
"INDEBTEDNESS" has the meaning specified in Section
1010.
"INDENTURE" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"INTEREST," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"INTEREST PAYMENT DATE," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"JUDGMENT CURRENCY" has the meaning specified in Section 115.
"MATURITY," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or
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<PAGE> 15
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"MORTGAGE" has the meaning specified in Section 1010.
"NEW YORK BANKING DAY" has the meaning specified in Section
115.
"OFFICER" means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be an employee of or counsel for the Company, and who shall be reasonably
acceptable to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"OUTSTANDING," when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Securities;
provided that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
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<PAGE> 16
(iv) Securities which have been defeased pursuant to Section
1302;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon the occurrence of an
Event of Default and the continuation thereof pursuant to the terms of such
Original Issue Discount Security as of the date of such determination and (b)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company. The Company may act as Paying Agent with respect to any
Securities issued hereunder.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities
of any series, means the place or places where the principal of (and premium, if
any) and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"PRINCIPAL PROPERTY" means any manufacturing or assembly plant
or warehouse owned at the date hereof or hereafter acquired by the Company or
any Restricted Subsidiary of the Company which is located within the United
States or Canada and the gross book value (including related land and
improvements thereon and all machinery and equipment included therein without
deduction of any depreciation reserves) of which on the date as of which the
determination is being made exceeds 2% of Consolidated Net Tangible Assets other
than (i) any such manufacturing or assembly plant or warehouse or any other real
property or any portion thereof (together with the land on which
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<PAGE> 17
it is erected and fixtures comprising a part thereof) which is financed by
industrial development bonds which are tax exempt pursuant to Section 103 of the
Internal Revenue Code of 1986, as amended (or which receive similar tax
treatment under any subsequent amendments thereof or any successor laws thereof
or under any other similar statute of the United States), (ii) any property
which in the opinion of the Board of Directors is not of material importance to
the total business conducted by the Company and its Restricted Subsidiaries
taken as a whole, or (iii) any portion of a particular property which is
similarly found not to be of material importance to the use or operation of such
property.
"REDEMPTION DATE," when used with respect to any Security of
any series to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE," when used with respect to any Security of
any series to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGISTERED SECURITY" means any Security issued hereunder and
registered in the Security Register.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 115.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any senior trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED SUBSIDIARIES" means any Subsidiary (a)
substantially all of the property of which is located, or substantially all of
the business of which is carried on, within the United States of America (other
than its territories or possessions and other than Puerto Rico) or Canada and
(b) which owns a Principal Property; provided, however, that any Subsidiary
which is principally engaged in financing operations outside the United States
of America or which is principally engaged in
-8-
<PAGE> 18
leasing or in financing installment receivables shall not be deemed a Restricted
Subsidiary for purposes of this Indenture.
"SALE AND LEASEBACK TRANSACTION" has the meaning specified in
Section 1011.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation of which at least a majority in interest of the outstanding Capital
Stock having by the terms thereof voting power under ordinary circumstances to
elect directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency, is at the time,
directly or indirectly, owned or controlled by such Person, or by one or more
other corporations a majority in interest of such stock of which is similarly
owned or controlled or by such Person and one or more other corporations a
majority in interest of such stock of which is similarly owned or controlled, or
(ii) any other Person (other than a corporation) in which such Person, directly
or indirectly, at the date of determination thereof, has at least a majority
equity ownership interest.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed;
provided, however, that in the event that such Act is amended after such date,
"TRUST INDENTURE ACT" means,
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<PAGE> 19
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
"U.S. DEPOSITARY" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more
permanent global Securities, the Person designated as U.S. Depositary by the
Company pursuant to Section 301, which must be a clearing agency registered
under the Exchange Act, until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" shall mean the U.S. Depositary with respect to the Securities of
that series.
"U.S. GOVERNMENT OBLIGATIONS" means securities which are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America which, in either case, are not
callable or redeemable at the option of the issuer thereof or otherwise subject
to prepayment, and shall also include a depository receipt issued by a New York
Clearing House bank or trust company as custodian with respect to any such U.S.
Government Obligation, or a specific payment or interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt or from any amount held by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"VICE PRESIDENT," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating
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<PAGE> 20
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
a. a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
b. a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
c. a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
d. a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
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<PAGE> 21
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved
by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request,
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<PAGE> 22
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
a. the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Trustee Administration, or
b. the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, attention:
Vice President, Treasurer and Assistant Secretary, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to
Holders of any event, such notice shall be deemed sufficiently given (unless
otherwise herein or in such Security expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event, at
his address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders or the validity of the proceedings to which such notice
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<PAGE> 23
relates. Where this Indenture or any Security provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included or deemed included in
this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, such provision of the Trust Indenture Act shall be deemed to apply to
this Indenture as so modified or shall be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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<PAGE> 24
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws (other than the choice of law provisions)
of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day or on such other day as may be set out in the Officer's
Certificate pursuant to Section 301 at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, if payment is made on such next succeeding Business Day or other
day set out in such Officer's Certificate.
SECTION 114. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder, by accepting
a Security, waives and releases all such liability. Such waivers and releases
are part of the consideration for the issuance of the Securities.
SECTION 115. Judgment Currency.
The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of obtaining
judgment in any court it is necessary to convert the sum due in respect of the
principal of, or premium or interest, if any, on the Securities of any series
(the "REQUIRED CURRENCY") into a currency in which a judgment will be rendered
(the "JUDGMENT CURRENCY"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in the
City of New York the Required
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<PAGE> 25
Currency with the Judgment Currency on the New York Banking Day preceding that
on which a final unappealable judgment is given and (b) its obligations under
this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "NEW YORK BANKING DAY" means any day except a Saturday, Sunday or a
legal holiday in the City of New York or a day on which banking institutions in
the City of New York are authorized or required by law or executive order to
close.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in
substantially the form set forth in this Article.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers
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<PAGE> 26
executing such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security,
insert--FOR PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN
SECTION 1273(a)(1) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-1(a)) WITH
RESPECT TO THIS SECURITY IS __________, THE ISSUE DATE (AS DEFINED IN SECTION
1275(a)(2) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-2(a)(2)) OF THIS
SECURITY IS __________, THE ISSUE PRICE (AS DEFINED IN SECTION 1273(b) OF THE
CODE AND TREASURY REGULATION 1.1273-2(a)) OF THIS SECURITY IS __________, AND
THE YIELD TO MATURITY (AS DEFINED IN TREASURY REGULATION SECTION 1.1272-1(b)) OF
THIS SECURITY IS __________.]
PIONEER-STANDARD ELECTRONICS, INC.
.........................
No.__________ $__________
PIONEER-STANDARD ELECTRONICS, INC., a corporation duly
organized and existing under the laws of Ohio(herein called the "Company," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ______________________ , or
registered assigns, the principal sum of _______________________ Dollars on
____________________ [If the Security is to bear interest prior to Maturity,
insert--, and to pay interest thereon from _________________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on ____________ and _______________ in each year, commencing
________________________, at the rate of _________% per annum, until the
principal hereof is paid or made available for payment [If applicable insert--,
and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of ____% per annum on any overdue principal and premium
and on any overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the _____ of _____
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
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<PAGE> 27
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert--any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ________, in
dollars [if applicable, insert--; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
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<PAGE> 28
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
PIONEER-STANDARD ELECTRONICS, INC.
By___________________________________________
Attest:
_____________________________ [SEAL]
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of ______________, 1996 (herein
called the "Indenture"), between the Company and Star Bank, N.A., as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
$______].
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 nor more than 45 days' notice by
first class mail, [if applicable, insert--(1) on _____________________ in any
year commencing with the year _______ and ending with the year _______ through
operation of the sinking fund for this series at a Redemption Price equal to
100% of the principal amount, and (2)] at any time [on or after ________,
________], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed [on or before __________, ______%, and if
redeemed] during the 12-month period beginning ________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<S> <C> <C> <C> <C>
</TABLE>
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<PAGE> 29
and thereafter at a Redemption Price equal to ______% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 nor more than 45 days' notice by
first class mail, (1) on __________ in any year commencing with the year
__________ and ending with the year __________ through operation of the sinking
fund for this series at the Redemption Prices for redemption through operation
of the sinking fund (expressed as percentages of the principal amount) set forth
in the table below, and (2) at any time [on or after _______________], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below:
If redeemed during a 12-month period beginning
_________________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------ -------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
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<PAGE> 30
[Notwithstanding the foregoing, the Company may not, prior to
_______, redeem any Securities of this series as contemplated by [clause (2) of]
the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than __% per annum.]
[The sinking fund for this series provides for the redemption
on _______ in each year beginning with the year _____ and ending with the year
_______ of [not less than] $____________ [("mandatory sinking fund") and not
more than $____________] aggregate principal amount of Securities of this
series.] [Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made--in
the inverse order in which they become due.]
[In the event of redemption of this Security in part only, a
new Security or Securities of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security,
insert -- If any Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal--insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture also provides that upon the occurrence of a
Change of Control, each Holder shall have the right to require the Company to
purchase such Holder's Securities at a price equal to 100% of the aggregate
principal amount of such Securities plus accrued and unpaid interest, if any, to
the date of such purchase.
[This Security is subject to defeasance as described in
the Indenture.]
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<PAGE> 31
The Indenture may be modified by the Company and the Trustee
without consent of any Holder with respect to certain matters as described in
the Indenture. In addition, the Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall bind such Holder and all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
Stated Maturity and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require
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payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture imposes certain limitations on the ability of
the Company to, among other things, merge or consolidate with any other Person
or sell, assign, transfer or lease all or substantially all of its properties or
assets. All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company under
this Security or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder, by accepting a
Security, waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of this Security.
[If applicable, insert -- Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures
("CUSIP"), the Company has caused CUSIP numbers to be printed on the Securities
of this series as a convenience to the Holders of the Securities of this series.
No representation is made as to the correctness or accuracy of such numbers as
printed on the Securities of this series and reliance may be placed only on the
other identification numbers printed hereon.]
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _______________ Your Signature:________________________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranty: ____________________________________
[Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Transfer Agent, which
requirements will include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Transfer Agent in addition
to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
Social Security Number or Taxpayer Identification
Number:__________________________________________
OPTION TO HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this
Security purchased by the Company pursuant to Section 1013 ("Change of Control
Offer") of the Indenture, check the applicable box:
/ / in whole / / in part
amount to be purchased: $_______________
Dated: ________________ Your Signature: _______________________________________
(Sign exactly as your
name appears on the other
side of this Security)
Signature Guaranty: ____________________________________
[Signature must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Transfer Agent, which
requirements will include membership or
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participation in STAMP or such other "signature guarantee
program" as may be determined by the Transfer Agent in
addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.]
Social Security Number or Taxpayer Identification
Number: _________________________________________
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated: ________________
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
STAR BANK, N.A.
As Trustee
By ________________________________
Authorized Signatory
SECTION 205. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated
by Section 301, then, notwithstanding the provisions of Section 302, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be changed to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 303 or
Section 304. Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of Section 309 shall apply to any Security represented
by a Security in global form if such
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Security was never issued and sold by the Company and the Company delivers to
the Trustee the Security in global form together with written instructions
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) with regard to the reduction in the principal amount of
Securities represented thereby.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal or any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security.
SECTION 206. CUSIP Number
The Company in issuing Securities of any series may use a "CUSIP"
number, and if so, the Trustee may use the CUSIP number in notices of redemption
or exchange as a convenience to Holders of such series; provided, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed on the notice or on the Securities of such
series, and that reliance may be placed only on the other identification numbers
printed on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP number of any series of Securities.
SECTION 207. Form of Legend for the Securities in Global Form.
Any Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Common Depositary or
a U.S. Depositary. Unless and until it is exchanged in whole or in part for
Securities in certificated form, this Security may not be transferred except as
a whole by the Common Depositary or a U.S. Depositary or by a nominee of the
Common Depositary or a nominee of the U.S. Depositary as the case may be."
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<PAGE> 36
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
Prior to the issuance of Securities of any series, there shall be established in
or pursuant to (i) a Board Resolution, and set forth in an Officer's
Certificate, or (ii) one or more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Sections 304, 305, 306, 906 or
1107);
(3) whether any Securities of the series are to be issuable in
permanent global form with or without coupons and, if so, (i) whether
beneficial owners of interests in any such permanent global Security
may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305, and (ii) the name of the Common Depositary (as
defined in Section 304) or the U.S. Depositary, as the case may be,
with respect to any global Security;
(4) the date or dates on which the principal of the Securities
of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest shall
be payable and the Regular Record Date for the interest payable on any
Interest Payment Date;
(6) the place or places where the principal of (and premium,
if any) and interest on Securities of the series shall be payable;
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(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or mandatory redemption or otherwise;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation, and, where applicable, the obligation of the Company to
select the Securities to be redeemed;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502;
(11) additional Events of Default with respect to Securities
of the series, if any, other than those set forth herein;
(12) if either or both of Section 1302 and Section 1303 shall
be inapplicable to the Securities of the series (provided that if no
such inapplicability shall be specified, then both Section 1302 and
Section 1303 shall be applicable to the Securities of the series);
(13) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies in which the Securities of such
series shall be denominated and in which payments or principal of, and
any premium and interest on, such Securities shall or may by payable;
(14) additional covenants with respect to Securities of the
series, if any, other than those set forth herein;
(15) if other than the Trustee, the identity of the Registrar
and any Paying Agent; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth
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in such Officer's Certificate or in any such Indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and
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<PAGE> 39
(subject to Sections 315(a) through (d) of the Trust Indenture Act) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture;
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company, enforceable in
accordance with their terms, except to the extent enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law); and
(d) that no consent, approval, authorization, order,
registration or qualification of or with any court or any governmental
agency or body having jurisdiction over the Company is required for the
execution and delivery of such Securities by the Company, except such
as have been obtained (except that no opinion need be expressed as to
state securities or Blue Sky laws).
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 301 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Board Resolution
and the Officer's Certificate otherwise required pursuant to Section 301 or the
Company Order and Opinion of Counsel otherwise required pursuant to the
immediately preceding paragraph at or prior to the time of authentication of
each Security of such series if such documents
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<PAGE> 40
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Company shall execute and the Trustee shall, in accordance
with this Section and the Company Order with respect to the authentication and
delivery of such series, authenticate and deliver one or more global Securities
that (i) shall be in an aggregate amount equal to the aggregate principal amount
specified in such Company Order, (ii) shall be registered in the name of the
Common Depositary or U.S. Depositary, as the case may be, therefor or its
nominee, and (iii) shall be made available for delivery by the Trustee to such
depositary or pursuant to such depositary's instruction.
Each depositary designated pursuant to Section 301 must, at the time of
its designation and at all times while it serves as depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
Unless otherwise provided for in the form of Security, each Security
shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary Securities may
be in global form, representing all or a portion of the Outstanding Securities
of such series.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of Section 305), if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that
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series to be prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the office of a depositary or common depositary (the "COMMON
DEPOSITARY") for credit to the respective accounts of the beneficial owners of
such Securities (or to such other accounts as they may direct).
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "SECURITY REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of registration of transfers of Securities. The
Trustee is hereby appointed "SECURITY REGISTRAR" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the
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Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified or
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified in and subject to the conditions contemplated by
Section 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that series in aggregate
principal amount equal to the principal amount of such permanent global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the Common Depositary or the U.S. Depositary,
as the case may be, for exchange in whole or in part for definitive Securities
of the same series without charge, and in accordance with instructions given to
the Trustee and the Common Depositary or the U.S. Depositary, as the case may
be, (which instructions shall be in writing but need not comply with Section 102
or be accompanied by an Opinion of Counsel), as shall be specified in the
Company Order with respect thereto to the Trustee, as the Company's agent for
such purpose. The Trustee shall authenticate and make available for delivery, in
exchange for each portion of such surrendered permanent global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
global Security to be exchanged which shall be in the form of the Securities of
such series; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing.
Promptly following any such exchange in part, such permanent global Security
shall be returned by the Trustee to the Common Depositary or the U.S.
Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary referred to above in accordance with the written instructions of the
Company referred to above. If a Security in the form specified for such series
is issued in exchange for any portion of a permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of interest or Defaulted Interest, as the case may be, such
interest or Defaulted Interest will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Security in
the
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form specified for such series, but will be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the Person to
whom interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of
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any such destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more predecessor securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the
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same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities of such series at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of
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the Company or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by any Common Depositary (or its nominee), as a Holder, with respect
to such Security in global form or impair, as between such Common Depositary and
owners of beneficial interests in such Security in global form, the operation of
customary practices governing the exercise of the right of such Common
Depositary (or its nominee) as holder of such Security in global form.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities shall be held by the Trustee and may be destroyed (and, if
so destroyed, certification of their destruction shall be delivered to the
Company, unless, by a Company Order, the Company shall direct that canceled
Securities be returned to it).
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of Security for such series), when the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1009) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
for herein relating to the
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satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1009 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1009, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with or
received by the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"EVENT OF DEFAULT," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or to be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) the Company defaults in the payment of interest on any Security of
that series when such interest becomes due and payable and the default continues
for a period of two days; or
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any Security of that series when the same becomes due and
payable at Maturity, upon redemption (including redemptions under Article
Eleven), or otherwise; or
(3) the Company defaults in the deposit of any sinking fund payment,
when and as due by the terms of the Security of that series; or
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(4) the Company fails to observe or perform any of its other covenants,
warranties or agreements in the Securities of that series or this Indenture
(other than a covenant, agreement or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of series of
Securities other than that series), and the failure to observe or perform
continues for the period and after the notice specified in the last paragraph of
this Section; or
(5) an event of default, as defined in any mortgage, indenture, or
instrument under which there may be issued, or by which there may be secured or
evidenced, any Indebtedness of the Company (including Securities of another
series) or a Subsidiary (whether such Indebtedness now exists or shall hereafter
be created or incurred) shall occur and shall consist of default in the payment
of such Indebtedness at the maturity thereof (after giving effect to any
applicable grace period) or shall result in Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable, and such default in payment is not cured or such acceleration
shall not be rescinded or annulled within 15 days after written notice to the
Company from the Trustee or to the Company and to the Trustee from the Holders
of at least 10% in aggregate principal amount of the Securities of that series
at the time outstanding; provided that it shall not be an Event of Default if
the principal amount of Indebtedness which is not paid at maturity or the
maturity of which is accelerated is less than $15,000,000; provided further that
if, prior to a declaration of acceleration of the maturity of the Securities of
that series or the entry of judgment in favor of the Trustee in a suit pursuant
to Section 503, such default shall be remedied or cured by the Company or such
Subsidiary or waived by the holders of such Indebtedness, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee or any of the Holders of the Securities of that series, and
provided further, that, subject to Sections 601 and 602, the Trustee shall not
be charged with knowledge of any such default unless written notice of such
default shall have been given to the Trustee by the Company, by a holder or an
agent of a holder of any such Indebtedness, by the trustee then acting under any
indenture or other instrument under which such default shall have occurred, or
by the Holders of at least five percent in aggregate principal amount of the
Securities of that series at the time outstanding; or
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(6) the Company pursuant to or within the meaning of any Bankruptcy Law
(A) commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (D) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the Company or for any
material part of its property, (E) makes a general assignment for the benefit of
its creditors or (F) takes any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(7) (i) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any Bankruptcy Law which shall (A) approve as properly filed a petition
seeking reorganization, arrangement, adjustment or composition in respect of the
Company, (B) appoint a Custodian of the Company or for any material part of its
property or (C) order the winding-up or liquidation of its affairs, and such
judgment, decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or (ii) any bankruptcy or insolvency petition or application
is filed, or any bankruptcy or insolvency proceeding is commenced against the
Company and such petition, application or proceeding is not dismissed within 90
days; or (iii) a warrant of attachment is issued against any material portion of
the property of the Company which is not released within 90 days of service; or
(8) any other Event of Default provided with respect to Securities of
that series.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." When a Default under clause (3) above is
cured within such 60-day period, it ceases to be a Default.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series (other
than an Event of Default specified in clause (6) or (7) of Section 501) occurs
and is continuing, the Trustee by notice in writing to the Company, or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by notice in writing to the Company and the Trustee,
may declare the unpaid principal of and accrued interest to the date of
acceleration (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) on all the Outstanding Securities of that series to be due
and payable immediately and, upon any such declaration, the Outstanding
Securities of that series (or specified principal amount) shall become and be
immediately due and payable.
If an Event of Default specified in clause (6) or (7) of Section 501
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or specified principal amount) shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder of any Security of that series.
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, except obligations
under Section 607.
The Holders of a majority in principal amount of the Outstanding
Securities of that series by notice to the Trustee may rescind an acceleration
and its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal and interest of the Securities of that series that
has become due solely by such declaration of acceleration, have been cured or
waived, (ii) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal that has become due
otherwise than by such declaration of acceleration have been paid, (iii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iv) all payments due to the Trustee and any
predecessor Trustee under Section 607 have been made.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security of
any series when such interest becomes due and payable and such default continues
for a period of two days, or
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(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at the Maturity thereof, the Company will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal (and premium, if any) and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to secure any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in
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order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such
judicial proceedings, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in respect
of the Securities of any series shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities in respect of which moneys have been collected
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 607
applicable to such series;
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Second: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Securities of such series in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities of such series for principal (and premium, if
any) and interest, respectively; and
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least ten (10) days before such record
date, the Trustee shall mail to each Holder and the Company a notice that states
the record date, the payment date and the amount to be paid.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders shall have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of Holders of Securities of
any series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other of such Holders, or to obtain or to seek to obtain priority
or preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and
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for the equal and ratable benefit of all Holders of Securities of the affected
series.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) subject to Section 601, the Trustee need not take any action which
might involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all the Securities of such series waive any Default or
Event of Default with respect to such series and its consequences, except a
Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if any)
or interest on any Security of such series, or
(2) in respect of a covenant or other provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such Default or Event of Default shall cease to
exist and shall be deemed to have been cured, for every purpose of this
Indenture and the Securities of such series; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs,
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including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security on or after
the Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing, and is
known to the Trustee, the Trustee shall exercise the rights and powers vested in
it by this Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) None of the provisions of Section 315(d) of the Trust Indenture Act
shall be excluded from this Indenture.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any Default or Event of Default
with respect to the Securities of any series, the Trustee shall give to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any) or interest on
any Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that
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the withholding of such notice is in the interest of the Holders of Securities
of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal amount of the Outstanding Securities of any series; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the
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Trustee, reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity against
such costs, expenses or liabilities as a condition to so proceeding; the
reasonable expense of every such investigation shall be paid by the Company or,
if paid by the Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder (including amounts held by
the Trustee as Paying Agent) need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed upon in writing
with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability, damage, claim or expense, including taxes
(other than taxes based upon or determined or measured by the income of
the Trustee), incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
The provisions of this Section 607 shall survive this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under Section 310(a)(1) of the Trust Indenture Act having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by
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federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company may serve as Trustee. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at
least six months; or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder of a Security who has been a bona fide Holder of
a Security for at least six months; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company with
respect to such Securities. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such
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successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of such (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
such series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
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(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article and the Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor (by merger,
conversion, consolidation or otherwise as permitted hereunder) to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of, and subject to the
direction of, the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include
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authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under
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this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
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Form of Authenticating Agent's
Certificate of Authentication
Dated:_________________
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
STAR BANK, N.A.
As Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than January 1 and July 1 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding December 15 or June 15, as the case
may be; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
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SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a); or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), and as to
the approximate cost of mailing to such Holders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information preserved
at the time by the Trustee in accordance with Section 702(a) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall
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find, after notice and opportunity for hearing, that all objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1996, the Trustee shall transmit by mail to all Holders of Securities as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated as
of May 15, if required by and in compliance with Section 313(a) of the Trust
Indenture Act.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
(c) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act on the terms and in the manner provided pursuant thereto.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required
to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission,
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such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange
Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations;
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, (a) concurrently with
furnishing the same to its shareholders, the Company's annual report to
shareholders, containing certified financial statements, and any other
financial reports which the Company generally furnishes to its
shareholders, and (b) within 30 days after the filing thereof with the
Trustee, such summaries of any other information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed
from time to time by the Commission; and
(4) furnish to the Trustee, on or before May 1 of each year, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this paragraph, such compliance
shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. Such certificate
need not comply with Section 102.
ARTICLE EIGHT
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 801. When Company May Merge, Etc.
The Company shall not consolidate with, or merge with or into any other
Person (whether or not the Company shall be the surviving corporation), or sell,
assign, transfer or lease all or substantially all of its properties and assets
as an entirety or substantially as an entirety to any Person or group of
affiliated Persons, in one transaction or a series of related transactions,
unless:
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(1) either the Company shall be the continuing Person or the
Person (if other than the Company) formed by such consolidation or with
which or into which the Company is merged or the Person (or group of
affiliated Persons) to which all or substantially all the properties
and assets of the Company as an entirety or substantially as an
entirety are sold, assigned, transferred or leased shall be a
corporation (or constitute corporations) organized and existing under
the laws of the United States of America or any State thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture; and
(2) immediately before and after giving effect to such
transaction or series of related transactions, no Event of Default, and
no Default, shall have occurred and be continuing.
SECTION 802. Opinion of Counsel.
The Company shall deliver to the Trustee prior to the proposed
transaction(s) covered by Section 801 an Officer's Certificate and an Opinion of
Counsel stating that the transaction(s) and such supplemental indenture comply
with this Indenture and that all conditions precedent to the consummation of the
transaction(s) under this Indenture have been met.
SECTION 803. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any lease, sale, assignment, or transfer of all or
substantially all of the property and assets of the Company in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or the successor corporation or affiliated group of
corporations to which such lease, sale, assignment, or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation or corporations had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation or
corporations shall be relieved of all obligations and covenants under this
Indenture and the Securities and in the event of such conveyance or transfer,
except in the case of a lease, any such predecessor corporation may be dissolved
and liquidated.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without notice to or the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default with respect to
all or any series of Securities; or
(4) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable
as to principal, and with or without interest coupons; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be
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necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 611(b); or
(9) to cure any ambiguity, defect or inconsistency or to
correct or supplement any provision herein which may be inconsistent
with any other provision herein; or
(10) to make any change that does not materially adversely
affect the interests of the Holders of Securities of any series.
Upon request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in (and subject to the last sentence
of) Section 903, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
shall, subject to Section 903, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof or extend the time for payment
thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change
any Place of Payment where, or the coin or currency in which, any
Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date);
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(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain
provisions of this Indenture or Defaults or Events of Default hereunder
and their consequences provided for in this Indenture; or
(3) change the redemption provisions (including Article
Eleven) hereof in a manner adverse to such Holder; or
(4) modify any of the provisions of this Section or Section
513, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section, or
the deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provisions of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant
to this Article, subject to the last sentence of this Section 903. In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payments of Securities.
With respect to each series of Securities, the Company will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture, and will duly
comply with all the other terms, agreements and conditions contained in, or made
in the Indenture for the benefit of, the Securities of such series.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of Payment
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment, where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the
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location, and any change in location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee as set forth in Section 105 hereof.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Corporate Existence.
Subject to Article 8 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and that of each of its Subsidiaries and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that (a) the Company shall not be required to preserve any
such right, license or franchise or the corporate existence of any of its
Subsidiaries if the Board of Directors, or the board of directors of the
Subsidiary concerned, as the case may be, shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company or
any of its Subsidiaries and that the loss thereof is not materially
disadvantageous to the Holders, and (b) nothing herein contained shall prevent
any Subsidiary of the Company from liquidating or dissolving, or merging into,
or consolidating with the Company (provided that the Company shall be the
continuing or surviving corporation) or with any one or more other Subsidiaries
if the Board of Directors or the board of directors of the Subsidiary concerned,
as the case may be, shall so determine.
SECTION 1004. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a material lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good
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faith by appropriate proceedings and for which adequate provision has been made.
SECTION 1005. Maintenance of Properties.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order (normal wear and
tear excepted) and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or disposal
is, in the judgment of the Board of Directors or of the board of directors of
the Subsidiary concerned, as the case may be, desirable in the conduct of the
business of the Company or any Subsidiary of the Company and not materially
disadvantageous to the Holders.
SECTION 1006. Compliance Certificates.
(a) The Company shall deliver to the Trustee within 120 days
after the end of each fiscal year of the Company (which fiscal year
currently ends on March 31), an Officer's Certificate stating whether
or not the signer knows of any Default or Event of Default by the
Company that occurred prior to the end of the fiscal year and is then
continuing. If the signer does know of such a Default or Event of
Default, the certificate shall describe each such Default or Event of
Default and its status and the specific section or sections of this
Indenture in connection with which such Default or Event of Default has
occurred. The Company shall also promptly notify the Trustee in writing
should the Company's fiscal year be changed so that the end thereof is
on any date other than the date on which the Company's fiscal year
currently ends. The certificate need not comply with Section 102
hereof, but shall comply with Section 314(a)(4) of the Trust Indenture
Act.
(b) The Company shall deliver to the Trustee, within 20 days
after the occurrence thereof, notice of any acceleration which with the
giving of notice and the lapse of time would be an Event of Default
within the meaning of Section 501(4) hereof.
(c) The Company shall deliver to the Trustee within 120 days
after the end of each fiscal year a written statement by the Company's
independent certified public
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accountants stating (i) that their audit examination has included a
review of the terms of this Indenture and the Securities as they relate
to accounting matters and (ii) whether, in connection with their audit
examination, any Default has come to their attention and if such a
Default has come to their attention, specifying the nature and period
of existence thereof and the specific section or sections of this
Indenture in connection with which such Default has occurred; provided
that, without any restriction as to the scope of the audit examination,
such independent certified public accountants shall not be liable by
reason of the failure to obtain knowledge of such Default that would
not be disclosed in the course of an audit examination conducted in
accordance with generally accepted auditing standards.
(d) The Company shall deliver to the Trustee forthwith upon
becoming aware of a Default or Event of Default (but in no event later
than 20 days after the occurrence of each Default or Event of Default
that is continuing), an Officer's Certificate setting forth the details
of such Default or Event of Default and the action that the Company
proposes to take with respect thereto and the specific section or
sections of this Indenture in connection with which such Default or
Event of Default has occurred.
SECTION 1007. Commission Reports.
(a) The Company shall file with the Trustee, within 30 days
after it files them with the Commission, copies of the quarterly and
annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the Commission may
by rules and regulations prescribe) which the Company is required to
file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is not subject to the requirement of such
Section 13 or 15(d) of the Exchange Act, the Company shall file with
the Trustee, within 30 days after it would have been required to file
such information with the Commission, financial statements, including
any notes thereto and, with respect to annual reports, an auditors'
report by an accounting firm of established national reputation and a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," both comparable to that which the Company would
have been required to include in such annual reports, information,
documents or other reports if the Company had been subject to the
requirements of such Sections 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of Section 314(a)
of the Trust Indenture Act.
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(b) So long as the Securities remain outstanding, the Company
shall cause its annual report to shareholders and any other financial
reports furnished by it to shareholders generally, to be mailed to the
Holders at their addresses appearing in the register of Securities
maintained by the Security Registrar in each case at the time of such
mailing or furnishing to shareholders. If the Company is not required
to furnish annual or quarterly reports to its shareholders pursuant to
the Exchange Act, the Company shall cause its financial statements,
including any notes thereto and, with respect to annual reports, an
auditors' report by an accounting firm of established national
reputation and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," to be so filed with the Trustee
and mailed to the Holders within 90 days after the end of each of the
Company's fiscal years and within 45 days after the end of each of the
first three quarters of each fiscal year.
(c) The Company shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information
that the Company may be required to deliver to the Holders under this
Section 1007.
SECTION 1008. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim, [and will actively resist any and all efforts to be compelled to take the
benefit or advantage of,] any stay or extension law or any usury law or other
law, which would prohibit or forgive the Company from paying all or any portion
of the principal of and/or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 1009. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such
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Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of
any payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for one
year after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or
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(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee of such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1010. Restrictions on Secured Debt.
(a) The Company will not, nor will it permit any Restricted Subsidiary
to, create, incur, issue, assume or guarantee any indebtedness for borrowed
money (hereinafter called "INDEBTEDNESS") secured by a mortgage, security
interest, pledge or lien (hereinafter called "MORTGAGE") of or upon any
Principal Property or on any shares of stock or indebtedness of any Restricted
Subsidiary (whether such Principal Property, shares of stock or indebtedness is
now owned or hereafter acquired) without in any such case making or causing to
be made effective provision (and the Company covenants that in any such case it
shall make or cause to be made effective provision) whereby the Securities of
each series (together with, if the Company shall so determine, any other
indebtedness created, incurred, issued, assumed or guaranteed by the Company or
any Restricted Subsidiary and then existing or thereafter created) shall be
secured equally and ratably with (or, at the option of the Company, prior to)
such indebtedness, so long as such indebtedness shall be so secured.
(b) The provisions of paragraph (a) of this Section shall not, however,
apply to any indebtedness secured by any one or more of the following:
(1) mortgages of or upon any property acquired, constructed or improved
by, or of or upon any shares of capital stock or indebtedness acquired by, the
Company or any Restricted Subsidiary after the date of this Indenture (A) to
secure the payment of all or any part of the purchase price of such property,
shares of capital stock or indebtedness upon the acquisition thereof by the
Company or any Restricted Subsidiary, or (b) to secure any indebtedness issued,
assumed or guaranteed by the Company or any Restricted Subsidiary prior to, at
the time of, or within 270 days after (i) in the case of property, the later of
the acquisition, completion of construction (including any improvements on
existing property) or commencement of
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commercial operation of such property or (ii) in the case of shares of capital
stock or indebtedness, the acquisition of such shares of capital stock or
indebtedness, which indebtedness is issued, assumed or guaranteed for the
purpose of financing or refinancing all or any part of the purchase price of
such property, shares of capital stock or indebtedness and, in the case of
property, the cost of construction thereof or improvements thereon, provided
that in the case of any such acquisition, construction or improvement the
mortgage shall not apply to any property, shares of capital stock or
indebtedness theretofore owned by the Company or any Restricted Subsidiary,
other than, in the case of any such construction or improvement, any theretofore
unimproved or substantially unimproved real property on which the property so
constructed or the improvement is located.
(2) mortgages of or upon any property, shares of capital stock or
indebtedness existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary;
(3) mortgages of or upon any property of a corporation existing at the
time such corporation is merged with or into or consolidated with the Company or
any Restricted Subsidiary or existing at the time of a sale or transfer of the
properties of a corporation as an entirety or substantially as an entirety to
the Company or any Restricted Subsidiary;
(4) mortgages of or upon any property of, or shares of capital stock or
indebtedness of, a corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(5) mortgages to secure indebtedness in favor of the Company or any
Restricted Subsidiary;
(6) mortgages in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any State thereof, or in favor of any other
country or political subdivision, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any indebtedness
incurred or guaranteed for the purpose of financing or refinancing all or any
part of the purchase price of the property, shares of capital stock or
indebtedness subject to such mortgages, or the cost of constructing or improving
the property subject to such mortgages (including, without limitation, mortgages
incurred in connection with pollution control, industrial revenue or similar
financing);
(7) mortgages to secure payment of taxes or assessments or other
governmental charges or levies being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and for which such
reserve or
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other appropriate provision, if any, as shall be required in accordance with
generally accepted accounting principles shall have been made;
(8) mortgages to secure obligations under workers' compensation or
similar legislation;
(9) mortgages to secure performance of statutory obligations, surety
bonds or appeal bonds, performance or return- of-money bonds or other
obligations of a like nature incurred in the ordinary course of business;
(10) attachment and judgment mortgages for which an insurance carrier
shall have acknowledged in writing liability in respect of the full amount
thereof or shall have been ordered by a court of competent jurisdiction to pay;
and
(11) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any mortgage existing at the
date of this Indenture or any mortgage referred to in the foregoing Clauses (1)
through (10), inclusive provided, however, that the principal amount of
indebtedness secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or a
part of the property (plus improvements and construction on such property),
shares of capital stock or indebtedness which was subject to the mortgage so
extended, renewed or replaced.
(c) Notwithstanding the provisions of paragraph (a) of this Section,
the Company or any Restricted Subsidiary may, without equally and ratably
securing the Securities, issue, assume or guarantee indebtedness secured by a
mortgage not excepted by Clauses (1) through (11) of such paragraph (b), if the
aggregate amount of such indebtedness, together with all other indebtedness of,
or indebtedness guaranteed by, the Company and its Restricted Subsidiaries
existing at such time and secured by mortgages not so excepted and the
Attributable Debt in respect of Lease-back Transactions existing at such time
(other than Sale and Leaseback Transactions permitted by Clause (i) of Section
1011 and other than Sale and Leaseback Transactions the proceeds of which have
been applied in accordance with Clause (iii) of Section 1011), does not at the
time exceed 10% of Consolidated Net Tangible Assets.
SECTION 1011. Restrictions on Sale and Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any arrangement with any Person providing for the leasing by the
Company or any Restricted
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Subsidiary of any Principal Property, whether now owned or hereafter acquired
(except for temporary leases for a term, including any renewal thereof, of not
more than three years, and except for leases between the Company and any
Restricted Subsidiary, between any Restricted Subsidiary and the Company or
between Restricted Subsidiaries), which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person with the
intention of taking back a lease of such property (herein referred to as a "SALE
AND LEASEBACK TRANSACTION") unless (i) the Company or such Restricted Subsidiary
would (at the time of entering into such arrangement) be entitled pursuant to
clause (1) or (6) of Section 1010(b), without equally and ratably securing the
Securities, to issue, assume or guarantee indebtedness secured by a mortgage on
such property, or (ii) the Company or such Restricted Subsidiary would (at the
time of entering into such arrangement) be entitled pursuant to Section 1010(c),
without equally and ratably securing the Securities, to issue, assume or
guarantee indebtedness secured by a mortgage on such property in an amount at
least equal to the Attributable Debt in respect of such Sale and Leaseback
Transaction or (iii) the Company shall apply, within 270 days of the effective
date of any such arrangement, an amount equal to the Attributable Debt in
respect of such Sale and Leaseback Transaction to the prepayment or retirement
(other than any mandatory prepayment or retirement) of indebtedness incurred or
assumed by the Company or any Restricted Subsidiary (other than indebtedness
owned by the Company or any Restricted Subsidiary) which by its terms matures at
or is extendible or renewable at the option of the obligor to a date more than
twelve months after the date of the creation of such indebtedness.
SECTION 1012. Restrictions on Indebtedness of Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary to
create, incur, issue, assume or guarantee any indebtedness (as defined in
Section 1010(a)), provided, however, that this restriction will not apply if:
(1) such indebtedness is owed to the Company;
(2) such indebtedness existed at the time the corporation that
issued such indebtedness became a Restricted Subsidiary of the Company,
or was merged with or into or consolidated with such Restricted
Subsidiary, or at the time of a sale, lease or other disposition of the
properties of such corporation as an entirety to such Restricted
Subsidiary;
(3) such indebtedness is guaranteed by a governmental agency;
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(4) such indebtedness is issued, assumed or guaranteed in
connection with, or with a view to, compliance by such Restricted
Subsidiary with the requirements of any program adopted by any federal,
state or local governmental authority and applicable to such Restricted
Subsidiary and providing financial or tax benefits to such Restricted
Subsidiary which are not available directly to the Company;
(5) such indebtedness is nonrecourse to the Restricted
Subsidiary; or
(6) such indebtedness is incurred for the purpose of
extending, renewing, substituting, replacing or refunding indebtedness
permitted by the foregoing, provided that the principal amount of such
indebtedness shall not exceed the principal amount of indebtedness
being extended, renewed, replaced or refunded.
(b) Notwithstanding the provisions of paragraph (a) of this Section,
the Company's Restricted Subsidiaries may create, incur, issue, assume or
guarantee indebtedness which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with the aggregate
outstanding principal amount of all other indebtedness of the Company and its
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including indebtedness permitted to be incurred pursuant to
clauses (1) through (6) above or clauses (1) through (11) of paragraph (b) of
Section 1010, but including any indebtedness issued, assumed or guaranteed
pursuant to paragraph (c) of Section 1010), does not at the time such
indebtedness is incurred exceed an amount equal to 10% of Consolidated Net
Tangible Assets.
SECTION 1013. Change of Control.
(a) Upon the occurrence of a Change of Control (the "CHANGE OF CONTROL
DATE"), each Holder shall have the right, at the Holder's option, to require
that the Company purchase all or any part (provided that the principal amount
must be $1,000 or an integral multiple thereof) of such Holder's Securities
pursuant to the offer described in paragraph (b) below (the "CHANGE OF CONTROL
OFFER") at a purchase price equal to 100% of the principal amount plus accrued
and unpaid interest, if any, to the date of purchase.
(b) Within ten days following a Change of Control Date, the Company
shall mail a notice (which notice shall contain all instructions and materials
necessary to enable Holders to tender Securities) to each Holder of Securities
at the address of such Holder in the Security Register of each applicable series
stating:
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(1) that the Change of Control Offer is being made pursuant to
this Section 1013 and that all Securities of such series tendered will
be accepted for payment;
(2) the purchase price and the purchase date (which shall be
no earlier than 30 days nor later than 40 days from the date such
notice is mailed) (the "CHANGE OF CONTROL PAYMENT DATE");
(3) that any Security not tendered will continue to accrue
interest;
(4) that any Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change
of Control Payment Date;
(5) that Holders electing to have Securities purchased
pursuant to a Change of Control Offer will be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of each Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day prior to the Change of Control Payment Date; and
(6) that Holders whose Securities are purchased only in part
will be issued new Securities of the same series as, and equal in
principal amount to, the unpurchased portion of the Securities
surrendered.
Election by a Holder shall (unless otherwise provided by law) be
irrevocable.
In the event that the aggregate principal amount of the Securities that
are surrendered pursuant to a Change of Control Offer on a Change of Control
Payment Date is at least 80% of the aggregate principal amount of the Securities
outstanding, the remaining Securities shall be subject to the Company's purchase
as a whole, at the Company's option, upon not less than 30 days notice mailed to
each Holder thereof at the address of such Holder appearing in the Security
Register, on a date selected by the Company that is within 30 days after such
Change of Control Payment Date, at a price equal to 100% of the principal
amount, plus accrued interest to such date of purchase.
On the Change of Control Payment Date, the Company shall (i) accept for
payment Securities of each applicable series or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities of each applicable
series or portions thereof so accepted and (iii) deliver, or cause to be
delivered to the Trustee, Securities so accepted, together with an Officer's
Certificate stating the Securities or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to the Holder of Securities of each
applicable series
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so accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail to or make available for delivery to such
Holder a new Security of the same series as, and equal in principal amount to,
any unpurchased portion of the Security surrendered. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date. For purposes of this Section 1013, the
Trustee or its agent shall act as the Paying Agent.
Notwithstanding the foregoing, if the Company effects defeasance or
covenant defeasance of the Securities under the Indenture prior to the date
notice of a Change of Control is required, the Holders of Securities shall not
have any right to require the Company to purchase all or any part of such
Holder's Securities pursuant to the Change of Control Offer as a result of such
Change of Control.
SECTION 1014. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of Sections 1006 and 1007, and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1015. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1010, 1011 and 1012, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all the Securities of any series, the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, substantially pro rata, by lot
or by any other method as the Trustee considers fair and appropriate and that
complies with the requirements of the principal national securities exchange, if
any, on which such Securities are listed, and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series; provided that
in case the Securities of such series have different terms and maturities, the
Securities to be redeemed shall be selected by the Company and the Company shall
give notice thereof to the Trustee.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the
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case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of the Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date;
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the
case; and
(7) the CUSIP number, if any, of the Securities to be
redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is
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acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1009) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular or Special Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and Stated Maturity, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "MANDATORY SINKING
FUND PAYMENT," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "OPTIONAL
SINKING FUND PAYMENT." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and
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crediting Securities of that series pursuant to Section 1202 and will also
deliver to the Trustee any Securities to be so delivered (which have not been
previously delivered). Not less than 30 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.
Unless pursuant to Section 301 provision is made for the
inapplicability of either or both of (a) defeasance of the Securities of a
series under Section 1302 or (b) covenant defeasance of the Securities of a
series under Section 1303, then the provisions of such Section or Sections, as
the case may be, together with the other provisions of this Article, shall be
applicable to the Securities of such series, and the Company may at its option
by Board Resolution, at any time, with respect to the Securities of such series,
elect to have either Section 1302 (unless inapplicable) or Section 1303 (unless
inapplicable) be applied to the Outstanding Securities of such series upon
compliance with the applicable conditions set forth below in this Article.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series, the Company shall be
discharged from its obligations with respect to the Outstanding Securities of
such series on the date the applicable conditions set forth in Section 1304 are
satisfied (hereinafter, "DEFEASANCE"). Defeasance shall mean that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same); provided, however, that the
following rights, obligations, powers, trusts, duties and immunities shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities of such series to receive,
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solely from the trust fund provided for in Section 1304, payments in respect of
the principal of (and premium, if any) and interest on such Securities when such
payments are due, (B) the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1009, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article, the Company may exercise its option with respect
to defeasance under this Section 1302 notwithstanding the prior exercise of its
option with respect to covenant defeasance under Section 1303 in regard to the
Securities of such series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301 to
obtain a covenant defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under this
Indenture (except its obligations under Sections 304, 305, 306, 506, 509, 610,
1001, 1002, 1006, 1008 and 1009) with respect to the Outstanding Securities of
such series on and after the date the applicable conditions set forth in Section
1304 are satisfied (hereinafter, "COVENANT DEFEASANCE"). Covenant defeasance
shall mean that, with respect to the Outstanding Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in this Indenture (except its
obligations under Sections 304, 305, 306, 506, 509, 610, 1001, 1002, 1006, 1008
and 1009), whether directly or indirectly by reason of any reference elsewhere
herein or by reason of any reference to any other provision herein or in any
other document, and such omission to comply shall not constitute an Event of
Default under Section 501(4) with respect to Outstanding Securities of such
series, and the remainder of this Indenture and of the Securities of such series
shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to defeasance under Section 1302
and covenant defeasance under Section 1303 with respect to the Outstanding
Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article applicable to it), under the terms of an
irrevocable trust agreement in form and substance reasonably
satisfactory to such Trustee, as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and
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dedicated solely to, the benefit of the Holders of such Securities, (A)
dollars in an amount, or (B) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than the due date
of any payment, money in an amount, or (C) a combination thereof, in
each case sufficient, after payment of all federal, state and local
taxes or other charges or assessments in respect thereof payable by the
Trustee, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal of (and premium, if any, on) and each
installment of principal of (and premium, if any) and interest on the
Outstanding Securities of such series on the Stated Maturity of such
principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to the
Outstanding Securities of such series on the day on which such payments
are due and payable in accordance with the terms of this Indenture and
of such Securities.
(2) No Default or Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit, and no
Default or Event of Default under clause (5) or (6) of Section 501
hereof shall occur and be continuing, at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such deposit, defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by
which it is bound.
(4) Such defeasance or covenant defeasance shall not cause any
Securities of such series then listed on any national securities
exchange registered under the Exchange Act to be delisted.
(5) In the case of an election with respect to Section 1302,
the Company shall have delivered to the Trustee either (A) a ruling
directed to the Trustee received from the Internal Revenue Service to
the
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effect that the Holders of the Outstanding Securities of such series
will not recognize income, gain or loss for federal income tax purposes
as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred or (B) an
Opinion of Counsel, based on such ruling or on a change in the
applicable federal income tax law since the date of this Indenture, in
either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Securities of such series
will not recognize income, gain or loss for federal income tax purposes
as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
(6) In the case of an election with respect to Section 1303,
the Company shall have delivered to the Trustee an Opinion of Counsel
or a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of the Outstanding Securities of
such series will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected
in compliance with any additional terms, conditions or limitations
which may be imposed on the Company in connection therewith pursuant to
Section 301.
(8) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1302 or the covenant defeasance under Section 1303 (as
the case may be) have been complied with.
SECTION 1305. Deposited Money and Government Obligations To Be Held In Trust.
Subject to the provisions of the last paragraph of Section 1009, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee--collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of a particular series shall be held in trust and
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applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1304 or the principal and interest received in respect
thereof, other than any such tax, fee or other charge which by law is for the
account of the Holders of the Outstanding Securities of such series.
Anything in this Article to the contrary notwithstand ing, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1304 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited for
the purpose for which such money or Government Obligations were deposited.
ARTICLE FOURTEEN
MISCELLANEOUS
SECTION 1401. Miscellaneous.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PIONEER-STANDARD ELECTRONICS,
INC.
By
-------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------
Name:
Title:
STAR BANK, N.A.,
as Trustee
By
-------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------
Name:
Title:
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<PAGE> 98
STATE OF ________ )
) SS.:
COUNTY OF ___________ )
On the ___ day of ________, 1996, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is ________________________ of Pioneer-Standard Electronics, Inc.,
one of the parties described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
----------------------------
My commission expires:
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<PAGE> 99
STATE OF __________ )
) SS.:
COUNTY OF _________ )
On the ____ day of ___________, 1996, before me personally came
____________________, to me known, who, being by me duly sworn, did depose and
say that he is ________________ of Star Bank, N.A., one of the parties described
in and which executed the foregoing instrument; that he knows the seal of said
bank; that the seal affixed to said instrument is such corporate seal; that it
was so affixed by authority of the Board of Directors of said bank, and that he
signed his name thereto by like authority.
------------------------------
My commission expires:
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<PAGE> 1
CALFEE, HALTER & GRISWOLD
ATTORNEYS AT LAW
_____________________________ Exhibit 5.1
1400 McDonald Investment Center
800 Superior Avenue Cleveland, Ohio 44114-2688
216/622-8200 Fax 216/241-0816
July 3, 1996
Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
In connection with the filing by Pioneer-Standard Electronics, Inc., an
Ohio corporation (the "Company"), with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended, of a
Registration Statement on Form S-3 with respect to up to $200,000,000 of the
Company's common shares, without par value (the "Common Shares"), and its debt
securities (the "Debt Securities") (hereinafter collectively referred to as the
"Securities"), to be sold by the Company from time to time, we have examined
the following:
(i) the Amended Articles of Incorporation, as amended,
and the Amended Code of Regulations of the Company,
each as currently in effect;
(ii) the form of Registration Statement on Form S-3
(including Exhibits thereto) referred to above and to be
filed with the Securities and Exchange Commission
(the "Registration Statement");
(iii) the proposed form of Underwriting Agreement
pursuant to which the Securities are to be
purchased by the Underwriters and resold to the
public;
(iv) the proposed form of Indenture under which the Debt
Securities are to be issued; and
(v) such other documents as we deemed it necessary to
examine as a basis for the opinions hereinafter
expressed.
Based upon the foregoing, we are of the opinion that:
(i) The Company is incorporated and validly existing
under the laws of the State of Ohio;
<PAGE> 2
CALFEE, HALTER & GRISWOLD
Pioneer-Standard Electronics, Inc.
July 3, 1996
Page 2
(ii) The Common Shares to be issued and sold by the
Company, when issued and sold in the manner
contemplated by the Registration Statement and the
Underwriting Agreement applicable thereto, will be
legally issued, fully paid and nonassessable; and
(iii) The Debt Securities to be issued and sold by the
Company, when issued and sold in the manner
contemplated by the Registration Statement, the
Underwriting Agreement applicable thereto and the
Indenture, will be valid and binding obligations of
the Company.
We are attorneys licensed to practice law in the State of Ohio. The
opinions expressed herein are limited solely to the Federal Law of the United
States of America and the laws of the State of Ohio. We express no opinion as
to the effect or applicability of the laws of any other jurisdiction except to
the extent hereinafter set forth. Further, we note that the Indenture under
which the Debt Securities are to be issued is stated to be governed by the laws
of the State of New York. To the extent the laws of the State of New York
govern the matters as to which the opinions expressed herein are rendered,
you may rely upon our opinions as opinions with respect to the laws of the
State of New York to the extent such laws are construed or applied with the
same effect as the substantive laws of the State of Ohio. We express no
opinion as to whether the laws of the State of New York are the same as the
laws of the State of Ohio.
This opinion is delivered to you solely in connection with the filing of
the Registration Statement with respect to the Securities, and this letter and
the opinions stated herein may not be relied upon for any other purpose or by
any persons other than the Directors and executive officers of the Company.
We consent to the filing of this opinion with the Registration
Statement and to the use of our name therein under the caption "Validity of
Securities."
Respectfully submitted,
CALFEE, HALTER & GRISWOLD
<PAGE> 1
Exhibit 10.1
PIONEER-STANDARD ELECTRONICS, INC.
SHARE SUBSCRIPTION AGREEMENT AND TRUST
Effective as of July 2, 1996
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE 1.
Trust, Trustee and Trust Fund ............................................. 1
1.1. Trust ........................................................... 1
1.2. Trustee ......................................................... 1
1.3. Trust Fund ...................................................... 2
1.4. Trust Fund Subject to Claims .................................... 2
1.5. Definitions ..................................................... 3
ARTICLE 2.
Subscription, Dividends and Registration................................... 6
2.1. Subscription .................................................... 6
2.2. Dividends ....................................................... 6
2.3. Binding Effect................................................... 6
2.4. Status of Subscribed For Company Shares.......................... 6
2.5 Subscriber Trustee Default....................................... 7
2.6 Securities Matters............................................... 7
2.7 Registration Rights.............................................. 7
ARTICLE 3.
Allocation of Company Shares .............................................. 8
3.1. Allocations...................................................... 8
ARTICLE 4.
Compensation, Expenses and Tax Withholding ................................ 8
4.1. Compensation and Expenses ....................................... 8
4.2. Withholding of Taxes ............................................ 8
ARTICLE 5.
Administration of Trust Fund .............................................. 9
5.1. Management and Control of Trust Fund............................. 9
5.2. Investment of Funds.............................................. 9
5.3. Trustee's Administrative Powers................................. 9
5.4. Voting and Tendering of Company Shares.......................... 11
5.5. Indemnification................................................. 13
5.6. General Duty to Communicate to Committee........................ 14
ARTICLE 6.
Accounts and Reports of Trustee .......................................... 14
6.1. Records and Accounts of Trustee................................. 14
6.2. Fiscal Year..................................................... 14
6.3. Reports of Trustee.............................................. 14
6.4. Final Report.................................................... 14
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<PAGE> 3
PAGE
ARTICLE 7.
Succession of Trustee .................................................... 15
7.1. Resignation of Trustee.......................................... 15
7.2. Removal of Trustee.............................................. 15
7.3. Appointment of Successor Trustee................................ 15
7.4. Succession to Trust Fund Assets................................. 15
7.5. Continuation of Trust........................................... 16
7.6. Changes in Organization of Trustee.............................. 16
7.7. Continuance of Trustee's Powers in Event of
Termination of the Trust........................................ 16
ARTICLE 8.
Representations .......................................................... 16
8.1 Representations and Warranties of the Trustee................... 16
8.2 Representations and Warranties of the Company................... 17
ARTICLE 9.
Amendment or Termination ................................................. 17
9.1. Amendments...................................................... 17
9.2. Termination..................................................... 18
9.3. Form of Amendment or Termination................................ 18
ARTICLE 10.
Miscellaneous ............................................................ 19
10.1. Controlling Law................................................. 19
10.2. Committee Action ............................................... 19
10.3. Notices......................................................... 19
10.4. Severability.................................................... 19
10.5. Protection of Persons Dealing with
the Trust...................................................... 20
10.6. Tax Status of Trust............................................. 20
10.7. Participants to Have No Interest in the
Company by Reason of this Agreement............................ 20
10.8. Nonassignability................................................ 20
10.9. Gender and Plurals.............................................. 20
10.10. Counterparts.................................................... 20
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<PAGE> 4
PIONEER-STANDARD ELECTRONICS, INC.
SHARE SUBSCRIPTION AGREEMENT AND TRUST
THIS SHARE SUBSCRIPTION AGREEMENT AND TRUST (the "Agreement") made
effective as of July 2, 1996 between Pioneer-Standard Electronics, Inc., an Ohio
corporation, and Wachovia Bank of North Carolina, N.A., a national banking
association, as trustee.
W I T N E S S E T H :
WHEREAS, the Company (as defined below) desires to establish a Trust
(as defined below) in accordance with the laws of the State of Ohio and for the
purposes stated in this Agreement;
WHEREAS, the Trustee (as defined below) desires to act as trustee of
the Trust, and to hold legal title to the assets of the Trust, in trust, for the
purposes hereinafter stated and in accordance with the terms hereof;
WHEREAS, the Company or its subsidiaries have previously adopted
certain Plans (as defined below) and may adopt additional Plans in the future;
NOW, THEREFORE, the parties hereto hereby establish the Trust and agree
that the Trust will be comprised, held and disposed of, and does hereby
subscribe for certain Company Shares (as defined below) as follows:
ARTICLE 1.
Trust, Trustee and Trust Fund
1.1. Trust. The Trust established by this Agreement shall be known as
The Pioneer Stock Benefit Trust. The parties intend that the Trust will be an
independent legal entity with title to and power to convey all of its assets.
The parties hereto further intend that the Trust not be subject to the Employee
Retirement Income Security Act of 1974, as amended. The assets of the Trust will
be held, invested and disposed of by the Trustee, in accordance with the terms
of this Agreement as it may be amended from time to time.
1.2. Trustee. The trustee named above, and its successor or successors,
is hereby designated as the Trustee hereunder, to receive, hold, invest,
administer and distribute the Trust Fund in accordance with this Agreement, the
<PAGE> 5
provisions of which shall govern the power, duties and responsibilities of the
Trustee.
1.3. Trust Fund. The assets held at any time and from time to time
under the Trust collectively are herein referred to as the "Trust Fund" and
shall consist of contributions received by the Trustee, proceeds of any loans,
investments and reinvestment thereof, the earnings and income thereon, less
disbursements therefrom. Except as herein otherwise provided, title to the
assets of the Trust Fund shall at all times be vested in the Trustee and
securities that are part of the Trust Fund shall be held in such manner that the
Trustee's name and the fiduciary capacity in which the securities are held are
fully disclosed, subject to the right of the Trustee to hold title in bearer
form or in the name of a nominee, and the interests of others in the Trust Fund
shall be only the right to have such assets received, held, invested,
administered and distributed in accordance with the provisions of this
Agreement.
1.4. Trust Fund Subject to Claims. Notwithstanding any provision of
this Agreement to the contrary, the Trust Fund shall at all times remain subject
to the claims of the Company's general creditors under federal and state law.
In addition, the Board of Directors and Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the Company's
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending such determination, the
Trustee shall discontinue allocations pursuant to Article 3.
Unless the Trustee has actual knowledge of the Company's Insolvency, or
has received notice from the Company or a person claiming to be a creditor
alleging that the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may in all events rely on
such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's Insolvency.
If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue allocations pursuant to Article 3 and
shall hold the Trust Fund for the benefit of the Company's general creditors.
Nothing in
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this Agreement shall in any way diminish any rights of employees as general
creditors of the Company with respect to benefits due under the Plan(s) or
otherwise.
The Trustee shall resume allocations pursuant to Article 3 only after
the Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent).
1.5. Definitions. In addition to the terms defined elsewhere in this
Agreement, certain capitalized terms have the meanings set forth below:
Available Shares. "Available Shares" means the Company Shares which
have been acquired by the Trust pursuant to the Subscription Agreement embodied
in this Agreement and issued and delivered to the Trust by the Company but not
yet allocated (nor sold and the proceeds allocated) to one or more Plans.
Blackout Period. "Blackout Period" means those times during which (a)
the sale or other transfer of Company Shares by the Company, the Trustee or the
Plan trustees, would, in the reasonable judgment of counsel to the Company, (i)
require the disclosure by the Company of information which the Company has a
bona fide business purpose for preserving as confidential, (ii) result in a
violation of Section 10(b) of the Securities Exchange Act of 1934 or the rules
and regulations thereunder, or of applicable law in effect at the time, or (iii)
violate any order, judgment or decree of any court or regulatory authority or
agency, (b) the Company is unable to comply with the requirements of the
Commission with respect to information required to be contained or incorporated
by reference in any registration statement covering such issuances or sales or
(c) the Company determines to engage in a public offering of Company equity
securities and has been advised by a recognized investment banking firm selected
by the Company that, in such firm's opinion, the sale of Company Shares by the
Trustee would adversely affect such offering.
Board of Directors. "Board of Directors" means the board of directors
of the Company.
Change of Control. "Change of Control" means (i) a complete dissolution
or liquidation of the Company, (ii) a sale or other disposition of all or
substantially all of the Company's assets or (iii) a reorganization, merger, or
consolidation ("Business Combination") unless either (A) all or substantially
all of the shareholders of the Company immediately prior to the Business
Combination own more than 50%
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of the voting securities of the entity surviving the Business Combination, or
the entity which directly or indirectly controls such surviving entity, in
substantially the same proportion as they owned the voting securities of the
Company immediately prior thereto, or (B) the consideration (other than cash
paid in lieu of fractional shares or payment upon perfection of appraisal
rights) issued to shareholders of the Company in the Business Combination is
solely common shares which are publicly traded on an established securities
exchange in the United States.
Code. "Code" means the Internal Revenue Code of 1986, as amended.
Committee. "Committee" means a committee of the Company which is
charged by the Board of Directors with administration of the Trust.
Company. "Company" means Pioneer-Standard Electronics, Inc., an Ohio
corporation, or any successor thereto. References to the Company shall include
its subsidiaries and affiliates where appropriate.
Company Shares. "Company Shares" means common shares without par value
issued by the Company or any successor securities.
Employee Directed Amount. "Employee Directed Amount" means the number
of Company Shares, and fractions thereof, held or subscribed for by the Trust
and subject to voting and tendering decisions under Section 5.4 by an individual
Share Eligible Employee. The Employee Directed Amount for any Share Eligible
Employee at any time shall equal the product of (x) the total number of Company
Shares held or subscribed for by the Trust at such time and (y) a fraction, the
numerator of which is one and the denominator of which is the total number of
Share Eligible Employees listed in the applicable Share Eligibility
Certification.
Extraordinary Dividend. "Extraordinary Dividend" means any dividend or
other distribution of cash or other property (other than Company Shares) made
with respect to Company Shares, which the Board of Directors declares generally
to be other than an ordinary dividend.
Insolvent. "Insolvent" means (i) the inability of the Company to pay
its debts as they become due, or (ii) the Company being subject to a pending
proceeding as a debtor under the provisions of Title 11 of the United States
Code (Bankruptcy Code).
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Plans. "Plans" means the employee benefit plans and arrangements listed
on Schedule A hereto and any other employee benefit plan or arrangement of the
Company or its subsidiaries designated as such by the Board of Directors or the
Committee.
Plan Participant. "Plan Participant" means a participant in any of the
Plans.
Share Eligible Employee. "Share Eligible Employee" shall have the
meaning set forth in (a) or (b) below, as applicable:
(a) Prior to the first day of the Trust Year following the first Trust
Year in which occurs the allocation of any Company Shares from the Trust to any
Plan, "Share Eligible Employee" shall mean, as of any date, an individual
employee of the Company, including its subsidiaries and affiliates, who is
identified by the Committee as being a participant in a Plan.
(b) On or after the first day of the Trust Year following the first
Trust Year in which occurs the first allocation of Company Shares from the Trust
to any Plan, and while Company Shares remain in the Trust, "Share Eligible
Employee" shall mean, as of any date, an individual employee of the Company,
including its subsidiaries and affiliates, who is identified by the Committee as
being a participant in a Plan which received an allocation of Company Shares (or
proceeds from the sale of Company Shares) from the Trust during the most recent
prior Trust Year during which Company Shares were allocated, regardless of
whether that participant was a participant in such Plan, or received an
allocation of Company Shares, during such prior Trust Year.
Share Eligibility Certification. "Share Eligibility Certification"
means a certification to be provided to the Trustee by the Committee which
identifies the Share Eligible Employees as of a certain date.
Subscription Price. "Subscription Price" means the price to be paid by
the Trust for the Company Shares to be purchased pursuant to this Agreement.
Such Subscription Price shall be $______ per share, which is the fair market
value of such Company Shares determined as of the date of this Agreement.
Trust. "Trust" means "The Pioneer Stock Benefit Trust" established
pursuant to this Agreement as the same may be amended from time to time.
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Trustee. "Trustee" means Wachovia Bank of North Carolina, N.A. (not in
its corporate capacity but as trustee of the Trust) or any successor trustee.
Trust Fund. "Trust Fund" means the assets held at any time and from
time to time under the Trust and is more fully described in Section 1.3 hereof.
Trust Year. "Trust Year" means the period beginning on the date hereof
and ending on March 31, 1997 and each 12-month period beginning on April 1 and
ending on March 31 thereafter while the Trust remains in existence.
ARTICLE 2.
Subscription, Dividends and Registration
2.1. Subscription. The Trustee hereby subscribes for 5,000,000 (Five
Million) Company Shares at the Subscription Price to be acquired and paid for as
set forth on Schedule B hereto in exchange for the past services of Plan
Participants in accordance with Ohio General Corporation Law Sections 1701.17
and 1701.18 and any dividends paid on Company Shares held by the Trust. The
Company hereby accepts the Trustee's Company Share subscription. In satisfaction
of this subscription, each Trust Year during the term of the Trust, the Company
shall deliver to the Trustee at least the minimum number of Company Shares
necessary to achieve purchase of the aggregate "Minimum Amount" of Company
Shares set forth on Schedule B. The Company shall not be obligated to deliver
Company Shares during a Blackout Period. With respect to a Blackout Period
described in clause (a) or (b) of the definition of Blackout Period in Section
1.5 hereof, the Company's determination as to the existence and duration of a
Blackout Period and as to the timing of any public announcements concerning
developments in the Company's business shall be conclusive and binding. With
respect to a Blackout Period described in clause (c) of the definition of
Blackout Period in Section 1.5 hereof, such Blackout Period shall be deemed to
have expired upon the earliest to occur of (i) the expiration of any "lock-up"
period required by the underwriters to be applicable to the Trustee and (ii) the
abandonment of such Offering.
2.2. Dividends. Except as otherwise provided herein, dividends paid in
cash on Company Shares held by the Trust shall be paid to the Company as
consideration for the Company Shares to be delivered pursuant to this Agreement.
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Extraordinary Dividends shall be utilized as determined in good faith by the
Committee, which may include payments of subscription amounts.
2.3. Binding Effect. This Agreement shall effect a purchase and sale of
the Company Shares which are the subject hereof, and shall constitute a legally
binding obligation of the Company to issue such Company Shares and the Trust to
pay the purchase price of such Shares in accordance with the terms thereof,
enforceable against the Company and the Trustee and their successors in
interest.
2.4. Status of Subscribed For Company Shares. Upon execution of this
Agreement, ownership of the Company Shares herein described shall be transferred
to the Trustee, subject to the terms and restrictions hereof. Company Shares
subscribed for hereunder shall be deemed issued and outstanding and shall
entitle the Trustee to dividend, voting and all other rights of a shareholder
with respect thereto in accordance with and subject to the provisions of the
Ohio General Corporation Law as in effect from time to time. Certificates
representing such Company Shares will be delivered from time to time at such
time and under such conditions as are prescribed by this Agreement and the Ohio
General Corporation Law as in effect from time to time.
2.5. Subscriber Trustee Default. In the event the Trustee defaults in
the payment for the subscribed for Company Shares, the Board of Directors shall
have the right, at its sole option, to determine, pursuant to Section 1701.14,
Ohio Revised Code, whether and upon what terms the obligations of the Trustee
shall be released, settled or compromised.
2.6. Securities Matters. The Trustee represents and warrants that it is
purchasing the Company Shares for its own account, for investment and not for
the purpose of resale or redistribution, and that it will not sell, transfer or
otherwise dispose of the Company Shares unless the Company in its sole judgment,
determines based upon an opinion from counsel satisfactory to the Company that
such sale, transfer or other disposition may be made without registration of the
Company Shares under the Securities Act of 1933, or the Company Shares have been
registered under said Act.
2.7. Registration Rights. Whenever requested by the Trustee under this
Section 2.7, the Company shall, as expeditiously as reasonably possible, use its
best efforts to (1) prepare at the Company's expense and file with the SEC a
Form S-3 shelf resale Registration Statement and/or Form S-8
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Registration Statement with respect to such Company Shares and use its best
efforts to cause such Registration Statement to become and remain effective for
the term of this Agreement, (ii) prepare and file with the SEC such amendments
and supplements to such Registration Statement and the Prospectus used in
connection with such Registration Statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all Company Shares
covered by such Registration Statement, (iii) furnish to the Trustee such
numbers of copies of the Prospectus in conformity with the requirements of the
Act, and such other documents as it may reasonably request in order to
facilitate the disposition of the Company Shares owned by it, and (v) use its
best efforts to register and qualify the Company Shares covered by such
Registration Statement under such other securities, or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
Company Shares covered by the Registration Statement, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
ARTICLE 3.
Allocation of Company Shares
3.1. Allocations. Available Shares (or any proceeds from the sale
thereof) shall be allocated as directed by the Committee to the Plans in
accordance with the respective regular payment schedules for contributions to
such Plans. As of the end of each Trust Year, the Committee shall have allocated
at least the minimum number of Company Shares indicated for such Trust Year as
indicated in the "Minimum Amount" column of Schedule B attached hereto and may
allocate a number of Company Shares as indicated in the "Plan Amount" column
thereof or such greater number of Company Shares as it determines. Subject to
Schedule B, the Committee shall allocate such Company Shares among the Plans as
it shall deem appropriate in its discretion.
ARTICLE 4.
Compensation, Expenses and Tax Withholding
4.1. Compensation and Expenses. The Trustee shall be entitled to such
reasonable compensation for its services as may be agreed upon from time to time
by the Company and
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the Trustee and to be reimbursed for its reasonable legal, accounting and
appraisal fees, expenses and other charges reasonably incurred in connection
with the administration, management, investment and distribution of the Trust
Fund. Such compensation shall be paid, and such reimbursement shall be made out
of the Trust Fund or shall be paid directly by the Company, in its discretion.
Unless the Company pays the Trustee directly, the Company agrees to make
sufficient contributions to the Trust to pay such amounts owing the Trustee in
addition to those contributions required by Section 2.1.
4.2. Withholding of Taxes. The Trustee may withhold, require
withholding, or otherwise satisfy its withholding obligation, on any
distribution which it is directed to make, such amount as it may reasonably
estimate to be necessary to comply with applicable federal, state and local
withholding requirements. Upon settlement of such tax liability, the Trustee
shall distribute the balance of such amount. Prior to making any distribution
hereunder, the Trustee may require such release or documents from any taxing
authority, or may require such indemnity, as the Trustee shall reasonably deem
necessary for its protection.
ARTICLE 5.
Administration of Trust Fund
5.1. Management and Control of Trust Fund. Subject to the terms of this
Agreement, the Trustee shall have exclusive authority, discretion and
responsibility to manage and control the assets of the Trust Fund.
5.2. Investment of Funds.
Except as otherwise provided in Section 2.2 and in this Section 5.2,
the Trustee shall invest and reinvest the Trust Fund exclusively in Company
Shares, including any accretions thereto resulting from the proceeds of a tender
offer, recapitalization or similar transaction which, if not in Company Shares,
shall be reduced to cash as soon as practicable. The Trustee may invest any
portion of the Trust Fund temporarily pending investment in Company Shares,
distribution or payment of expenses in (i) investments in United States
Government obligations with maturities of less than one year, (ii)
interest-bearing accounts including but not limited to certificates of deposit,
time deposits, saving accounts and money market accounts with maturities of less
than one year in any bank, including the Trustee's, with aggregate capital in
excess of $1,000,000,000 and a rating from
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Moody's Investors Service of at least P1, or an equivalent rating from a
nationally recognized rating agency, which accounts are insured by the Federal
Deposit Insurance Corporation or other similar federal agency, (iii) obligations
issued or guaranteed by any agency or instrumentality of the United States of
America with maturities of less than one year, or (iv) mutual funds comprised
primarily of the investments described in (i), (ii) and (iii) above.
5.3. Trustee's Administrative Powers.
Except as otherwise provided herein, and subject to the Trustee's
duties hereunder, the Trustee shall have the following powers and rights, in
addition to those provided elsewhere in this Agreement or by law:
(a) to retain any asset of the Trust Fund;
(b) subject to Section 5.4 and Article 3, to sell, transfer, mortgage,
pledge, lease or otherwise dispose of, or grant options with respect to any
Trust Fund assets at public or private sale;
(c) with the consent of the Committee, to settle, submit to
arbitration, compromise, contest, prosecute or abandon claims and demands
in favor of or against the Trust Fund;
(d) to vote or to give any consent with respect to any securities,
including any Company Shares, held by the Trust either in person or by
proxy for any purpose, provided that the Trustee shall vote, tender or
exchange all Company Shares as provided in Section 5.4;
(e) to exercise any of the powers and rights of an individual owner
with respect to any asset of the Trust Fund and to perform any and all
other acts that in its judgment are necessary or appropriate for the proper
administration of the Trust Fund, even though such powers, rights and acts
are not specifically enumerated in this Agreement;
(f) with the reasonable consent of the Committee, to employ such
accountants, actuaries, investment bankers, appraisers, other advisors and
agents as may be reasonably necessary in collecting, managing,
administering, investing, valuing, distributing and protecting the Trust
Fund or the assets thereof or any borrowings of the Trustee made in
accordance with Section 5.3(b); and to pay their reasonable fees and
expenses, which
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shall be deemed to be expenses of the Trust and for which the Trustee shall
be reimbursed in accordance with Section 4.1;
(g) to cause any asset of the Trust Fund to be issued, held or
registered in the Trustee's name or in the name of its nominee, or in such
form that title will pass by delivery, provided that the records of the
Trustee shall indicate the true ownership of such asset;
(h) to utilize another entity as custodian to hold, but not invest or
otherwise manage or control, some or all of the assets of the Trust Fund;
(i) with the reasonable consent of the Committee, to consult with legal
counsel (who may also be counsel for the Trustee generally) with respect to
any of its duties or obligations hereunder; and to pay the reasonable fees
and expenses of such counsel, which shall be deemed to be expenses of the
Trust and for which the Trustee shall be reimbursed in accordance with
Section 4.1; and
(j) upon direction of the Committee to enter into any further
documentation of the Subscription Agreement embodied herein.
Notwithstanding the foregoing, neither the Trust nor the Trustee shall have
any power to, and shall not, engage in any trade or business.
5.4. Voting and Tendering of Company Shares.
(a) Voting of Company Shares. The Trustee shall follow the directions
of each Share Eligible Employee listed in the most recent Share Eligibility
Certification available to it as to the manner in which Company Shares held or
subscribed for by the Trust are to be voted in each matter brought before an
annual or special shareholders' meeting of the Company or the manner in which
any consent is to be executed, in each case as provided in this Section 5.4(a).
Before each such meeting of shareholders, the Trustee shall cause to be
furnished to each Share Eligible Employee a copy of the proxy solicitation
material received by the Trustee, together with a form requesting confidential
instructions as to how to vote the Company Shares held or subscribed for by the
Trustee.
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Upon timely receipt of directions from the Share Eligible Employees,
the Trustee shall on each such matter vote the Company Shares held or subscribed
for by the Trust (including fractional shares) as follows. The Company Shares
held or subscribed for by the Trust shall be voted by the Trustee as directed by
the Share Eligible Employees with each Share Eligible Employee directing his or
her Employee Directed Amount. Any Company Shares for which the Trustee does not
receive a signed voting-direction instrument shall be voted for, against or to
abstain in the same proportions as those Company Shares for which the Trustee
did receive instructions and the Trustee shall have no discretion in such
matter. Similar provisions shall apply in the case of any action by shareholder
consent without a meeting.
(b) Tender or Exchange of Company Shares. The Trustee shall use its
best efforts timely to distribute or cause to be distributed to each Share
Eligible Employee any written materials distributed to shareholders of the
Company generally in connection with any tender offer or exchange offer,
together with a form requesting confidential instructions on whether or not to
tender or exchange Company Shares held or subscribed for by the Trust. Upon
timely receipt of instructions from a Share Eligible Employee, the Trustee shall
tender such Share Eligible Employee's Employee Directed Amount if such Share
Eligible Employee has directed the Trustee to tender. A Share Eligible Employee
shall not be limited in the number of instructions to tender or withdraw from
tender which he or she may give but shall not have the right to give
instructions to tender or withdraw from tender after a reasonable time
established by the Trustee. If the Trustee shall not receive timely instruction
from a Share Eligible Employee as to the manner in which to respond to such a
tender or exchange offer, the Trustee shall not tender or exchange any Company
Shares with respect to which such Share Eligible Employee has the right of
direction, and the Trustee shall have no discretion in such matter.
(c) Procedural Matters. The Company shall maintain appropriate
procedures to ensure that all instructions by Share Eligible Employees are
collected, tabulated, and transmitted to the Trustee without being divulged or
released to any person affiliated with the Company or its affiliates. All
actions taken by Share Eligible Employees and the contents of the Share
Eligibility Certification shall be held confidential by the Trustee and shall
not be divulged or released to any person, other than (i) agents of the Trustee
who are not affiliated with the Company or its affiliates or (ii) by virtue of
the execution by the Trustee of any proxy,
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consent or letter of transmittal for the Company Shares held in the Trust.
(d) Intention Regarding Voting and Tendering. This Agreement is being
entered into and the Trust is hereby established with the purpose of acquiring
and holding Company Shares for the purpose of paying for benefits for employees
of the Company and its subsidiaries and affiliates under the Plans. Therefore,
it is the intent of this Agreement that such employees, represented by the Share
Eligible Employees, instruct the Trustee for all purposes with respect to the
voting and tendering of Company Shares held by or subscribed for by the Trustee.
The Trustee shall, therefore, act in accordance with such instruction and shall
not override or otherwise disregard such instruction or otherwise have
discretion in the carrying out of such instruction.
5.5. Indemnification.
(a) To the extent lawfully allowable, the Company shall and hereby does
indemnify and hold harmless the Trustee from and against any claims, demands,
actions, administrative or other proceedings, causes of action, liability, loss,
cost, damage or expense (including reasonable attorneys' fees), which may be
asserted against it, in any way arising out of or incurred as a result of its
action or failure to act in connection with the operation and administration of
the Trust; provided that such indemnification shall not apply to the extent that
the Trustee has acted in willful or negligent violation of applicable law or its
duties under this Trust or in bad faith. The Trustee shall be under no liability
to any person for any loss of any kind which may result (i) by reason of any
action taken by it in accordance with any direction of the Committee or any
Share Eligible Employee acting pursuant to Section 5.4 (hereinafter collectively
referred to as the "directing persons"), (ii) by reason of its failure to
exercise any power or authority or to take any action hereunder because of the
failure of any such directing person to give directions to the Trustee, as
provided for in this Agreement, or (iii) by reason of any act or omission of any
of the directing persons with respect to its duties under the Trust established
by this Agreement. The Trustee shall be fully protected in acting upon any
instrument, certificate, or paper delivered by the Committee or any other
directing person and believed in good faith by the Trustee to be genuine and to
be signed or presented by the proper person or persons, and the Trustee shall be
under no duty to make any investigation or inquiry as to any statement contained
in
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any such writing, but may accept the same as conclusive evidence of the truth
and accuracy of the statements therein contained.
(b) The Company may, but shall not be required to, maintain liability
insurance to insure its obligations hereunder. If any payments made by the
Company or the Trust pursuant to this indemnity are covered by insurance, the
Company or the Trust (as applicable) shall be subrogated to the rights of the
indemnified party against the insurance company.
(c) Without limiting the generality of the foregoing, the Company may,
at the request of the Trustee, advance to the Trustee reasonable amounts of
expenses, including reasonable attorneys' fees and expenses, which the Trustee
advised have been incurred in connection with its investigation or defense of
any claim, demand, action, cause of action, administrative or other proceeding
arising out of or in connection with the Trustee's performance of its duties
under this Agreement.
5.6. General Duty to Communicate to Committee. The Trustee shall
promptly notify the Committee of all communications with or from any government
agency or with respect to any legal proceeding with regard to the Trust and with
or from any Plan Participants concerning their entitlements under the Plans or
the Trust.
ARTICLE 6.
Accounts and Reports of Trustee
6.1. Records and Accounts of Trustee. The Trustee shall maintain
accurate and detailed records and accounts of all transactions of the Trust,
which shall be available at all reasonable times for inspection or audit by any
person designated by the Committee and which shall be retained as required by
applicable law.
6.2. Fiscal Year. The fiscal year of the Trust shall be the twelve
month period beginning on April 1 and ending on March 31.
6.3. Reports of Trustee. The Trustee shall prepare and present to the
Committee a report for the period ending on the last day of each fiscal year,
and for such shorter periods as the Committee may reasonably request, listing
all securities and other property acquired and disposed of and
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all receipts, disbursements and other transactions effected by the Trust after
the date of the Trustee's last account, and further listing all cash,
securities, and other property held by the Trust, together with the fair market
value thereof, as of the end of such period. In addition to the foregoing, the
report shall contain such information regarding the Trust Fund's assets and
transactions as the Committee in its discretion may reasonably request.
6.4. Final Report. In the event of the resignation or removal of a
Trustee hereunder, the Committee may request and the Trustee shall then with
reasonable promptness submit, for the period ending on the effective date of
such resignation or removal, a report similar in form and purpose to that
described in Section 6.3.
ARTICLE 7.
Succession of Trustee
7.1. Resignation of Trustee. The Trustee or any successor thereto may
resign as Trustee hereunder at any time upon delivering a written notice of such
resignation, to take effect thirty (30) days after the delivery thereof to the
Committee, unless the Committee accepts shorter notice; provided, however, that
no such resignation shall be effective until a successor Trustee has assumed the
office of Trustee hereunder.
7.2. Removal of Trustee. The Trustee or any successor thereto may be
removed by the Company by delivering to the Trustee so removed an instrument
executed by the Committee. Such removal shall take effect at the date specified
in such instrument, which shall not be less than thirty (30) days after delivery
of the instrument, unless the Trustee accepts shorter notice; provided, however,
that no such removal shall be effective until a successor Trustee has assumed
the office of Trustee hereunder.
7.3. Appointment of Successor Trustee. Whenever the Trustee or any
successor thereto shall resign or be removed or a vacancy in the position shall
otherwise occur, the Board of Directors shall use its best efforts to appoint a
successor Trustee as soon as practicable after receipt by the Committee of a
notice described in Section 7.1, or the delivery to the Trustee of a notice
described in Section 7.2, as the case may be, but in no event more than one
hundred eighty (180) days after receipt or delivery, as the case may be, of such
notice. A successor Trustee's appointment shall not
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become effective until such successor shall accept such appointment by
delivering its acceptance in writing to the Company. If a successor is not
appointed within such 180 day period, the Trustee, at the Company's expense, may
petition a court of competent jurisdiction for appointment of a successor.
7.4. Succession to Trust Fund Assets. The title to all property held
hereunder shall vest in any successor Trustee acting pursuant to the provisions
hereof without the execution or filing of any further instrument, but a
resigning or removed Trustee shall execute all instruments and do all acts
necessary to vest title in the successor Trustee. Each successor Trustee shall
have, exercise and enjoy all of the powers, both discretionary and ministerial,
herein conferred upon its predecessors. A successor Trustee shall not be obliged
to examine or review the accounts, records, or acts of, or property delivered
by, any previous Trustee and shall not be responsible for any action or any
failure to act on the part of any previous Trustee.
7.5. Continuation of Trust. In no event shall the legal disability,
resignation or removal of a Trustee terminate the Trust, but the Board of
Directors shall forthwith appoint a successor Trustee in accordance with Section
7.3 to carry out the terms of the Trust.
7.6. Changes in Organization of Trustee. In the event that any
corporate Trustee hereunder shall be converted into, shall merge or consolidate
with, or shall sell or transfer substantially all of its assets and business to,
another corporation, state or federal, the corporation resulting from such
conversion, merger or consolidation, or the corporation to which such sale or
transfer shall be made, shall thereunder become and be the Trustee under the
Trust with the same effect as though originally so named.
7.7. Continuance of Trustee's Powers in Event of Termination of the
Trust. In the event of the termination of the Trust, as provided herein, the
Trustee shall dispose of the Trust Fund in accordance with the provisions
hereof. Until the final distribution of the Trust Fund, the Trustee shall
continue to have all powers provided hereunder as necessary or expedient for the
orderly liquidation and distribution of the Trust Fund.
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ARTICLE 8.
Representations
8.1. Representations and Warranties of the Trustee. The Trustee
represents and warrants to the Company as follows:
(a) The Trustee is validly existing and in good standing as a National
Banking Association.
(b) The Trustee has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement in
accordance with its terms.
(c) This Agreement has been duly authorized, executed and delivered by
the Trustee and is its valid and legally binding obligation, enforceable against
the Trustee, except to the extent that such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
8.2. Representations and Warranties of the Company. The Company
represents and warrants to the Trust Company as follows:
(a) The Company is validly existing and in good standing as a
corporation under the laws of the state of Ohio.
(b) The Company has full corporate power and authority (i) to execute
and deliver this Agreement and to perform its obligations under this Agreement
in accordance with its terms and (ii) to issue the Company Shares as
contemplated hereby.
(c) This Agreement has been duly authorized, executed and delivered by
the Company and is its valid and legally binding obligation, enforceable against
the Company, except to the extent that such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
-17-
<PAGE> 21
(d) The Company Shares issued pursuant to this Agreement have been
validly authorized and reserved for issuance and duly authorized for listing on
NASDAQ, and when paid for and delivered in accordance with this Agreement, will
be validly issued and outstanding, fully paid and nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof.
ARTICLE 9.
Amendment or Termination
9.1. Amendments. Except as otherwise provided herein, the Company may
amend this Agreement, including the Subscription Agreement and/or the Trust
Agreement embodied herein, at any time and from time to time in any manner which
it deems desirable, provided that no amendment may change (i) the allocation
formula contained in Section 3.1 so as to change the number of Available Shares
in any Trust Year, (ii) the substantive terms of Sections 9.1, 9.2 or 9.3, or
(iii) the duties of the Trustee without the Trustee's consent, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, the Company
shall retain the power under all circumstances to amend this Agreement,
including the Subscription Agreement and/or the Trust Agreement embodied herein,
to correct any errors or clarify any ambiguities or similar issues of
interpretation therein and to make equitable adjustments in the event of stock
splits, stock dividends, changes in the capital of the Company and similar
transactions.
9.2. Termination. Subject to the terms of this Section 9.2, the Trust
shall terminate on March 31, 2011 or any earlier date on which the Company Share
subscription is paid in full and all Company Shares have been allocated from the
Trust (the "Termination Date"). The Board of Directors may terminate the Trust
at any time in its sole discretion prior to the Termination Date (whether or not
a transaction that if consummated would constitute a Change of Control is then
pending) or at such time as there are no Company Shares subject to an
outstanding subscription agreement. In the event of such a Termination, the
Subscription Agreement embodied in this Agreement shall be of no further force
or effect and any Company Shares held by the Trustee shall be allocated to the
Plans as directed by the Committee. The Trust shall also terminate automatically
upon the Company giving the Trustee notice of a Change of Control. In the event
of a termination upon a Change of Control, the Trustee shall use the proceeds of
the sale of the subscribed for Company Shares
-18-
<PAGE> 22
to pay the subscription price and any excess funds shall be allocated to the
Plans as directed by the Committee.
9.3. Form of Amendment or Termination. Any amendment or termination of
this Agreement, including the Subscription Agreement and/or the Trust Agreement
embodied herein, shall be evidenced by an instrument in writing signed by an
authorized officer of the Company, certifying that said amendment or termination
has been authorized and directed by the Company or the Board of Directors, as
applicable, and, in the case of any amendment, shall be consented to by
signature of an authorized officer of the Trustee, if required by Section 9.1.
ARTICLE 10.
Miscellaneous
10.1. Controlling Law. The laws of the State of Ohio shall be the
controlling law in all matters relating to the Trust, without regard to
conflicts of law.
10.2. Committee Action. Any action required or permitted to be taken by
the Committee may be taken on behalf of the Committee by any individual so
authorized. The Company shall furnish to the Trustee the name and specimen
signature of each member of the Committee upon whose statement of a decision or
direction the Trustee is authorized to rely. Until notified of a change in the
identity of such person or persons, the Trustee shall act upon the assumption
that there has been no change.
10.3. Notices. All notices, requests, or other communications required
or permitted to be delivered hereunder shall be in writing, delivered by
registered or certified mail, return receipt requested as follows:
To the Company:
Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
Attention: John V. Goodger
To the Trustee:
-19-
<PAGE> 23
Wachovia Bank of North Carolina, N.A.
Post Office Box 3099
Winston-Salem, N.C. 27150
Attention: Beverly H. Wood
Any party hereto may from time to time, by written notice given as aforesaid,
designate any other address to which notices, requests or other communications
addressed to it shall be sent.
10.4. Severability. If any provision of this Agreement shall be held
illegal, invalid or unenforceable for any reason, such provision shall not
affect the remaining parts hereof, but this Agreement shall be construed and
enforced as if said provision had never been inserted herein.
10.5. Protection of Persons Dealing with the Trust. No person dealing
with the Trustee shall be required or entitled to monitor the application of any
money paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to authorities granted to it hereunder or to
authorizations or directions herein required.
10.6. Tax Status of Trust. It is intended that the Company, as grantor
hereunder, be treated as the owner of the entire Trust and the trust assets
under Section 671, et seq. of the Code. Until advised otherwise, the Trustee may
presume that the Trust is so characterized for federal income tax purposes and
shall make all filings of tax returns on that presumption.
10.7. Participants to Have No Interest in the Company by Reason of this
Agreement. Neither the execution of this Agreement, nor the creation of the
Trust nor anything contained in the Trust nor any amendment or termination of
the Agreement or the Trust shall be construed as giving any person, including
any individual employed by the Company or any subsidiary or affiliate of the
Company, any equity or other interest in the assets, business, or affairs of the
Company except to the extent that any such individuals are entitled to exercise
shareholder rights with respect to Company Shares pursuant to Section 5.4.
10.8. Nonassignability. No right or interest of any person to receive
distributions from the Trust shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including, but
-20-
<PAGE> 24
not by way of limitation, execution, levy, garnishment, attachment, pledge, or
bankruptcy, but excluding death or mental incompetency, and no right or interest
of any person to receive distributions from the Trust shall be subject to any
obligation or liability of any such person, including claims for alimony or the
support of any spouse or child.
10.9. Gender and Plurals. Whenever the context requires or permits, the
masculine gender shall include the feminine gender and the singular form shall
include the plural form and shall be interchangeable.
10.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Agreement to be signed, and their seals, if any, affixed hereto, by their
authorized officers all as of the day, month and year first above written.
PIONEER-STANDARD ELECTRONICS, INC.
By /s/ James L. Bayman
---------------------------------
James L. Bayman
Chairman of the Board and
President
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By /s/ Joe Long
---------------------------------
-21-
<PAGE> 25
SCHEDULE A
Plans To Which Company Shares Are Allocable
1. Group Insurance Plan (Life)
2. Medical Plan
3. Dental Care Plan
4. Long Term Disability Plan
5. Vision Plan
6. Pioneer-Standard Electronics, Inc. Employees' Profit
Sharing Retirement Plan
7. Pioneer Technologies Group, Inc. Profit Sharing Plan
8. Employee Bonuses and Commissions
9. Employee Compensation
10. Pioneer-Standard Electronics, Inc. 1991 Stock Option
Plan
11. Pioneer-Standard Electronics, Inc. 1982 Incentive
Stock Option Plan
<PAGE> 26
SCHEDULE B
Minimum Allocation Table
<TABLE>
<CAPTION>
Trust Plan Minimum
Year Amount Amount
---- ------ ------
<S> <C> <C>
1 426,520 100,000
2 837,530 220,000
3 1,233,594 375,000
4 1,615,256 500,000
5 1,983,039 650,000
6 2,337,449 810,000
7 2,678,970 1,000,000
8 3,008,073 1,200,000
9 3,325,209 1,425,000
10 3,630,812 1,700,000
11 3,925,302 2,000,000
12 4,209,084 2,250,000
13 4,482,546 2,600,000
14 4,746,064 3,000,000
15 5,000,000 5,000,000
</TABLE>
<PAGE> 1
EXHIBIT 25.1
Securities Act of 1933 File No.___________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------------------------------------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
PURSUANT TO SECTION 305(b) (2) / X /
--------------------------------------------------
STAR BANK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0841368
(IRS Employer Identification No.)
425 WALNUT STREET
CINCINNATI, OHIO 45202
(Address of Principal Executive Offices (Zip Code)
-------------------------------------------------
Keith A. Maurmeier
Senior Trust Officer
Star Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
(513) 632-2047
(Name, address, and telephone number of agent for services)
PIONEER-STANDARD ELECTRONICS, INC.
(Exact name of obligor as specified in its charter)
OHIO 34-0907152
(State of Incorporation) (IRS Employer Identification No.)
4800 EAST 131ST STREET CLEVELAND, OH 44105
(Address of principal executive offices) (Zip Code)
SENIOR DEBT SECURITIES
(Title of the Indenture securities)
<PAGE> 2
1. General Information. Furnish the following information as
Trustee --
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Cleveland, Ohio
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust
powers.
2. Affiliations with obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
The obligor is not an affiliate of the Trustee
(including its parent and any affiliates).
3. Voting Securities of the trustee. Furnish the following
information as to each class of voting securities of the
trustee (and its parent).
As of _____________ (insert date within 31 days)
Col A. Col B
(Title of Class) (Amount Outstanding)
4. Trusteeships under other Indentures. If the trustee is a trustee under
another Indenture under which any other securities, or certificates
of interest or participation in any other securities, of the
obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other
indenture.
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of
Section 310(b) (1) of the Act arises as a result of the
trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as
compared with the securities issued under such other
indenture.
<PAGE> 3
5. Interlocking directorates and similar relationships with the
obligor or underwriters. If the trustee (including its parent and
any other affiliates) or any of the directors or executive officers
of the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any underwriter
for the obligor, identify each such person having any such
connection and state the nature of each such connection.
6. Voting securities of the trustee (including its parent and
any affiliate) owned by the obligor or its officials. Furnish the
following information as to the voting securities of the trustee
(including its parent and any affiliates) owned beneficially by the
obligor and each director, partner and executive officer of the obligor:
As of _______________________ (insert date within 31 days)
Col. A. Col. B. Col. C Col. D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C
7. Voting securities of the trustee (including its parent and any
affiliates) owned by underwriters or their officials. Furnish the
following information as to the voting securities of the trustee
(including its parent and any affiliates) owned beneficially by
each underwriter for the obligor and each director, partner, and
executive officer of each such underwriter:
As of ___________________(insert date within 31 days)
Col. A. Col B. Col. C Col. D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C
<PAGE> 4
8. Securities of the obligor owned or held by the trustee
(including its parent and any affiliates). Furnish the following
information as to securities of the obligor owned beneficially or held
as collateral security for obligations default by the trustee (including
its parent and any affiliates):
As of ___________________(insert date within 31 days)
Col. A Col. B Col. C Col. D
Amount Owned
Whether the Beneficially or
Securities Are Held as Collateral Percent of
Voting or Security for Class Represented
Nonvoting obligations in by Amount Given
Title of Class Securities Default in Col. C
9. Securities of underwriters owned or held by the trustee(including its
parent and any affiliates). If the trustee (including its parent and any
affiliates) owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor,
furnish the following information as to each class of securities of such
underwriter any of which are so owned or held by the trustee:
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
10. Ownership or holdings by the trustee (including its parent and any
affiliates) of voting securities of certain affiliates or security
holders of the obligor. If the trustee (including its parent and any
affiliates) owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10% or more of the voting securities
<PAGE> 5
of the obligor or (2) is an affiliate, other than a subsidiary, of the
obligor, furnish the following information as to the voting securities
of such person:
As of _______________________(insert date within 31 days)
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
11. Ownership or holdings by the trustee (including its parent and any
affiliates) of any securities of a person owning 50 percent or more of
the voting securities of the obligor. If the trustee (including its
parent and any affiliates) owns beneficially or holds as collateral
security for obligations in default any securities of a person who, to
the knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to each
class of securities of such person any of which are so owned or held by
the trustee (including its parent and affiliates):
As of ______________________(insert date within 31 days)
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
<PAGE> 6
12. Indebtedness of the Obligor to the Trustee. Except as noted
in the instructions, if the obligor is indebted to the trustee, furnish
the following information:
As of ____________________(insert date with 31 days)
Col. A Col. B Col. C
Amount
Nature of Indebtedness Outstanding Due Date
13. Defaults by the Obligor.
a) State whether there is or has been a default with respect
to the securities under this indenture. Explain the nature
of any such default.
-NONE-
b) If the Trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding
series or securities under the indenture, state whether
there has been a default under any such indenture or
series, identify the indenture or series affected, and
explain the nature of any such default.
As of January 17, 1994 (insert date within 31 days)
-NONE-
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
<PAGE> 7
14. Affiliations with the Underwriters. If any underwriter is an
affiliate of the trustee (including its parent and any affiliates),
described each such affiliation.
15. Foreign Trustee. Identify the order or rule pursuant to which the
foreign trustee is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act.
16. List of Exhibits. List below all exhibits filed as part of this
statement of eligibility.
1. (a) A copy of the Articles of Association of Star Bank,
National Association, Cincinnati (now Star Bank,
National Association) as now in effect.
(b) A copy of the Amended Articles of Association dated
June 14, 1991, changing the name of the association
to Star Bank, National Association.
2. (a) A copy of the certificate of authority of The First
National Bank of Cincinnati (now Star Bank, National
Association) to commence business dated September 1,
1922.
(b) A copy of a Certificate of the Comptroller of the
Currency dated December 21, 1973, authorizing F N
National Bank to commence the business of banking.
(c) A copy of a Certificate of the Comptroller of the
Currency dated December 28, 1973, approving the
merger of The First National Bank of Cincinnati (now
Star Bank, National Association) into F N National
Bank under the title "The First National Bank of
Cincinnati" effective January 2, 1974.
(d) A copy of a letter dated June 8, 1988, from the
Comptroller of the Currency indicating the change in
the name of the association to Star Bank, National
Association, Cincinnati, effective July 1, 1988.
<PAGE> 8
(e) A copy of a letter dated July 15, 1991, from the
Comptroller of the Currency indicating the change in
the name of the association to Star Bank, National
Association, effective June 14, 1991.
3. A copy of the authorization of The First National Bank of Cincinnati
(now Star Bank, National Association) to exercise corporate trust powers.
4. A copy of existing By-Laws to Star Bank, National Association,
Cincinnati (now Star Bank, National Association)
5. The consent of the Trustee required by section 321 (b) of the Trust
Indenture Act of 1939.
6. A copy of the latest report of condition of Star Bank, National
Association, published pursuant to law or the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Star Bank, National Association, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Cincinnati and State
of Ohio on the 28th day of June, 1996.
STAR BANK, NATIONAL ASSOCIATION
By: /s/ Keith A. Maurmeier
------------------------------------------
Keith A. Maurmeier
Senior Trust Officer
<PAGE> 9
EXHIBIT 1 (a)
STAR BANK, NATIONAL ASSOCIATION, CINCINNATI
CHARTER NO. 24
ARTICLES OF ASSOCIATION
FIRST: The title of this Association shall be "Star Bank, National Association,
Cincinnati."*
SECOND: The main office of the Association shall be in the City of Cincinnati,
County of Hamilton, State of Ohio. The general business of the Association shall
be conducted at its main office and its branches.
THIRD: The Board of Directors of this Association shall consist of not less than
five (5) nor more than twenty-five (25) shareholders, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any annual or special meeting thereof. Unless
otherwise provided by the laws of the United States, any vacancy in the Board of
Directors for any reason, including an increase in the number thereof, may be
filled by action of the Board of Directors.
FOURTH: The annual meeting of the shareholders for the election of Directors and
the transaction of whatever other business may be brought before said meeting
shall be held at the main office or such other place as the Board of Directors
may designate, on the day of each year specified therefor by the Bylaws, but if
no election is held on that day, it may be held on any subsequent day according
to the provisions of law; and all elections shall be held according to such
lawful regulations as may be prescribed by the Board of Directors.
FIFTH: The authorized amount of capital stock of this Association shall be
3,640,000 shares of common stock of the par value of five dollars ($5.00) each,
but said capital stock may be increased or decreased from time to time, in
accordance with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
The Association, at any time and from time to time, may authorized and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders.
*Amended June 14, 1991, see attached.
<PAGE> 10
SIXTH: The Board of Directors shall appoint one of its members President of this
Association, who shall be Chairman of the Board, unless the Board appoints
another Director to be the Chairman. The Board of Directors shall have the power
to appoint one or more Vice Presidents; and to appoint a Cashier and such other
officers and employees as may be required to transact the business of this
Association. The Board of Directors shall have the power to define the duties of
the officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all Bylaws that it may be lawful for them to make and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
The Board of Directors, without need for approval of shareholders, shall have
the power to change the location of the main office of this Association, subject
to such limitations as from time to time may be provided by law; and shall have
the power to establish or change the location of any branch or branches of the
Association to any other location, without the approval of the shareholders, but
subject to the approval of the Comptroller of the Currency.
SEVENTH: The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
EIGHTH: The Board of Directors of this Association, the Chairman of the Board,
the President, or any three or more shareholders owning, in the aggregate, not
less twenty-five percent of the stock of this Association, may call a special
meeting of shareholders at any time. Unless otherwise provided by the laws of
the United States, a notice of the time, place, and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail, postage
prepaid, mailed at least ten days prior to the date of such meeting to each
shareholder of record at his address as shown upon the books of this
Association.
NINTH: Any person, his heirs, executors, or administrators, may be indemnified
or reimbursed by the Association for reasonable expenses actually incurred in
connection with any action, suit, or proceeding, civil or criminal, to which he
or they shall be made a party by reason of his being or having been a director,
officer, or employee of the Association or of any firm, corporation, or
organization which he served in any such capacity at the request of the
Association. Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for gross
negligence, willful misconduct or criminal acts in the performance of his duties
to the Association; and, provided further, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding which has been made the subject of a compromise settlement except
with the approval of a court of competent jurisdiction, or the holders of record
of a majority of the outstanding shares of the Association, or the Board of
Directors, acting by vote of Directors not parties to the same or substantially
the same action, suit, or proceeding, constituting a majority of the whole
number of Directors. The foregoing right of indemnification shall not be
exclusive of other rights to which such person, his heirs, executors, or
administrators, may be entitled as a matter of law. The
<PAGE> 11
Association may, upon the affirmative vote of a majority of its Board of
Directors, purchase insurance for the purpose of indemnifying its directors,
officers and other employees to the extent that such indemnification is allowed
in the preceding paragraph. Such insurance may, but need not, be for the benefit
of all directors, officers, or employees.
TENTH: These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law and in that case by the vote of the holders
of such greater amount.
August 18, 1988
<PAGE> 12
EXHIBIT 1(B)
STAR BANC
CORPORATION
June 14, 1991
Deputy Comptroller
Central District
Office of the Comptroller of the Currency
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605
Dear Deputy Comptroller:
Re: Letter of Notification
Star Bank, National Association, Cincinnati, Charter #24 intends to change
its corporate title to Star Bank, National Association. The effective date of
the change is June 14, 1991.
A certified copy of the amendment to the articles of association is
enclosed. The amendment conforms to the requirements of 12 USC 21 a.
Sincerely,
/s/
F. Kristen Koepcke
FKK:bjt
Enclosure
<PAGE> 13
EXHIBIT 1 (b)
MINUTES OF SPECIAL MEETING OF THE SHAREHOLDER
STAR BANK, NATIONAL ASSOCIATION, CINCINNATI
A Special Meeting of the shareholder of Star Bank, National Association,
Cincinnati (the "Bank") was held on June 14, 1991.
Mr. Oliver W. Waddell called the meeting to order and selected Mr. F. Kristen
Koepke to act as Secretary.
The Secretary reported that all the outstanding shares of the Bank were
represented at this meeting and that the shareholder had waived notice of this
special meeting. Therefore, a quorum was present.
Mr. Waddell stated that the purpose of the meeting was to consider a proposed
name change for the Bank as recommended by the Board of Directors. On motion
duly made and carried, the following resolution was adopted:
RESOLVED, That Article First of the Articles of Association of
the Bank be amended in its entirely to read as follows:
FIRST: The title of this Association shall be "Star Bank,
National Association."
There being no further business to come before the meeting, on motion duly made
and carried, the meeting was adjourned.
/s/
--------------------------------------
F. Kristen Koepke, Secretary
Approved:
/s/
- -------------------------------
Oliver W. Waddell
Chairman, Star Banc Corporation,
Shareholder Certified Copy
/s/
--------------------------------------
Secretary
<PAGE> 14
EXHIBIT 2 (a)
COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE BUSINESS:
NO. 24
E Pluribus Unum
TREASURY DEPARTMENT
Office of Comptroller of the Currency
Washington, D.C., September 1, 1992
WHEREAS, the Act of Congress of the United States, entitled, "An Act to
amend section 5136, Revised Statutes of the United States, relating to corporate
powers of associations, so as to provide succession thereof for a period of
ninety-nine years or until dissolved, and to apply said section as so amended to
all national banking association", approved by the President on July 1, 1922,
provided that all national banking associations organized and operating under
any law of the United States on July 1, 1992 should have succession until
ninety-nine years from that date, unless such association should be sooner
dissolved by the act of its shareholders owning two-thirds of its stock, or
unless its franchise should become forfeited by reason of violation of law, or
unless it should be terminated by an Act of Congress hereinafter enacted;
NOW THEREFORE, I, D. R. Crissinger Comptroller of the Currency, do hereby
certify that The First National Bank of Cincinnati and State of Ohio, was
organized and operating under the laws of the United States on July 1, 1922, and
that its corporate existence was extended for the period of ninety-nine years
from that date in accordance with and subject to the condition in the Act of
Congress hereinbefore recited.
(SEAL) IN TESTIMONY WHEREOF, witness my hand
and seal of office this first day of
September, 1922
(Signed) D. R. Crissinger
---------------------------------
Comptroller of the Currency
<PAGE> 15
EXHIBIT 2 (b)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
Whereas, satisfactory evidence has been presented to the Comptroller of the
Currency that "FN NATIONAL BANK". located in CINCINNATI, State of OHIO, has
complied with all provisions of the Statutes of the United States required to be
complied with before being authorized to commence the business of banking as
National Banking Association;
Now, therefore, I hereby certify that the above-named association is
authorized to commence the business of banking as a National Banking
Association.
In testimony whereof, witness my signature and seal of
SEAL office this 21st day of December, 1913.
/s/
------------------------------------------------------
<PAGE> 16
EXHIBIT 2 (c)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
WHEREAS, satisfactory evidence has been presented to the Comptroller of the
Currency that all requisite legal and corporate action has been taken, in
accordance with the statutes of the United States, to merge The First National
Bank of Cincinnati, Cincinnati, Ohio, into FN National Bank, Cincinnati, Ohio,
under the charter of FN National Bank and under the title "The First National
Bank of Cincinnati," with capital stock of $18,200,000;
NOW, THEREFORE, it is hereby certified that such merger was approved
November 29, 1973, and is effective as of the opening of business January 2,
1974.
IN TESTIMONY WHEREOF witness my signature and seal
of office this 28th day of December, 1973
SEAL /s/
-----------------------------------------------------
James E. Smith
Comptroller of the Currency
<PAGE> 17
EXHIBIT 2(d)
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Central District
One Financial Plaza, Suite 2700
440 South LaSalle Street
Chicago, Illinois 60605
June 8, 1988
Mr. Raymond D. Beck
Secretary & Counsel
First National Cincinnati Corporation
First National Bank Center
425 Walnut Street
Cincinnati, Ohio 45201-1038
Dear Mr. Beck:
The office of the Comptroller of the Currency acknowledges receipt of your
letters concerning First National Cincinnati Corporation's banking subsidiarys'
title changes and the appropriate amendments to each bank's articles of
association. The Office has recorded the following banks' title changes
effective July 1, 1988.
Old Title New Title
The First National Bank of Ironton Star Bank, National Association,
Ironton, Ohio Tri-State
Charter No. 16607
Farmers and Traders National Bank Star Bank, National Association
Hillsboro, Ohio Hillsboro
Charter No. 17646
The First National Bank of Cincinnati Star Bank, National Association
Cincinnati, Ohio Cincinnati
Charter No. 24
The First National Bank & Trust Company Star Bank, National Association
Troy, Ohio Troy
Charter No. 9336
<PAGE> 18
Page 2
Mr. Raymond D. Beck (cont'd)
The Second National Bank of Hamilton Star Bank, National Association
Hamilton, Ohio Butler County
Charter No. 17200
The Second National Bank of Richmond Star Bank, National Association
Richmond, Indiana Eastern Indiana
Charter No. 1988
The First National Bank of Aurora Star Bank, National Association
Aurora, Indiana Aurora
Charter No. 699
The Peoples National Bank of Lawrenceburg Star Bank, National Association
Lawrenceburg, Indiana Southeastern Indiana
Charter No. 2612
Newport National Bank Star Bank, National Association
Newport, Kentucky Campbell County
Charter No. 4765
The First National Bank Star Bank, National Association
Sidney, Ohio Sidney
Charter No. 5214
Very truly yours,
David J. Rogers
National Bank Examiner
Analysis Division
<PAGE> 19
EXHIBIT 2(e)
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Central District
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605
July 15, 1991
Mr. F. Kristen Koepcke
Vice President, General Counsel and Secretary
Star Banc Corporation
425 Walnut Street
P.O. Box 1038
Cincinnati, Ohio 45201-1038
Dear Mr. Koepcke:
The Office of the Comptroller of the Currency has received your letter
concerning the title change and the appropriate amendment to the bank's articles
of association. The Office has recorded that as of June 14, 1991, the title of
Star Bank, National Association, Cincinnati, Charter No. 24, was changed to Star
Bank, National Association.
As a result of the Garn-St Germain Depository Institutions Act of 1982, this
Office is no longer responsible for the approval of national bank name changes
nor does it maintain official records on the use of alternate titles. The use of
other titles or the retention of the rights to any previously used title is the
responsibility of the bank's board of directors. Legal counsel should be
consulted to determine whether or not the new title, or any previously used
title, could be challenged by competing institutions under the provisions of
federal or state law.
Very truly yours,
David J. Rogers
National Bank Examiner
Analysis Division
<PAGE> 20
EXHIBIT 3
THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS:
FEDERAL RESERVE BOARD
Washington, D.C.
October 9, 1919
Pursuant to authority vested in the Federal Reserve Board by the Act of
Congress approved December 23, 1913, known as the Federal Reserve Act, as
amended by the Act of September 26, 1918, the
FIRST NATIONAL BANK OF CINCINNATI
has been granted the right to act, when not in contravention of State or local
law, as TRUSTEE, EXECUTOR, ADMINISTRATOR, REGISTRAR OF STOCKS AND BONDS,
GUARDIAN OF ESTATES, ASSIGNEE, RECEIVER OR IN ANY OTHER FIDUCIARY CAPACITY IN
WHICH STATE BANKS, TRUST COMPANIES OR OTHER CORPORATIONS WHICH COME INTO
COMPETITION WITH NATIONAL BANKS ARE PERMITTED TO ACT UNDER THE LAWS OF THE STATE
OF OHIO. The exercise of such rights shall be subject to regulations prescribed
by the Federal Reserve Board.
Federal Reserve Board,
By W. P. G. Harding
Governor.
ATTEST:
W. T. Chapman
Secretary.
STATE OF OHIO
DEPARTMENT OF BANKS AND BANKING
Certificate of Authority No. 17
NATIONAL BANKS
I, Philip C. Berg, Superintendent of Banks, do hereby certify that the
First National Bank of Cincinnati, Hamilton County, Ohio has complied with all
the requirements provided by law and is authorized to transact the business of a
trust company and to perform all the functions granted to such companies by the
laws of this state.
Given under my hand and official Seal at Columbus,
Ohio, this twenty-fifth day of November, A.D. 1919
Philip C. Berg,
Superintendent of Banks.
(SEAL)
<PAGE> 21
EXHIBIT 4
BY-LAWS
STAR BANK, N.A., CINCINNATI
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING
The annual meeting of shareholders shall be held in the main banking house of
the Association at 11:00 a.m. on the second Tuesday in February of each year.
Notice of such meeting shall be mailed to shareholders not less than ten (10)
nor more than sixty (60) days prior to the meeting date.
SECTION 2. SPECIAL MEETINGS
Special meetings of shareholders may be called and held at such times and upon
such notice as is specified in the Articles of Association.
SECTION 3. QUORUM
A majority of the outstanding capital stock represented in person or by proxy
shall constitute a quorum of any meeting of the shareholders, unless otherwise
provided by law, but less than a quorum may adjourn any meeting, from time to
time, and the meeting amy be held as adjourned without further notice.
SECTION 4. INSPECTORS
The Board of Directors may, and in the event of its failure so to do, the
Chairman of the Board shall appoint Inspectors of Election who shall determine
the presence of a quorum, the validity of proxies, and the results of all
elections and all other matters voted upon by shareholders at all annual and
special meetings of shareholders.
SECTION 5. VOTING
In deciding on questions at meetings of shareholders, except in the election of
directors, each shareholder shall be entitled to one vote for each share of
stock held. A majority of votes cast shall decide each matter submitted to the
shareholders, except where by law a larger vote is required. In all elections of
directors, each shareholder shall have the right to vote the number of shares
owned by him for as many persons as there are directors to be elected, or to
cumulate such shares and give one candidate as many votes as the number of
directors multiplied by the number
<PAGE> 22
of his shares equal, or to distribute them on the same principle among as many
candidates as he shall think fit.
ARTICLE II
SECTION 1. TERM OF OFFICE
The directors of this Association shall hold office for one year and until their
successors are duly elected and qualified.
SECTION 2. REGULAR MEETINGS
The organization meeting of the Board of Directors shall be held as soon as
practical following the annual meeting of shareholders at the main banking
house. Other regular meetings of the Board of Directors shall be held without
notice at 11:00 a.m. on the second Tuesday of each month except February, at the
main banking house, or, provided notice is given by telegram, letter, telephone
or in person to every Director, at such time and place as may be designated in
the notice of the meeting. When any regular meeting of the Board falls on a
holiday, the meeting shall be held on the next banking business day, unless the
Board shall designate some other day.
SECTION 3. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the Chairman of the
Board of the Association, or at the request of three or more Directors. Notice
of the time, place and purposes of such meetings shall be given by telegram,
letter, telephone or in person to every Director.
SECTION 4. QUORUM
A majority of the entire membership of the Board shall constitute a quorum at
any meeting of the Board.
SECTION 5. NECESSARY VOTE
A majority of those Directors present and voting at any meeting of the Board of
Directors shall decide each matter considered, except where otherwise required
by law or the Articles or By-Laws of this Association.
SECTION 6. COMPENSATION
Directors, excluding full-time employees of the Bank, shall receive such
reasonable compensation as may be fixed from time to time by the Board of
Directors.
SECTION 7. ELECTION-AGE LIMITATION
No person shall be elected or reelected a Director after reaching his seventieth
(70th) birthday, provided that any person who is a Director on December 10,
1985, may continue to be reelected a Director until he reaches his seventy-fifth
(75th) birthday.
<PAGE> 23
SECTION 8 RETIREMENT-AGE LIMITATION
Every Director of the Bank shall retire no later than the first month next
following his seventieth (70th) birthday, except for any person who was a
Director on December 10, 1985, who shall retire not later that the first of the
next month following his seventy-fifth (75th) birthday.
SECTION 9 DIRECTORS EMERITUS
The Board shall have the right from time to time to choose as Directors Emeritus
persons who have had prior service as members of the Board and who may receive
such compensation as shall be fixed from time to time by the Board of Directors.
ARTICLE III
OFFICERS
SECTION 1 WHO SHALL CONSTITUTE
The Officers of the Association shall be a Chairman of the Board, a President, a
Secretary, and other officers such as Chairman of the Executive Committee, Vice
Chairman of the Board, Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents, Assistant Secretaries, Trust Officers, Trust Investment Officers,
Trust Real Estate Officers, Assistant Trust Officers, a Controller, Assistant
Controller, an Auditor and Assistant Auditors, as the Board may appoint from
time to time. Any person may hold two offices. The Chairman of the Board, all
Vice Chairmen of the Board and the President shall at all times be members of
the Board of Directors.
SECTION 2 TERM OF OFFICE
All officers shall be elected for and shall hold office for one year and until
their successors are elected and qualified, subject to the right in the Board of
Directors by a majority vote of the entire membership to discharge any officer
at any time.
SECTION 3 CHAIRMAN OF THE BOARD (Amended 12/13/88-see attachment)
The Chairman of the Board shall be the Chief Executive Officer of the
Association and shall have all duties, responsibilities and powers of the Chief
Executive Officer. He shall, when present, preside at all meetings of
shareholders and directors and shall be ex officio a member of all committees of
the Board. He shall name all members of the committees of the Board, subject to
the confirmation thereof by the Board.
In the event that there is a vacancy in the position of President or in the
event of the absence or incapacity of the President, the Chairman may appoint,
or in the event of his failure to do so, the Board of Directors or the Executive
Committee thereof may designate any Vice Chairman of the
<PAGE> 24
Board, any Executive Vice President or any Senior Vice President of the
Association temporarily to exercise the powers and perform the duties of the
Chairman as Chief Executive Officer when the Chairman is absent or
incapacitated.
The Board of Directors shall have the power to elect a Chairman of the Executive
Committee. Any such Chairman of the Executive Committee shall participate in the
formation of the policies of the Association and shall have such other duties as
may be assigned to him from time to time by the President or by the Board of
Directors.
SECTION 4 PRESIDENT (amended 12/13/88-see attachment)
The President shall participate in the formation and supervision of the policies
and operations of the Association and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors or by the Chairman
of the Board. In the event that there is a vacancy in the position of the
Chairman of the Board, the President shall be the Chief Executive Officer of the
Association and shall have all the powers and perform all the duties of the
Chairman of the Board, including the same power to name temporarily a Chief
Executive Officer to serve in the absence of the President.
SECTION 5 CHAIRMAN OF THE EXECUTIVE COMMITTEE
The Board of Directors shall have the power to elect a Chairman of the Executive
Committee. Any such Chairman of the Executive Committee shall participate in the
formation of the policies of the Association and shall have such other duties as
may be assigned to him from time to time by the President or by the Board of
Directors.
SECTION 6 VICE CHAIRMEN OF THE BOARD
The Board of Directors shall have the power to elect one or more Vice Chairmen
of the Board of Directors. Any such Vice Chairmen of the Board shall participate
in the formation of the
<PAGE> 25
policies of the Association and shall have such other duties as may be assigned
to him from time to time by the Chairman of the Board or by the Board of
Directors.
SECTION 7 OTHER OFFICERS
The Secretary and all other officers appointed by the Board of Directors shall
have such duties as defined by law and as may from time to time be assigned to
them by the Chief Executive Officer or the Board of Directors.
SECTION 8 RETIREMENT
Every officer of the Association shall retire not later than the first of the
month next following his sixty-fifth (65th) birthday. The Board of Directors
may, in its discretion, set the retirement date and terms of retirement of an
officer at a date later than provided above.
<PAGE> 26
ARTICLE IV
COMMITTEES
SECTION 1 EXECUTIVE COMMITTEE
There shall be a standing committee of Directors in this Association to be known
as the Executive Committee. This Committee shall meet at 11:00 a.m. on the first
and fourth Tuesday of each month. It shall have all of the powers of the Board
of Directors between meetings of the Board, except as the Board only by law is
authorized to perform or exercise. All actions of the Executive Committee shall
be reported to the Board of Directors. In the event that any member of the
Executive Committee is unable to attend a meeting of that committee, the
Chairman of the Board or the President may, at his discretion, appoint another
Director to attend said meeting of the Executive Committee and for that meeting
to serve as a member of the Executive Committee with full power to act in place
of the absent regular member of the committee.
SECTION 2 COMPENSATION COMMITTEE
There shall be a standing committee of directors of this Association to be known
as the Compensation Committee who shall review the compensation of all Executive
Officers and those officers who participate in the Profit Sharing Pool as well
as fees for directors of the Association. They will recommend specific
compensation arrangements to the Board of Directors for their confirmation.
SECTION 3 COMMITTEE ON AUDIT
There shall be a standing committee of Directors of this Association to be known
as the Committee on Audit, none of whose members shall be active officers of the
Association. This Committee shall make or cause to be made a suitable
examination of the affairs of the Association and the Trust Department at least
once during each period of twelve months. The results of such examination shall
be reported in writing to the Board at the next regular meeting thereafter
stating whether the Association and/or Trust Department is in a sound solvent
condition, whether adequate internal audit controls and procedures are being
maintained and make such recommendations as it deems advisable.
SECTION 4 TRUST COMMITTEE
There shall be a standing committee of Directors of this Association to be known
as the Trust Committee. The Trust Committee shall determine policies of the
Department and review actions of the Trust Investment Committee. All actions of
the Trust Committee shall be reported to the Board of Directors.
SECTION 5 TRUST INVESTMENT COMMITTEE
There shall be a standing committee of this Association to be known as the Trust
Investment Committee composed of officers of the Association. The Trust
Investment Committee or such
<PAGE> 27
officers as may be duly designated by the Trust Investment Committee, shall pass
upon the acceptance of all trusts, the closing out or relinquishment of all
trusts and the making, retention, or disposition of all investments of trust
funds in conformity with policies established by the Trust Committee. Actions of
the Trust Investment Committee shall be reported to the Trust Committee.
SECTION 6 PENSION COMMITTEE
There shall be a standing committee of directors or officers of this Association
to be known as the Pension Committee, who shall have the powers and duties as
set forth in the Association's Employees' Pension Plan. A report of the
condition of the pension fund shall be submitted annually to the Board of
Directors.
SECTION 7 OTHER COMMITTEES
The Chairman may appoint, from time to time, other committees for such purposes
and with such powers as he or the Board may direct.
ARTICLE V
SEAL
SECTION 1 IMPRESSION
The following is an impression of the seal of this Association.
August 25, 1988
<PAGE> 28
RESOLVED, That Section 3 of Article III of the By-Laws of the Bank shall be
amended to read:
SECTION 3 CHAIRMAN OF THE BOARD
The Chairman of the Board shall have general executive powers and duties and
shall perform such other duties as amy be assigned from time to time by the
Board of Directors. In addition, unless the Board of Directors shall have
designated the President to be the Chief Executive Officer, the Chairman of the
Board shall be the Chief Executive Officer and shall have all the powers and
duties of the Chief Executive Officer. He shall, when present, preside at all
meetings of shareholders and directors and shall be ex officio a member of all
committees of the Board. He shall name all members of the committees of the
Board, subject to the confirmation thereof by the Board.
If he is Chief Executive Officer, in the event that there is a vacancy in the
position of President or in the event of the absence or incapacity of the
President, the Chairman may appoint, or in the event of his failure to do so,
the Board of Directors or the Executive Committee thereof may designate, any
Vice Chairman of the Board, any Executive Vice President or any Senior Vice
President of the Association temporarily to exercise the powers and perform the
duties of the Chairman as Chief Executive Officer when the Chairman is absent or
incapacitated.
If the President has been designated Chief Executive Officer by the Board of
Directors, in the event that there is a vacancy in the position of the President
or in the event of the absence or incapacity of the President, the Chairman
shall be the Chief Executive Officer of the Association and shall have all the
powers and perform all the duties of the President, including the powers to name
temporarily a Chief Executive Officer to serve in the absence of the Chairman.
FURTHER RESOLVED, That Section 4 of Article III of the By-Laws of the bank shall
be amended to read:
SECTION 4 PRESIDENT
The President shall have general executive powers and duties and shall perform
such other duties as may be assigned from time to time by the Board of
Directors. In addition, if designated by the Board of Directors, the President
shall be the Chief Executive Officer and shall have all the powers and duties of
the Chief Executive Officer, including the same power to name temporarily a
Chief Executive Officer to serve in the absence of the President if there is a
vacancy in the position of the Chairman or in the event of the absence or
incapacity of the Chairman.
If the Chairman has been designated Chief Executive Officer by the Board of
Directors, in the event that there is a vacancy in the position of the Chairman
of the Board or in the event of the absence or incapacity of the Chairman of the
Board, the President shall be the Chief Executive Officer of the Association and
shall have all the powers and perform all the duties of the Chairman of the
Board, including the same power to name temporarily a Chief Executive Officer to
serve in the absence of the President.
<PAGE> 29
EXHIBIT 5
THE CONSENT OF THE TRUSTEE
REQUIRED BY 321 (b) OF THE ACT
Star Bank, National Association, the Trustee executing the statement of
eligibility and qualification to which this Exhibit is attached does hereby
consent that reports of examinations of the undersigned by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor in accordance with the
provisions of 321 (b) of the Trust Indenture Act of 1939.
STAR BANK, NATIONAL ASSOCIATION
June 28, 1996 BY: /s/ Keith A. Maurmeier
- ------------------------- ----------------------------------
Date Keith A. Maurmeier
Senior Trust Officer
<PAGE> 30
CONSOLIDATED REPORT OF CONDITION FOR INSURANCE COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR SEPTEMBER 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
ASSETS
<C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1) 451,065
b. Interest-bearing balances (2) 0
2. Securities:
a. Held-to-maturity securities (from Schedule RE-B, Column A) 1,447,188
b. Available-for-sale securities (from Schedule RC-B, Column D) 198,643
3. Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreements subsidiaries, and
in YBFs:
a. Federal funds sold 5,924
b. Securities purchased under agreements to resell 0
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C)
b. LESS: Allowance for loan and lease losses
c. LESS: Allocated transfer risk reserve
d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a
minus 4.b and 4.c) 5,919,755
5. Trading assets (from Schedule RC-D) 0
6. Premises and fixed assets (including capitalized leases) 100,250
7. Other real estate owned (from Schedule RC-M) 2,745
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 0
9. Customers' liability to this bank on acceptances outstanding 25,372
10. Intangible assets (from Schedule RC-M) 215,460
11. Other assets (from Schedule RC-F) 173,361
12. Total assets (sum of items 1 through 11) 8,539,763
</TABLE>
<PAGE> 31
SCHEDULE RC--CONTINUES
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-B,
part I) 6,604,080
(1) Noninterest-bearing (1) 1,197,784
(2) Interest-bearing 5,406,296
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule
RC-E, Part II) 41,512
(1) Noninterest-bearing 0
(2) Interest-bearing 41,512
14. Federal funds purchased and securities
sold under agreements ro repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased 838,507
b. Securities sold under agreements ro repurchase 5,549
15. a. Demand notes issued to the U.S. Treasury 117,994
b. Trading liabilities (from Schedule RC-D) 0
16. Other borrowd money:
a. With original maturity of one year or less 2,422
b. With original maturity of more than one year 0
17. Mortgage indebtedness and obligations
under capitalizated leases 11,711
18. Bank's liability on acceptances executed
and outstanding 25,372
19. Subordinated notes and debentures 148,361
20. Other liabilities (from Schedule RC-G) 95,782
21. Total liabilities (sum of items 13 through 20) 7,891,290
22. Limited-life preferred stock and related surplus
23. Perpetual preferred stock and related surplus 0
24. Common Stock 18,200
25. Surplus [exclude all surplus related to preferred stock] 197,890
26. a. Undivided profits and capital reserves 437,179
----------
b. Net unrealized holding gains (losses) on
available-for-sale securities (4,796)
----------
27. Cumulative foreign currency translation adjustments 0
----------
28. Total equity capital (sum of items 23 through 27) 648,473
----------
29. Total liabilities, limited-life preferred stock, and equity capital
(sum of items 21, 22, and 28)
//////////
8,539,763
----------
</TABLE>
