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As filed with the Securities and Exchange Commission on March 10, 1999
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 its charter)
OHIO 34-0907152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4800 EAST 131ST STREET, CLEVELAND, OHIO 44105, TEL. (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
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
4800 EAST 131ST STREET
CLEVELAND, OHIO 44105
(216) 587-3600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
William A. Papenbrock
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
(216) 622-8200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of the Registration Statement and
after compliance with applicable state and federal laws.
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If the only securities being registered on this form are being 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]
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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. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER MAXIMUM AGGREGATE REGISTRATION FEE
SHARE (1) OFFERING PRICE (1) (1)
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Common Shares, Without Par Value (2) 1,000,000 $7.47 $7,470,000 $2,077
=================================================================================================================================
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(1) Based upon the average of the high and low sales prices of the common
shares as reported on the Nasdaq National Market on March 5, 1999;
estimated solely for purposes of determining the amount of the registration
fee pursuant to Rule 457(c).
(2) Includes Rights to purchase common shares under the Company's Shareholders
Rights Plan.
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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PROSPECTUS
ISSUED ______________, 1999 (SUBJECT TO COMPLETION)
1,000,000 COMMON SHARES
PIONEER-STANDARD ELECTRONICS, INC.
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This Prospectus relates solely to the offer and sale of up to 1,000,000
of our common shares by Wachovia Bank of North Carolina, N.A., the Trustee of
The Pioneer Stock Benefit Trust.
The Trustee will receive all of the proceeds from the sale of the
shares and will remit those proceeds to us in payment for the subscription price
for the shares sold.
AN INVESTMENT IN THE COMMON SHARES INVOLVES SUBSTANTIAL RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
Our common shares are traded on the Nasdaq National Market under the
symbol "PIOS." The Trustee may sell their shares at the market price prevailing
at the time of sale or at negotiated prices. On Friday, March 5, 1999, the
closing price for our common shares was $7.375 per share.
Our principal executive offices are located at 4800 East 131st Street,
Cleveland, Ohio 44114. Our telephone number at that address is (216) 587-3600.
These securities have not been approved by the SEC or any state securities
commission, nor have these organizations determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
This prospectus is dated ________________, 1999.
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TABLE OF CONTENTS
Risk Factors..................................................................3
Where You Can Find More Information...........................................6
Note Regarding Forward-Looking Information....................................8
Pioneer-Standard Electronics, Inc.............................................8
Share Subscription Agreement and Trust........................................8
Use of Proceeds...............................................................9
Selling Shareholder...........................................................9
Plan of Distribution.........................................................10
Benefit Plans................................................................11
Legal Opinion................................................................11
Experts......................................................................11
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. Neither we nor the
selling shareholder have authorized anyone else to provide you with different
information. The selling shareholder is not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
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RISK FACTORS
An investment in our common shares involves a high degree of risk. You
should carefully review the information set forth below, as well as other
information appearing elsewhere in this prospectus, before making an investment
in our common shares. The following are the most significant risk factors that
we believe are material to investors who purchase or own our common shares.
We operate in an intensely competitive industry
We are a distributor in the electronic components and computer products
industry, which has been highly competitive in recent years. We face intense
competition in two major respects: in obtaining sources of supply for the
products we distribute, and in developing relationships with customers to whom
we sell those products. In the case of our sales of semiconductor and computer
products, we compete for customers not only with other distributors, but also
with some of our own suppliers. Some of our competitors are larger and more
established and have greater financial and other resources, which may enable
them to compete more effectively. Also, we anticipate that an increasing number
of suppliers may decide to distribute their products directly to the customer,
which will heighten competitive pressures further. Due to continuing competitive
pressures, our gross margins have declined in recent years, and we expect a
continued downward pressure on gross margins in the foreseeable future.
Softening in the computer network and platform market could hurt our revenues
We sell many products that are used in the manufacture or configuration
of mid-range computer systems and high-end platforms. The technology used in
these products has changed rapidly over the last several years, resulting in
short life cycles for these products. Because our customers have been forced to
replace systems that have become technologically obsolete in a relatively short
period of time, we have experienced substantial demand for these products that
has contributed significantly to our revenue growth. A slowdown in this market
could have a substantial negative effect on our revenues and results of
operations.
Supply and demand fluctuations in the semiconductor market may depress our gross
margins
Semiconductors have represented 36 percent, 41 percent and 38 percent
of the Company's sales in fiscal years 1998, 1997 and 1996, respectively. The
semiconductor market historically has experienced fluctuations in product supply
and demand associated with technology changes occurring from time to time. At
times when product supply has been high relative to demand, prices for those
products have declined. We have attempted to minimize the effect of these price
fluctuations in our distribution arrangements. Our gross margins may
nevertheless be negatively affected if an excess supply of semiconductors causes
a general decline in prices for those products. If there is a shortage of
semiconductor supply, our results of operations will depend on how much product
we are able to obtain from suppliers to sell and how quickly we receive
shipments of those products. You cannot be sure that we will be able to avoid
the potential adverse effects that supply and demand fluctuations in the
semiconductor market could have on our results of operations and business.
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Our success depends on our ability to predict and react to changing technology
and industry standards
Our ability to manage the challenges of rapidly changing technology
and evolving industry standards characteristic of the market for electronic
components and computer products will affect our results of operations. These
challenges include:
o Predicting the nature and timing of technological changes and the
direction of evolving industry standards;
o Identifying, obtaining and successfully marketing new products as
they emerge; and
o Minimizing the risk of loss due to inventory obsolescence.
Some of our competitors may be able to market products that have perceived
advantages over the products we distribute or that make the products we
distribute obsolete or harder to market. Although we attempt to minimize the
effects of inventory obsolescence in our distribution arrangements, we may have
high inventories of unsold product if a new technology renders a product that we
distribute less desirable or obsolete. In addition, our customers may be less
willing, for financial or other reasons, to purchase the new products necessary
to use new technologies.
We depend heavily on several key suppliers
During fiscal 1998, the products we purchased from our five largest
suppliers accounted for 68 percent of total sales, with Digital Equipment and
Intel representing 29 percent and 18 percent of sales, respectively. Adjusting
for the acquisition of Dickens Data Systems, Inc., which occurred in March 1998,
on a pro forma basis, sales of IBM products would have represented 21.5 percent
of our sales for the fiscal year ended March 31, 1998 and 98.6 percent of the
sales of Dickens Data for the fiscal year ended December 31, 1997. Although we
believe that we have good relationships with our suppliers, we cannot be certain
that these suppliers will be willing to do business with us in the future on
terms acceptable to us. The loss of any of our five top suppliers or a
combination of other suppliers could adversely affect our business, results of
operations and financial condition.
Continuing industry concentration may put us at a competitive disadvantage
The electronic components and computer products distribution industry
has become increasingly concentrated in recent years as companies have combined
or formed strategic alliances. If this trend continues, new business
combinations or strategic alliances may have a competitive advantage if their
potentially greater financial, technical, marketing or other resources allow
them to negotiate more favorable relationships with suppliers than we can. As a
result, they may be able to offer lower prices that could precipitate an
industry-wide decline in prices. This decline would have a negative impact on
our gross margins, and could potentially lead to a decline in our revenues and
loss of market share.
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Our growth through acquisitions depends on our ability to find suitable
acquisition opportunities, finance those acquisitions, and manage the acquired
businesses, and may have some adverse financial effects
We constantly review acquisition prospects that would complement our
existing business, augment our market coverage or provide opportunities to
expand into new markets. Our continued growth depends in part on our ability to
find suitable acquisition candidates and to consummate strategic acquisitions.
If the consolidation trend in the industry continues, the cost of completing
acquisitions could increase significantly. To fund rising acquisition costs, we
may issue equity securities, which would dilute the holdings of existing equity
holders, or incur debt. These actions, and the amortization of expenses related
to goodwill and other intangible assets, could have a material adverse effect on
our financial condition and results of operations or the price of our common
shares. Furthermore, acquiring businesses always entails risk and uncertainties.
We may not be able to integrate the operations of the acquired businesses
successfully, and the failure to do so could materially adversely impact our
business and results of operations.
Our financial obligations may limit our ability to operate our business
At December 31, 1998, our borrowings under a $260 million revolving
credit facility with National City Bank, Cleveland, Ohio, as agent for itself
and a syndicate of other lenders, were $100 million. In addition, we issued $150
million principal amount of 8 1/2 percent Senior Notes due 2006 in August 1996.
In March and April 1998, our wholly owned subsidiary, the Pioneer-Standard
Financial Trust, issued a total of $143.7 million of 6 3/4 percent Mandatorily
Redeemable Convertible Preferred Securities, which is an equity-related
security. The sole assets of the Pioneer-Standard Financial Trust are $148.2
million aggregate principal amount of 6 3/4 percent Series A Junior Convertible
Subordinated Debentures due March 31, 2028. We have executed a guarantee
providing a full and unconditional guarantee of the trust's obligations under
the trust preferred securities. As a consequence of our obligations:
o a substantial portion of our cash flow from operations must be
dedicated to servicing these obligations and will not be
available for other purposes;
o our ability to obtain additional financing in the future for
working capital, capital expenditures and acquisitions may be
limited; and
o our flexibility to react to changes in the industry and changing
business and economic conditions may be limited.
Our ability to satisfy our existing obligations will depend upon our future
operating performance, which may be affected by prevailing economic conditions
and financial, business and other factors described in this prospectus, many of
which are beyond our control. We currently anticipate that funds from current
operations, available credit facilities and access to capital markets will
provide adequate funds to finance capital spending and working capital needs and
to service our obligations as they become due. If we are unable to service our
obligations, we will be forced to adopt one or more other strategies that may
include actions such as reducing or delaying capital expenditures, selling
assets, restructuring or refinancing our indebtedness or seeking additional
equity capital. You cannot be sure that any of these strategies could be
effected on satisfactory terms, if at all.
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Our Stock Price Could be Adversely Affected by Sales of Shares Eligible for
Future Sale
As of December 31, 1998, the selling shareholder, The Pioneer Stock
Benefit Trust, held 4,780,000 common shares. We anticipate that the Trustee of
the Trust will sell at least 155,000 of those shares by March 31, 1999. If the
Trust were to sell substantial amounts of the common shares held by it, or if
the market perceived that sales by the Trust were likely to occur, our stock
price could decline.
Our business may suffer if we do not properly compete our Year 2000
modifications, or the other entities with whom we conduct business do not
complete their modifications
The Year 2000 problem -- software, hardware or an embedded chip that
does not correctly process date information for years after 1999 -- results from
the practice of storing date information with only the last two digits of the
year. We have assessed our internal information technology systems and equipment
with respect to Year 2000 compliance, and expect any necessary remediation to be
completed by July 1999. We have developed a project plan for addressing the Year
2000 compliance of our other systems and equipment, and anticipate that they
will be made Year 2000 compliant by October 1999. We expect the total costs of
our Year 2000 initiative, which are being funded from operating cash flows, to
be approximately $3.8 million, of which $1.6 million had been spent at December
31, 1998. However, it is possible that the actual costs of the initiative could
vary from our current estimates. Our business could be adversely affected if we
fail to adequately address our internal Year 2000 problems, or if other
businesses with whom we conduct business are not Year 2000 compliant. Also, many
of the products we sell use information technology or have embedded chips, and
it is possible that some of these products may malfunction due to the Year 2000
problem. Depending on the nature and volume of any product failures caused by
Year 2000 non-compliance, we may be subjected to substantial amount of
litigation. Although we believe our liability exposure is mitigated by the
pass-through of manufacturers' warranties to the customer, we may, in any case,
incur significant litigation costs to defend against these suits. Our Year 2000
litigation-related expenses could have a material adverse effect on our results
of operations.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
You may read and copy this information at the following locations of the
Commission:
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Public Reference Room Chicago Regional Office New York Regional Office
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W. 500 West Madison Street Suite 1300
Washington, D.C. 20549 Suite 1400 13th Floor
Chicago, Illinois 60661 New York, New York 10007
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You may also obtain copies of this information by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Further information on the operation of SEC's Public
Reference Room in Washington, D.C. can be obtained by calling the SEC at
1-800-SEC-0330.
The SEC also maintains an Internet World Wide Web site that contains
reports, proxy statements and other information regarding registrants that file
electronically with the SEC. The address of that site is http://www.sec.gov.
Our common shares are traded on the Nasdaq National Market. You may
read reports, proxy statements and other information concerning Pioneer at the
office of the Nasdaq National Market at 1735 K Street, N.W., Washington, D.C.
20006.
This prospectus is a part of a registration statement which we have
filed with the SEC under the Securities Act. The registration statement and the
schedule and exhibits filed with the registration statement contain additional
information about Pioneer and the offering of the common shares not contained in
the prospectus. This prospectus does not contain complete information with
respect to all documents described. All documents referred to in the prospectus
have been filed with the SEC as exhibits to our reports or other registration
statements.
The SEC allows us to "incorporate by reference" the information that it
files with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until the Trustee sells all of the securities.
o Annual Report on Form 10-K for the fiscal year ended March
31,1998, as amended by the Amendment to Annual Report on Form
10-K/A filed June 19, 1999;
o Quarterly Reports on Form 10-Q for the quarters ended June 30,
1998, September 30, 1998 and December 31, 1998;
o Current Report on Form 8-K filed with the Commission on June 19,
1998;
o Description of our common shares contained in our Registration
Statement on Form 8-A; and
o Description of our Common Share Purchase Rights contained in our
Registration Statement on Form 8-A effective May 19, 1989.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Vice President, Treasurer and Assistant Secretary
Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
(216) 587-3600
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NOTE REGARDING FORWARD-LOOKING INFORMATION
Portions of this prospectus contain current management expectations
which may constitute forward-looking information. Our performance may differ
materially from that contemplated by such statements for a variety of reasons,
including the following:
o Competition
o Dependence on the computer market
o Cyclical nature of the semiconductor market
o Inventory obsolescence and technology changes
o Dependence on key suppliers
o Effects of industry consolidation
o Risks and uncertainties involving acquisitions
o Instability in world financial markets
o Downward pressure on gross margin
o Management of growth of the business
PIONEER-STANDARD ELECTRONICS, INC.
We were formed in 1963 under the laws of the State of Ohio. We are a
leading distributor of a broad range of industrial and end-user electronic
components and computer systems products supplied by more than 100 manufacturers
to original equipment manufacturers, value-added resellers, research
laboratories, government agencies and other organizations, primarily in the
United States and Canada.
SHARE SUBSCRIPTION AGREEMENT AND TRUST
On July 2, 1996, we entered into the trust agreement with the Trustee,
under which the Trustee subscribed for 5,000,000 common shares. We anticipate
that those common shares, including 1,000,000 common shares offered by this
prospectus, will be sold from time to time by the Trustee. The Trustee will use
the proceeds from the sale of the common shares to pay us the subscription price
for the subscribed-for common shares. See "Use of Proceeds." We will then use
the Trust's payment to us to satisfy our obligations under our employee plans
and for other employee compensation purposes.
The terms of the trust agreement require the Trustee to pay for the
subscribed-for common shares over the 15 year term of the Trust. To date, the
Trustee has sold 220,000 common shares of
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the 5,000,000 subscribed-for shares. Under Ohio law, the common shares
subscribed for under the trust agreement are deemed to be issued and
outstanding for voting and dividend purposes, but will not be deemed fully
paid and non-assessable until we receive payment for them as provided in
the trust agreement.
The Trust will terminate on March 31, 2011 or any earlier date on which
the subscription is paid in full and all common 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 or when
there are no common shares subject to an outstanding subscription agreement. In
that case, any common shares held by the Trustee will be allocated to our
employee benefit plans. The Trust will also terminate automatically upon our
giving the Trustee notice of a change of control (as defined below). In that
event, the Trustee will use the proceeds from the sale of the subscribed-for
common shares to pay the subscription price for those shares, and any excess
funds will be allocated to our benefit plans.
Under the agreement, "change of control" means:
o a complete dissolution or liquidation of Pioneer;
o a sale or other disposition of all or substantially all of our
assets; or
o a reorganization, merger, or consolidation ("business
combination"), unless either one of the following is true:
- all or substantially all of Pioneer's shareholders
immediately prior to the business combination own more than
50 percent of the voting securities of the entity surviving
the business combination or the entity which directly or
indirectly controls the surviving entity, in substantially
the same proportion as they owned Pioneer's voting
securities immediately prior to the business combination, or
- the consideration (other than cash paid in lieu of
fractional shares or payment upon perfection of appraisal
rights) issued to Pioneer's shareholders in the business
combination is solely common shares which are publicly
traded on an established securities exchange in the United
States.
USE OF PROCEEDS
The Trustee intends to use the proceeds from the sale of the common
shares offered by this prospectus to pay the subscription price for those
shares. We, in turn, will use the Trustee's payment for the common shares to
satisfy our obligations to contribute cash to our employee benefit plans or for
other employee compensation purposes. See "Share Subscription Agreement and
Trust."
THE SELLING SHAREHOLDER
The Trust currently holds 4,780,000 shares. The Trustee may sell up to
1,000,000 common shares in the offering. Assuming that the Trustee does not sell
or allocate any other
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common shares prior to the conclusion of the offering, the Trust will hold
3,780,000 common shares upon completion of the offering, which represents
approximately 12.1 percent of the common shares outstanding as of December 31,
1998.
The Trustee has subscribed for and will sell the common shares offered
by this prospectus under the terms of an agreement between the Trust and us. See
"Share Subscription Agreement and Trust."
PLAN OF DISTRIBUTION
The number of common shares that the Trustee will sell and the
frequency of those sales will depend upon various factors, including the market
price of the common shares and any determinations we make regarding our cash
needs to satisfy our obligations under our employee benefit plans or employee
compensation arrangements. The trust agreement requires that a minimum number of
common shares be allocated from the Trust on a periodic basis. We may suspend
the sale of common shares by the Trustee under circumstances specified in the
trust agreement. .
We will pay the expenses of the registration, offering and sale of the
common shares to the public, including commissions and discounts of agents,
dealers or underwriters. To the extent allowed by law, we have agreed to
indemnify the Trustee against any claims, liabilities, losses or expenses,
including reasonable attorneys' fees, that result from any action or failure to
act in its operation and administration of the Trust. However, we are not
obligated to indemnify the Trustee if it has acted in willful or negligent
violation of applicable law or its duties under the Trust or in bad faith.
The Trustee may sell the common shares in one or more of the following
transactions:
o to underwriters who will acquire the shares for their own account
and resell them in one or more transactions, including negotiated
transactions, at a fixed price or at varying prices determined at
the time of sale;
o through brokers or dealers, acting as principal or agent, in
transactions (which may involve block transactions) on the Nasdaq
National Market, in special offerings, exchange distributions
pursuant to the rules of the applicable exchanges, or otherwise,
at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or
at fixed prices;
o directly or through brokers or agents in private sales at
negotiated prices; or
o by pledgees, donees, transferees or other successors in interest.
Underwriters participating in any offering may receive underwriting discounts
and commissions, and discounts or concessions may be allowed or reallowed or
paid to dealers, and brokers or agents participating in such transactions may
receive brokerage or agent's commissions or fees.
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BENEFIT PLANS
We will use the proceeds that we receive from the Trustee upon its sale
of common shares to satisfy our obligations to contribute cash to any of the
following employee benefit plans or employee compensation arrangements:
o Group Insurance Plan (Life)
o Medical Plan
o Dental Care Plan
o Long Term Disability Plan
o Vision Plan
o Pioneer-Standard Electronics, Inc. Employees' Profit Sharing
Retirement Plan
o Pioneer Technologies Group, Inc. Profit Sharing Plan
o Employee Bonuses and Commissions
o Employee Compensation
We may occasionally add, substitute or delete benefit plans or
compensation arrangements to which we may distribute cash. If required, we will
reflect any changes to the benefit plans and arrangements listed above in an
accompanying prospectus supplement, supplemental term sheet or offering
document.
LEGAL OPINION
Our legal counsel, Calfee, Halter & Griswold LLP, Cleveland, Ohio, will
issue an opinion about the legality of the offered securities for us. William A.
Papenbrock, Esq., a partner of Calfee, Halter & Griswold LLP, serves as our
Secretary and as of December 31, 1998, beneficially owned 4,687 common shares.
EXPERTS
The consolidated financial statements and schedule of Pioneer-Standard
Electronics, Inc. incorporated by reference in Pioneer-Standard Electronics,
Inc.'s Annual Report (Form 10-K), as amended, for the year ended March 31, 1998,
have been audited and included by Ernst & Young LLP, independent auditors, as
set forth in their reports incorporated by reference therein and incorporated
herein by reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such reports given on the
authority of such firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission filing fee....................$2,077
Legal fees and expenses........................................*$10,000
Accounting fees and expenses...................................*$15,000
Miscellaneous expenses..........................................*$2,923
Total.................................................*$30,000
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* Estimate
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 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
II-1
<PAGE> 15
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 the 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 the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 and incorporated
herein by reference; or
(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.
(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
II-2
<PAGE> 16
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 of 1933 and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 17
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 March 10, 1999.
PIONEER-STANDARD ELECTRONICS, INC.
By /s/ JAMES L. BAYMAN
-------------------------------
James L. Bayman
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below, by the following persons in the
capacities and on the dates indicated.
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, William A. Papenbrock and Edward W. Moore, 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 name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-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 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>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JAMES L. BAYMAN Chairman of the Board and Chief March 10, 1999
------------------------------------ Executive Officer (Principal
James L. Bayman Executive Officer)
/s/ ARTHUR RHEIN President, Chief Operating March 10, 1999
------------------------------------ Officer and Director
Arthur Rhein
/s/ JOHN V. GOODGER Vice President, Treasurer and March 10, 1999
------------------------------------ Assistant Secretary (Principal
John V. Goodger Financial and Accounting Officer)
/s/ CHARLES F. CHRIST Director March 10, 1999
------------------------------------
Charles F. Christ
</TABLE>
II-4
<PAGE> 18
<TABLE>
<S> <C> <C>
/s/ VICTOR GELB Director March 10, 1999
------------------------------------
Victor Gelb
/s/ GORDON E. HEFFERN Director March 10, 1999
------------------------------------
Gordon E. Heffern
/s/ KEITH M. KOLERUS Director March 10, 1999
------------------------------------
Keith M. Kolerus
/s/ EDWIN Z. SINGER Director March 10, 1999
------------------------------------
Edwin Z. Singer
/s/ THOMAS C. SULLIVAN Director March 10, 1999
------------------------------------
Thomas C. Sullivan
/s/ KARL E. WARE Director March 10, 1999
------------------------------------
Karl E. Ware
</TABLE>
II-5
<PAGE> 19
PIONEER-STANDARD ELECTRONICS, INC.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Credit Agreement dated as of March 27, 1998 by and among
Pioneer-Standard Electronics, Inc., the Banks identified on
the signature pages thereto and National City Bank, as
Agent, which is incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended March 31, 1998
4.1.1 First Amendment to Credit Agreement, dated as of May 1,
1998, by and among Pioneer-Standard Electronics, Inc., the
Banks identified on the signature pages thereto and National
City Bank, as Agent, which is incorporated by reference from
the Company's Annual Report on Form 10-K for the year ended
March 31, 1998
4.2 Rights Agreement dated as of April 25, 1989 by and between
the Company and AmeriTrust Company National Association,
which is incorporated by reference from the Company's Annual
Report on Form 10-K for the year ended March 31, 1998
4.3 Amendment No. 1 to Rights Agreement, dated as of May 16,
1997, by and between Pioneer-Standard Electronics, Inc. and
National City Bank, which is incorporated by reference from
the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997
4.4 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 by reference
from the Company's Annual Report on Form 10-K for the year
ended March 31, 1998
4.5 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
4.6 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
4.7 Amendment No. 3 to Note Purchase Agreement dated as of
August 12, 1996 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
4.8 Amendment No. 6 to Note Purchase Agreement, dated as of
March 31, 1998 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, 1998
4.9 Amendment No. 4 to Note Purchase Agreement, dated as of
March 23, 1998 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, 1998
4.10 Amendment No. 5 to Note Purchase Agreement, dated as of
March 23, 1998 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, 1998
4.11 Form of Indenture with respect to the 8 1/2% Senior Notes
due 2006, which is incorporated by reference from the
Company's Registration Statement on Form S-3 (Reg. No.
333-07665)
4.12 Form of 8 1/2% Senior Note due 2006, which is incorporated
by reference from the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996
E-1
<PAGE> 20
EXHIBIT NO. DESCRIPTION
----------- -----------
4.13 Officer's Certificate containing terms relating to the 8
1/2% Senior Notes due 2006, which is incorporated by
reference from the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996
4.14 Certificate of Trust of Pioneer-Standard Financial Trust,
dated February 27, 1998
4.15 Amended and Restated Trust Agreement among Pioneer-Standard
Electronics, Inc., as Depositor, Wilmington Trust Company,
as Property Trustee and Delaware Trustee, and the
Administrative Trustees named therein, dated as of March 23,
1998, which is incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended March 31, 1998
4.16 Junior Subordinated Indenture, dated March 23, 1998, between
the Company and Wilmington Trust, as trustee, which is
incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended March 31, 1998
4.17 First Supplemental Indenture, dated March 23, 1998, between
the Company and Wilmington Trust, as trustee, which is
incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended March 31, 1998
4.18 Form of 6 3/4% Convertible Preferred Securities (included in
Exhibit 4.15), which is incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended
March 31, 1998
4.19 Form of Series A 6 3/4% Junior Convertible Subordinated
Debentures (included in Exhibit 4.17), which is incorporated
by reference from the Company's Annual Report on Form 10-K
for the year ended March 31, 1998
4.20 Guarantee Agreement, dated March 23, 1998, between the
Company and Wilmington Trust, as guarantee trustee, which is
incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended March 31, 1998
5.1 Opinion of Calfee, Halter & Griswold LLP
10.1 Share Subscription Agreement and Trust, dated as of July 2,
1996, between the Company and Wachovia Bank of North
Carolina, N.A., as trustee, which is incorporated by
reference from the Company's Registration Statement on Form
S-3 (Reg. No. 333-07665)
23.1 Consent of Ernst & Young LLP
23.2 Consent of Calfee, Halter & Griswold LLP (see Exhibit 5.1)
24.1 Power of Attorney (see signature page hereto)
E-2
<PAGE> 1
Exhibit 4.5
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT (the "Amendment") is
entered into as of November 1, 1991 by PIONEER-STANDARD ELECTRONICS, INC. (the
"Company") and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA (the
"Noteholder").
PRELIMINARY STATEMENT. (1) The Company and the Noteholder have
entered into a Note Purchase Agreement, dated as of October 31, 1990 (the
"Purchase Agreement"), pursuant to which, at a closing held on November 2, 1990,
the Noteholder purchased $20,000,000 in aggregate principal amount of the
Company's 2.73% Senior Notes due November 1, 2000 (the "Notes"). The Noteholder
was the sole purchaser and remains the sole record and beneficial owner of the
Notes. Capitalized terms used herein and not otherwise defined herein are sued
with the meanings assigned thereto in the Purchase Agreement.
(2) There are presently issued and outstanding approximately
$15,222,000 in aggregate principal amount of 9% Subordinated Convertible
Debentures due 1998 of the Company (the "Debentures"). The Debentures were
issued pursuant to an Indenture dated as of August 1, 1983 between the Company
and BancOhio National Bank, as trustee (the "Indenture"). Under the Indenture,
the Company has and intends to exercise the right to optionally call the
Debentures for redemption. In the absence of a significant decline in the market
price of the Company's Common Shares, it may reasonably be expected that a
substantial portion of the Debentures will be converted by the holders thereof
into Common Shares prior to the redemption date established for the Debentures
pursuant to the provisions of the Indenture (the "Debenture Redemption Date").
However, it is possible that, due to changing market conditions or other
factors, the Company could be obligated to redeem any or all of the Debentures
on the Debenture Redemption Date.
(3) Under Section 9.19(a) of the Purchase Agreement, a limit is
placed on the sum of all Restricted Payments and Restricted Investments made by
the Company after March 31, 1990. Because the definition of "Restricted Payment"
(in Section 12.1 of the Purchase Agreement) expressly includes the redemption of
"any Indebtedness of the Company which is subordinated or junior in right of
payment to the Notes (including the Debentures)", any cash payments made to
redeem Debentures will constitute Restricted Payments subject to the restriction
contained in Section 9.19(a) of the Purchase Agreement (the exceptions contained
in the definition not being applicable to the proposed optional redemption).
Moreover, although it is provided in the Purchase Agreement that the principal
amount of Debentures converted (rather than redeemed) will not count as
Restricted Payments, Section 9.19(a)(ii) of the Purchase Agreement provides that
the amount available to the Company for the making of Restricted Payments will
not be increased by the principal amount of outstanding Debentures attributable
to the conversion of such Debentures to Common Shares.
(4) Because the principal amount of Debentures which will be redeemed
will not be known and cannot be known prior to the call of Debentures for
redemption, it is possible that the principal amount of Debentures which the
Company is obligated to redeem on the Debenture Redemption Date (the "Actual
Redemption Amount") will exceed the amount which
<PAGE> 2
the Company can redeem in compliance with Section 9.19(a) of the Purchase
Agreement (the "Permitted Redemption Amount"). If the Debenture Redemption Date
had been June 30, 1991, the Permitted Redemption Amount would have been
approximately $9,107,000 in aggregate principal amount of Debentures.
(5) The Company and the Noteholder now desire to amend the Purchase
Agreement to provide that (i) notwithstanding the provisions of Section 9.19(a)
of the Purchase Agreement, the Company will be permitted to redeem Debentures in
an aggregate principal amount up to $6,100,000 (the "Permitted Overage") in
excess of the Permitted Redemption Amount on the Debenture Redemption Date, (ii)
for all future determinations with respect to Restricted Payments and/or
Restricted Investments proposed to be made at any time after the Debenture
Redemption Date, (a) the Actual Redemption Amount will be deemed to have been
and be treated as a Restricted Payment made on the Debenture Redemption Date if
the Permitted Redemption Amount exceeds or is equal to the Actual Redemption
Amount, (b) the Permitted Redemption Amount will be deemed to have been and be
treated as a Restricted Payment made on the Debenture Redemption Date if the
Actual Redemption Amount exceeds the Permitted Redemption Amount by an amount
not in excess of the Permitted Overage and (c) an amount equal to the difference
between the Actual Redemption Amount and the Permitted Overage will be deemed to
have been and be treated as a Restricted Payment made on the Debenture
Redemption Date if the Actual Redemption Amount exceeds the Permitted Redemption
Amount by an amount in excess of the Permitted Overage and (iii) if the Actual
Redemption Amount exceeds the Permitted Redemption Amount, the interest rate on
the Notes will be increased by 25 basis points (.25%) per annum, effective on
the Debenture Redemption Date.
(6) On the terms and subject to the conditions set forth in this
Amendment, the Company and the Noteholder desire to amend the Purchase
Agreement, pursuant to Section 13.4 thereof, to reflect the understanding set
forth in the preceding paragraph (5).
NOW, THEREFORE, the Company and the Noteholder agree as follows:
SECTION 1. AMENDMENTS TO THE PURCHASE AGREEMENT.
The Purchase Agreement is hereby amended in the following respects:
SECTION 1.1. AMENDMENT TO SECTION 9.19 OF THE PURCHASE AGREEMENT. The
following subsection (c) shall be added to Section 9.19 of the Purchase
Agreement immediately following subsection (b) thereof:
(c) Notwithstanding the provisions of Section 9.19(a)
hereof, on a day scheduled for the redemption of all or a portion of
the outstanding Debentures (the "Debenture Redemption Date") pursuant
to a valid call for redemption under the provisions of the Indenture,
the Company shall be permitted to redeem Debentures in a principal
amount which exceeds the aggregate principal amount of Debentures the
redemption of which would otherwise be permitted by Section 9.19(a)
hereof (the "Permitted Redemption Amount") by an amount not in excess
of $6,100,000 (the amount of $6,100,000 being hereinafter referred to
as the "Permitted Overage"); PROVIDED, HOWEVER, that if (i) the
Permitted Redemption
2
<PAGE> 3
Amount exceeds the principal amount of Debentures redeemed on the
Debenture Redemption Date (the "Actual Redemption Amount"), the
Actual Redemption Amount shall be treated as and deemed to have been
a Restricted Payment for the purpose of any determination under
Section 9.19(a) hereof with respect to any Restricted Payment or
Restricted Investment proposed to be made on a date subsequent to the
Debenture Redemption Date, (ii) the Actual Redemption Amount exceeds
the Permitted Redemption Amount by an amount not in excess of the
Permitted Overage, the Permitted Redemption Amount shall be treated
as and deemed to have been a Restricted Payment for the purpose of
any determination under Section 9.19(a) hereof with respect to any
Restricted Payment or Restricted Investment proposed to be made on a
date subsequent to the Debenture Redemption Date, or (iii) the Actual
Redemption Amount exceeds the Permitted Redemption Amount by an
amount in excess of the Permitted Overage, an amount equal to the
difference between (x) the Actual Redemption Amount and (y) the
Permitted Overage shall be treated as and deemed to have been a
Restricted Payment for the purpose of any determination under Section
9.19(A) hereof with respect to any Restricted Payment or Restricted
Investment proposed to be made on a date subsequent to the Debenture
Redemption Date; PROVIDED, FURTHER, that nothing in this Section
9.19(c) shall be deemed to permit any redemption of Debentures in a
principal amount in excess of the sum of the Permitted Redemption
Amount and the Permitted Overage and any such redemption shall
constitute a Default hereunder.
SECTION 1.2. AMENDMENTS TO SECTION 12.1 OF THE PURCHASE AGREEMENT.
The following definitions are added to Section 12.1 of the Purchase Agreement,
to be inserted therein in the appropriate alphabetical order:
The term "ACTUAL REDEMPTION AMOUNT" shall have the
meaning set forth in Section 9.19(c) hereof.
The term "DEBENTURE" shall have the meaning set forth in
Section 2.1(a) hereof.
The term "DEBENTURE REDEMPTION DATE" shall have the
meaning set forth in Section 9.19(c) hereof.
The term "INDENTURE" shall mean the Indenture dated as
of August 1, 1983 between the Company and BancOhio National Bank, as trustee,
pursuant to which the Debentures were issued.
The term "PERMITTED OVERAGE" shall have the meaning set
forth in Section 9.19(c) hereof.
The term "PERMITTED REDEMPTION AMOUNT" shall have the
meaning set forth in Section 9.19(c) hereof.
SECTION 2. AMENDMENTS TO THE NOTES. Subject to the condition specified in
Section 2.1 hereof, it is hereby agreed that the Notes shall be amended in the
respects specified in Section 2.2 hereof.
3
<PAGE> 4
SECTION 2.1. CONDITION TO EFFECTIVENESS. The amendments to the Notes
set forth in Section 2.2 hereof shall become effective on and as of the
Debenture Redemption Date if the Actual Redemption Amount exceeds the Permitted
Redemption Amount.
SECTION 2.2. AMENDMENTS TO NOTES. Subject to the condition set forth
in Section 2.1 hereof, the Notes (and the form of Note annexed to the Purchase
Agreement as Exhibit A) shall be amended (i) to replace in the heading thereof
the phrase "9.79% Senior Note Due November 1, 2000" with the phrase "10.04%
Senior Note due November 1, 2000"; (ii) replace the phrase "9.79% per annum" in
the first paragraph thereof with the phrase "10.04% per annum"; (iii) to replace
the phrase "11.79% per annum" in the first paragraph thereof with the phrase
"12.04% per annum"; and (iv) to replace in the first sentence of the third
paragraph thereof the phrase "9.79% Senior Notes due November 1, 2000" with the
phrase "10.04% Senior Notes due November 1, 2000".
SECTION 2.3. AMENDMENT PROCEDURE. If the amendments set forth
in Section 2.2 hereof become effective, they shall become effective without
further action by the Company or the Noteholder, regardless of whether any of
the procedures set forth in this Section 2.3 are carried out, and interest on
the Notes shall accrue at the amended rate from and after the Debenture
Redemption Date. So long as the Noteholder continues to hold the Notes, no
action shall be required on the part of the Noteholder or on the part of the
Company to reflect the amendments to the Notes set forth in Section 2.2 hereof,
but the Noteholder may, at its election, imprint on the first page of the Note
the following legend:
THIS NOTE HAS BEEN AMENDED BY AN AMENDMENT DATED AS OF
NOVEMBER 1, 1991 WHICH MODIFIES CERTAIN PROVISIONS OF
THE NOTE PURCHASE AGREEMENT REFERRED TO IN THIS NOTE AND
AMENDS THE RATE AT WHICH INTEREST IS PAID ON THIS NOTE
TO (1) 10.04% PER ANNUM ON TIMELY PAYMENTS OF INTEREST
AND (2) 12.04% PER ANNUM ON OVERDUE PAYMENTS OF
PRINCIPAL, PREMIUM AND (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) INTEREST. A COPY OF SUCH AMENDMENT MAY
BE EXAMINED AT THE PRINCIPAL OFFICE OF THE COMPANY.
If any Note is transferred or if any new Note is issued by the Company upon
registration of transfer, exchange or replacement of a Note pursuant to Section
8 of the Purchase Agreement, the new Note so issued by the Company shall reflect
the amendments adopted in Section 2.2 hereof.
SECTION 2.4. NOTICE OF REDEMPTION. Promptly after the Debenture
Redemption Date, and in any case within three (3) Business Days thereafter, the
Company shall deliver to the Noteholder an Officer's Certificate setting forth
(i) the date of the Debenture Redemption Date, (ii) the Actual Redemption Amount
(the aggregate principal amount of Debentures which was redeemed for cash on the
Debenture Redemption Date), (iii) the Permitted Redemption Amount (the principal
amount of Debentures which the Company would have been permitted to redeem on
the Debenture Redemption Date pursuant to Section 9.19(a) if this Amendment had
not been executed and Section 9.19(c) had not been added to the Purchase
Agreement pursuant hereto and (iv)
4
<PAGE> 5
whether the condition specified in Section 2.1 hereof has been satisfied and the
amendments to the Notes specified in Section 2.2 hereof have gone into effect.
SECTION 3. MISCELLANEOUS.
SECTION 3.1. CROSS-REFERENCES. References in this Amendment to any
Section (or "Section ") are, unless otherwise specified, to such Section (or
"Section ") of this Amendment.
SECTION 3.2. INSTRUMENT PURSUANT TO PURCHASE AGREEMENT. This
Amendment is executed pursuant to Section 13.4 of the Purchase Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered,
and applied in accordance with all of the terms and provisions of the Purchase
Agreement. Except as expressly amended, hereby, all of the representations,
warranties, terms, covenants and conditions of the Purchase Agreement and the
Notes shall remain unamended and unwaived. The amendments set forth herein shall
be limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be a waiver of, amendment of, consent to or
modification of any other term or provision of the Purchase Agreement or the
Notes or of any term or provision of any other document or of any transaction or
further action on the part of the Company which would require the consent of any
Noteholder under the Purchase Agreement.
SECTION 3.3. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 3.4. COUNTERPARTS. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
SECTION 3.51. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers duly authorized thereunto
as of the day and year first above written.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ John V. Goodger
---------------------------------------------------
Name: John V. Goodger
Title: Vice President and Treasurer
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ Loren S. Archibald
---------------------------------------------------
Name: Loren S. Archibald
Title: Managing Director
5
<PAGE> 1
CALFEE, HALTER & GRISWOLD LLP
A T T O R N E Y S A T L A W
----------
1400 McDonald Investment Center
800 Superior Avenue Cleveland, Ohio 44114-2688
216/622-8200 Fax 216/241-0816
EXHIBIT 5.1
March 10, 1999
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 1,000,000 of the
Company's common shares, without par value (the "common shares"), to be sold by
Wachovia Bank of North Carolina, N.A., as trustee (the "Trustee") of The Pioneer
Stock Benefit Trust (the "Trust") established by the Share Subscription
Agreement and Trust, dated July 2, 1996, between the Company and the Trustee
(the "Agreement"), we have examined the following:
(i) the Amended Articles of Incorporation 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 Agreement; and
(iv) 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 the common shares
to be sold by the Trustee are duly authorized and validly issued and, when
payment for such shares is received as provided in the Agreement, will be fully
paid and nonassessable.
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.
This opinion is delivered to you solely in connection with the filing
of the Registration Statement with respect to the common shares, 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 "Legal Opinion."
Respectfully submitted,
/s/ Calfee, Halter & Griswold LLP
CALFEE, HALTER & GRISWOLD LLP
<PAGE> 1
EXHIBIT 23.1
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 1,000,000 common shares of
Pioneer-Standard Electronics, Inc. and to the incorporation by reference of our
reports dated May 5, 1998, 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), as amended, for the year ended March
31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Cleveland, Ohio
March 10, 1999
