<PAGE> 1
As filed with the Securities and Exchange Commission on February 1, 2000
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
BRUSH ENGINEERED MATERIALS INC.
(Exact name of registrant as specified in its charter)
Ohio 3330 applied for
(State or other jurisdiction of (Primary Standard (I.R.S. employer
incorporation or organization) Industrial Code identification number)
Number)
17876 St. Clair Avenue
Cleveland, Ohio 44110
(216) 486-4200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------------------
GORDON D. HARNETT
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
BRUSH ENGINEERED MATERIALS INC.
17876 ST. CLAIR AVENUE
CLEVELAND, OHIO 44110
(216) 486-4200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copies to:
DAVID P. PORTER, ESQ.
JONES, DAY, REAVIS & POGUE
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114
(216) 586-3939
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: As soon as practicable after this registration statement has become
effective and all other conditions to the merger of Brush Wellman Inc. with
Brush Engineered Materials Inc. pursuant to the merger agreement described in
the enclosed proxy statement/prospectus have been satisfied or waived.
---------------------------
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, 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(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
-----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
==============================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, without par value 22,517,000(1) (2) $ 16.00 (3) $ 360,270,000 (3) $ 95,111
==============================================================================================================================
</TABLE>
---------------------------
(1) Represents the number of shares of common stock of the registrant
issuable upon consummation of the merger described in the proxy
statement/prospectus.
(2) One preferred share purchase right will attach to and trade with each
share of common stock. These rights are also covered by this
registration statement and the value attributed to them, if any, is
reflected in the market price of the common stock.
(3) Based upon the average high and low prices reported in the consolidated
reporting system of the shares of common stock of Brush Wellman Inc.,
an Ohio corporation, on the New York Stock Exchange on January 25,
2000, in accordance with Rule 457(f) and Rule 457(c), and estimated
solely for the purpose of determining the amount of the registration
fee pursuant to such rule.
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 this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
===============================================================================
<PAGE> 2
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Dear Shareholder:
You are cordially invited to attend our annual meeting of shareholders,
which will be held on May 2, 2000 at 11:00 a.m. at the Forum, One Cleveland
Center, 1375 East Ninth Street, Cleveland, Ohio 44114.
Enclosed are a proxy card and a postage-paid envelope in which to
return it. Whether or not you expect to attend the annual meeting in person,
please sign, date and return the proxy. The signed proxy will let your shares be
voted as you direct even if you cannot attend the meeting. If you do attend the
meeting, you can, of course, vote in person.
In addition to the election of directors and certain other matters
customarily addressed at our annual meeting, you are being asked to approve a
reorganization of our corporate structure, including the creation of Brush
Engineered Materials Inc. as the publicly held parent of our businesses.
Following the reorganization, our existing shareholders will own all of the
shares of Brush Engineered Materials. Brush Wellman Inc. will be a wholly-owned
subsidiary of the new holding company.
The proposed reorganization of our corporate structure better reflects
the way the company is organized and operates today and will in the future. In
this new structure, each of our domestic and international businesses will be
better positioned to capture the benefits of their individual growth
opportunities unencumbered by and protected from the financial and operating
risks of other regions or businesses. This new structure is consistent with our
strategic emphasis and provides the added flexibility to take advantage of the
opportunities presented by the rapid growth of the worldwide markets the company
serves.
We believe that the proposed structure enhances shareholder value by
providing investors a better understanding of the value of each of our
independent businesses. Our ability to focus on and capture the unique growth
opportunities open to each of our businesses will be enhanced by this new
structure. The added flexibility provided by the new structure will allow us to
more easily consider alternatives to extract value from those individual
businesses for our shareholders.
We look forward to the meeting and seek your support for the continued
growth of the enterprise.
Sincerely,
GORDON D. HARNETT
Chairman, President and Chief Executive Officer
March ___, 2000
<PAGE> 3
PRELIMINARY COPY
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Brush Wellman Inc. will be held
at the Forum, One Cleveland Center, 1375 East Ninth Street, Cleveland, Ohio
44114, on May 2, 2000 at 11:00 a.m., local time, for the following purposes:
(1) To elect three directors, each to serve for a term of three
years and until a successor shall have been elected and
qualified;
(2) To reorganize Brush Wellman's capital and corporate structure:
- Through a merger, Brush Wellman will become a wholly
owned subsidiary of Brush Engineered Materials Inc.,
an Ohio corporation;
- Each share of common stock of Brush Wellman will be
converted automatically into one share of common
stock of Brush Engineered Materials;
(3) To ratify the selection of Ernst & Young LLP as independent
auditors for Brush Wellman and Brush Engineered Materials for
the year 2000; and
(4) To transact such other business as may properly come before
the meeting.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REORGANIZATION AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE REORGANIZATION.
Shareholders of record as of the close of business on March 6, 2000 are
entitled to notice of the meeting and to vote at the meeting or any adjournment
or postponement of the meeting.
MICHAEL C. HASYCHAK
Secretary
March ___, 2000
IMPORTANT -- YOUR PROXY IS ENCLOSED
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 4
PRELIMINARY COPY
PROXY STATEMENT FOR
BRUSH WELLMAN INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 2, 2000
-------------------------
PROSPECTUS FOR
BRUSH ENGINEERED MATERIALS INC.
-------------------------
Common Stock, no par value
Your Board of Directors is furnishing this document to you in
connection with the solicitation of your proxy for our annual meeting of
shareholders. Among other things, you are asked to consider and approve our
proposal to reorganize our businesses by creating a new capital and corporate
structure for our operations, including a new publicly held holding company,
Brush Engineered Materials.
Our proposed reorganization will mean Brush Wellman Inc. will become a
wholly-owned subsidiary of a newly formed holding company, Brush Engineered
Materials Inc. In the reorganization, each share of Brush Wellman's issued and
outstanding common stock will be converted automatically into one share of Brush
Engineered Materials' common stock. As a result of the reorganization, the
shareholders of Brush Wellman will become the shareholders of Brush Engineered
Materials.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this document is March ___, 2000, and it was first mailed
to shareholders on or about March ___, 2000.
This document incorporates important business and financial information
about Brush Wellman Inc. and Brush Engineered Materials Inc. from other
documents. You can obtain these documents from us, free of charge, upon oral or
written request to:
Brush Wellman Inc.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Telephone: 216-383-6823
Attention: Corporate Secretary
Brush Engineered Materials will maintain the same address and telephone number
as provided above for Brush Wellman.
IN ORDER TO RECEIVE ANY DOCUMENTS YOU REQUEST IN ADVANCE OF OUR ANNUAL
MEETING, YOU SHOULD MAKE YOUR REQUEST NO LATER THAN APRIL 25, 2000.
See "Where You Can Find More Information" on page 33.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
QUESTIONS AND ANSWERS
ABOUT THE ANNUAL MEETING..................................................................................4
SUMMARY ..........................................................................................................7
GENERAL INFORMATION................................................................................................8
ELECTION OF DIRECTORS..............................................................................................8
COMMITTEES OF THE BOARD OF DIRECTORS.....................................................................11
DIRECTOR COMPENSATION....................................................................................12
BENEFICIAL OWNERSHIP TABLE...............................................................................13
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE .................................................14
SUMMARY COMPENSATION TABLE...............................................................................15
OPTION EXERCISES IN LAST FISCAL YEAR.....................................................................16
OPTION GRANTS IN LAST FISCAL YEAR........................................................................16
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR ...................................................17
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..................................................17
CUMULATIVE SHAREHOLDER RETURN AND PERFORMANCE PRESENTATION...............................................19
PENSION AND RETIREMENT BENEFITS..........................................................................20
REORGANIZATION....................................................................................................22
REASONS FOR THE REORGANIZATION...........................................................................22
DESCRIPTION OF THE MERGER................................................................................23
EXCHANGE OF CERTIFICATES.................................................................................23
CAPITALIZATION OF BRUSH ENGINEERED MATERIALS ............................................................24
EMPLOYEE BENEFIT PLANS...................................................................................24
CONDITIONS TO CONSUMMATION OF THE MERGER.................................................................24
AMENDMENTS, DEFERRAL OR ABANDONMENT OF MERGER AGREEMENT..................................................25
FACTORS AFFECTING THE CONSUMMATION OF THE REORGANIZATION.................................................25
POST-REORGANIZATION BOARD OF DIRECTORS
AND MANAGEMENT OF BRUSH ENGINEERED MATERIALS......................................................25
INITIAL FUNDING OF BRUSH ENGINEERED MATERIALS............................................................26
FEDERAL AND OHIO INCOME TAX CONSEQUENCES OF THE MERGER...................................................26
FINANCIAL STATEMENTS.....................................................................................28
PRICE RANGE OF BRUSH WELLMAN COMMON STOCK; DIVIDENDS.....................................................28
LISTING; BRUSH ENGINEERED MATERIALS COMMON STOCK TRADING MARKET..........................................29
DISSENTER'S RIGHTS.......................................................................................29
DESCRIPTION OF BRUSH ENGINEERED MATERIALS COMMON STOCK...................................................31
DESCRIPTION OF THE PREFERRED STOCK.......................................................................32
REGISTRAR AND TRANSFER AGENT.............................................................................32
EXPERTS..................................................................................................32
LEGAL MATTERS............................................................................................33
APPOINTMENT OF INDEPENDENT AUDITORS...............................................................................33
SHAREHOLDER PROPOSALS.............................................................................................33
WHERE YOU CAN FIND MORE INFORMATION...............................................................................33
OTHER MATTERS.....................................................................................................35
</TABLE>
2
<PAGE> 6
LIST OF ANNEXES
Annex A -- Agreement of Merger
Annex B -- Amended and Restated Articles of Incorporation of Brush
Engineered Materials Inc.
Annex C -- Amended and Restated Code of Regulations of Brush Engineered
Materials Inc.
Annex D -- Second Amended and Restated Articles of Incorporation of
Brush Wellman Inc.
Annex E -- Code of Regulations of Brush Wellman Inc.
Annex F -- Sections 1701.84 and 1701.85 of the Ohio Revised Code
Annex G -- Summary of Brush Engineered Materials Inc. Rights Agreement
3
<PAGE> 7
QUESTIONS AND ANSWERS
ABOUT THE ANNUAL MEETING
I. GENERAL
Q. WHAT AM I BEING ASKED TO VOTE ON?
A. You are being asked to vote on three matters:
- the election of directors;
- the reorganization of our corporate structure, which includes:
- the creation of Brush Engineered Materials as the
publicly held parent of our businesses;
- the conversion of all Brush Wellman common stock into
common stock of Brush Engineered Materials with the
result that you will be a shareholder of the parent
company, Brush Engineered Materials, following the
merger; and
- the ratification of the appointment of our independent
auditors.
Q. WHO IS ELIGIBLE TO VOTE?
A. You are eligible to vote at the annual meeting if you were a
shareholder of record at the close of business on March 6, 2000.
II. THE REORGANIZATION
Q. WHY SHOULD I VOTE IN FAVOR OF THE REORGANIZATION?
A. The reorganization will improve our corporate structure. We believe it
will offer the following benefits:
- the opportunity for enhanced shareholder value through
- providing an organizational structure that permits us
to better reflect the way we run our businesses both
as to operations and geographic regions;
- giving us more flexibility in structuring
acquisitions and other strategic developments;
- added flexibility to take advantage of the opportunities
presented by the rapid growth of the worldwide markets the
company serves; and
- increased protection for our businesses, with risks and
benefits of our various domestic and international operations
more clearly segregated below the level of Brush Engineered
Materials.
Q. WHAT IS THE POSITION OF THE BOARD OF DIRECTORS REGARDING THE
REORGANIZATION?
A. Your Board of Directors has unanimously approved the reorganization,
including the merger agreement, and recommends that you vote FOR the
reorganization.
Q. HOW MANY SHARES OF BRUSH ENGINEERED MATERIALS WILL I RECEIVE?
A. You will receive one share of Brush Engineered Materials common stock
for each share of Brush Wellman common stock you own. For example, if
you own one hundred shares of Brush Wellman common stock, you will
receive one hundred shares of Brush Engineered Materials common stock.
Q. HOW MANY VOTES ARE NEEDED FOR THE REORGANIZATION TO BE APPROVED?
A. At least a majority of the shares of the Brush Wellman common stock,
voting as a class, must vote in favor of the reorganization for it to
be approved.
As of March __, 2000, directors and executive officers of Brush Wellman
owned and were entitled to vote approximately ___ shares of Brush
Wellman common stock, or approximately __% of the shares of Brush
Wellman common stock outstanding on that date. The directors and
executive officers have indicated that they intend to vote the shares
of Brush Wellman common stock that they own for the reorganization.
4
<PAGE> 8
Q. WILL I HAVE ANY DISSENTER'S RIGHTS IF I DO NOT VOTE IN FAVOR OF THE
REORGANIZATION?
A. You are entitled to statutory dissenter's rights if you do not vote in
favor of the reorganization. You must follow certain procedures
described in this document to assert your dissenter's rights. See
"Dissenter's Rights" on page 29.
Q. WHAT ARE THE FEDERAL AND STATE INCOME TAX CONSEQUENCES TO ME RESULTING
FROM THE REORGANIZATION?
A. The conversion of Brush Wellman common stock into Brush Engineered
Materials common stock will be a tax free event to you under the
federal income tax laws as well as the tax laws of the State of Ohio.
You are urged to consult your tax advisor concerning the tax
consequences to you based upon your particular circumstances.
Q. HOW WILL MY RIGHTS AS A SHAREHOLDER DIFFER AFTER THE REORGANIZATION:
A. Your rights as a shareholder of Brush Engineered Materials will be
governed by Brush Engineered Materials' articles of incorporation and
code of regulations. The differences between the Brush Wellman and
Brush Engineered Materials' articles of incorporation and code of
regulations are described on page 31 of this proxy
statement/prospectus.
III. PROCEDURES
Q. WHAT DO I NEED TO DO NOW?
A. You are urged to mail your signed, dated proxy card in the enclosed
envelope as soon as possible so that your shares will be represented at
the annual meeting.
Q. WHAT DO I DO IF I WANT TO CHANGE MY VOTE?
A. You may change your vote by:
- sending a written notice to the Corporate Secretary of Brush
Wellman that is received prior to the shareholders' meeting
and indicating that you revoke your prior proxy card;
- signing another proxy card and returning it by mail prior to
the shareholders' meeting; or
- attending the shareholders' meeting and voting in person.
Q. WHAT IF MY SHARES ARE HELD IN MY BROKER'S NAME?
A. Your broker will vote your shares with respect to the reorganization
only if you provide written instructions to your broker on how to vote.
If you do not provide your broker with instructions, your shares will
not be voted with respect to the reorganization, but may be voted in
the election of our directors and ratification of our independent
auditors. To ensure that your broker receives your instructions, we
suggest that you send them by fax or by certified mail, return receipt
requested. If you wish to vote in person at the meeting, and hold your
shares in your broker's name, you must contact your broker and request
a document called a "legal proxy." You must bring this legal proxy to
the meeting in order to vote in person.
Q. WHAT IF I DO NOT VOTE?
A. Abstentions and broker non-votes will be counted as votes against the
reorganization.
Q. SHOULD I SEND IN MY SHARE CERTIFICATES TO RECEIVE CERTIFICATES FOR
SHARES OF BRUSH ENGINEERED MATERIALS?
A. No. Your share certificates representing Brush Wellman common stock
will automatically represent Brush Engineered Materials common stock
following the merger. There is no need to exchange your share
certificates. You will, however, be permitted to exchange your share
certificates for a certificate representing the same number of Brush
Engineered Materials common stock printed on new certificate paper if
you wish.
5
<PAGE> 9
WHO CAN HELP ANSWER YOUR QUESTIONS?
If you have additional questions or would like additional copies
of this document, you should contact:
Brush Wellman Inc.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Telephone: 216-383-6823
Attn: Corporate Secretary
Banks and brokerage firms please call: __________ at __________.
6
<PAGE> 10
SUMMARY
This summary highlights selected information from this document, and
does not contain all of the information that is important to you. To understand
the reorganization fully and for a more complete description of the legal terms
of the reorganization, you should read carefully this entire document and the
documents we have referred you to. See "Where You Can Find More Information"
(page 33). We have included page references parenthetically to direct you to a
more complete description of each topic presented in this summary.
THE COMPANIES (PAGE 22)
Brush Wellman Inc. is a leading international producer and supplier of
high-performance engineered materials and is the only fully-integrated producer
of beryllium, beryllium-containing alloys and beryllia ceramic in the world. In
addition, Brush Wellman produces engineered material systems and precious metal
and specialty alloy products.
Brush Engineered Materials is a newly formed Ohio corporation and has
not conducted any business since its formation. Brush Merger Co., a subsidiary
of Brush Engineered Materials, is an Ohio corporation newly formed for the sole
purpose of implementing the reorganization. At the time of the merger, Brush
Merger Co. will merge into Brush Wellman and cease to exist.
PROPOSED REORGANIZATION (PAGE 22)
After the reorganization, we will continue the existing businesses of
the company through Brush Wellman Inc. and other subsidiaries of Brush
Engineered Materials. We anticipate reorganizing Brush Wellman's businesses into
corporate structures under Brush Engineered Materials that better reflect our
operations and geographic regions and that protect certain businesses from the
risks inherent in others.
If you vote in favor of the reorganization, you will be voting in favor
of Brush Engineered Materials' capital structure as described in its articles of
incorporation. Brush Engineered Materials will have only one class of common
stock authorized and will have one class of preferred stock authorized. The
articles of incorporation and code of regulations for Brush Engineered Materials
reflect some changes from those of Brush Wellman.
We encourage you to read the merger agreement, which is attached as
Annex A to this document, because it governs the merger.
CONDITIONS TO THE MERGER (PAGE 24)
A number of conditions must be met or waived prior to the merger before
we will make it effective. The most significant conditions are:
- receipt of the required shareholder approval;
- that no more than of 10% of the common stock, in the
aggregate, are entitled to assert statutory dissenter's
rights;
- receipt of a satisfactory tax opinion with respect to the
merger, and
- New York Stock Exchange approval of the listing of Brush
Engineered Materials common stock.
We may also defer, terminate or abandon the merger agreement if we
determine that it would be in the shareholders' or Brush Wellman's best
interests.
EMPLOYEE BENEFIT PLANS (PAGE 24)
Employee benefit and welfare plans are expected to continue
substantially unchanged following the merger. Benefits that relate to
investments in shares of Brush Wellman common stock, such as the Brush Wellman
Inc. Savings and Investment Plan and rights under stock option and other equity
plans, will transfer to Brush Engineered Materials common stock. Some employees
of Brush Wellman may become employees of Brush Engineered Materials, and Brush
Engineered Materials may become a sponsor of some of Brush Wellman's employee
benefit and welfare plans.
POST-REORGANIZATION BOARD OF DIRECTORS AND MANAGEMENT OF BRUSH
ENGINEERED MATERIALS (PAGE 25)
After the reorganization, the members of your Board of Directors
currently serving their terms and those nominated in this document for election
will serve as directors of Brush Engineered Materials. The directors of Brush
Wellman, which will then be a wholly-owned subsidiary of Brush Engineered
Materials, will be identified by management.
7
<PAGE> 11
GENERAL INFORMATION
Your Board of Directors is furnishing this document to you in
connection with our solicitation of proxies to be used at our annual meeting of
shareholders to be held on May 2, 2000.
If you sign and return the enclosed proxy card, your shares will be
voted as indicated on the card. Without affecting any vote previously taken, you
may revoke your proxy by delivery to us of a new, later dated proxy with respect
to the same shares, or by giving written notice to us before or at the annual
meeting. Your presence at the annual meeting will not, in and of itself, revoke
your proxy.
At the close of business on March 6, 2000, the record date for the
determination of shareholders entitled to notice of, and to vote at, the annual
meeting, we had outstanding and entitled to vote ____________ shares of common
stock.
Each outstanding share of common stock is entitled to one vote on each
matter brought before the meeting. Under Ohio law, shareholders have cumulative
voting rights in the election of directors, provided that the shareholder gives
not less than 48 hours notice in writing to the President, any Vice President or
the Secretary of Brush Wellman that the shareholder desires that voting at such
election be cumulative, and an announcement of the giving of such notice is made
upon the convening of the meeting. When cumulative voting applies, each share
has a number of votes equal to the number of directors to be elected, and a
shareholder may give all of the shareholder's votes to one nominee or divide the
shareholder's votes among as many nominees as he or she sees fit. Unless
contrary instructions are received on proxies given to Brush Wellman, in the
event that cumulative voting applies, all votes represented by the proxies will
be divided evenly among the candidates nominated by the Board of Directors,
except that if voting in this manner would not be effective to elect all the
nominees, the votes will be cumulated in the discretion of the Board of
Directors so as to maximize the number of the nominees elected.
In addition to the solicitation of proxies by the use of the mails, we
may solicit the return of proxies in person and by telephone, telecopy or
e-mail. We will request brokerage houses, banks and other custodians, nominees
and fiduciaries to forward soliciting material to the beneficial owners of
shares and will reimburse them for their expenses. We will bear the cost of the
solicitation of proxies.
At the annual meeting, the inspectors of election appointed for the
meeting will tabulate the results of shareholder voting. Under Ohio law, our
articles of incorporation and our code of regulations, properly signed proxies
that are marked "abstain" or are held in "street name" by brokers and not voted
on one or more of the items before the meeting (if otherwise voted on at least
one item) will be counted for purposes of determining whether a quorum has been
achieved at the annual meeting. Votes withheld in respect of the election of
directors will not be counted in determining the election of directors.
Abstentions and broker non-votes in respect of the reorganization or the
selection of independent auditors will have the same effect as votes against
these items.
1. ELECTION OF DIRECTORS
Brush Wellman's code of regulations provides for three classes of
directors whose terms expire in different years. At the present time it is
intended that proxies will be voted for the election of Gordon D. Harnett,
William P. Madar and David H. Hoag. Pursuant to our code of regulations, the
class of directors whose term expires in 2000 has been reduced from four members
to three members effective upon the retirement of Mr. McInnes from the Board of
Directors on May 2, 2000.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
If any of these nominees should become unavailable, it is intended that
the proxies will be voted as the Board of Directors determines. We have no
reason to believe that any of the nominees will be unavailable. The three
nominees receiving the greatest number of votes will be elected as directors of
Brush Wellman.
If the reorganization is approved, the existing directors and those
elected at the annual meeting will become the directors of Brush Engineered
Materials.
8
<PAGE> 12
The following table sets forth information concerning the nominees and
the directors whose terms of office will continue after the meeting:
<TABLE>
<CAPTION>
NOMINEES WHOSE TERMS END IN 2003 CURRENT EMPLOYMENT
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Gordon D. Harnett Chairman of the Board,
Director since 1991 President and Chief Executive
Officer of Brush Wellman
Age -- 57
Mr. Harnett has been Chairman of the Board, President and Chief Executive Officer of Brush Wellman during the past
five years. He is a director of Lubrizol Corporation, MA Hanna Company and National City Bank, Cleveland.
- --------------------------------------------------------------------------------------------------------------------
William P. Madar Chairman of the Board,
Director since 1988 Nordson Corporation
Member -- Audit Committee, Governance Committee (Industrial Application
and Organization and Compensation Committee Equipment Manufacturer)
Age -- 60
Mr. Madar was elected Chairman of the Board of Nordson Corporation effective October 1997. Prior to that time, he
served as Vice Chairman of Nordson Corporation from August 1996 until October 1997 and as Chief Executive Officer
from February 1986 until October 1997. From February 1986 until August 1996 he also served as its President. He is
a director of Lubrizol Corporation, National City Bank, Cleveland and Nordson Corporation.
- --------------------------------------------------------------------------------------------------------------------
David H. Hoag Retired Chairman,
Director since 1999 The LTV Corporation
Member -- Organization and Compensation Committee (Integrated Steel Producer and
and Governance Committee Metal Fabricator)
Age -- 60
Mr. Hoag retired as Chairman of the Board of the LTV Corporation in January of 1999. He had served as its Chairman
since June 1991 and as Chief Executive Officer from February 1991 until September 1998 and President from January 1991
until July 1997. Mr. Hoag is a director of Lubrizol Corporation, MA Hanna Company, NACCO Industries, Inc. and The Chubb
Corporation. He is also a member of the Federal Reserve Board of Cleveland.
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS END IN 2002 CURRENT EMPLOYMENT
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Albert C. Bersticker Retired Chairman,
Director since 1993 Ferro Corporation (Specialty
Chemicals)
Member -- Governance Committee and Organization
and Compensation Committee
Age -- 65
Mr. Bersticker was elected Chairman of Ferro Corporation in February 1996 and retired in 1999. He served as Chief
Executive Officer of Ferro Corporation from 1991 until January of 1999 and as its President from 1988 until
February 1996. Mr. Bersticker is a director of Ferro Corporation, KeyCorp Inc. and Oglebay Norton Company.
- --------------------------------------------------------------------------------------------------------------------
Dr. Charles F. Brush, III Personal investments
Director since 1958
Member -- Audit Committee and Organization and
Compensation Committee
Age -- 76
There has been no change in Dr. Brush's occupation during the past five years.
- --------------------------------------------------------------------------------------------------------------------
David L. Burner Chairman, Chief Executive
Director since 1995 Officer and President
Member -- Audit Committee and Organization The B.F. Goodrich Company
and Compensation Committee (Specialty Chemicals and
Aircraft Systems and
Services)
Age -- 60
Mr. Burner was elected Chairman of The B.F. Goodrich Company in July 1997. He has served as Chief Executive
Officer of The B.F. Goodrich Company since December 1996 and as President since December 1995. Prior to his
election as President, he served as Executive Vice President of The B.F. Goodrich Company from October 1993 and
as Senior Vice President from April 1990. Mr. Burner is a director of Carolina Power & Light Company, Milacron
Inc. and The B.F. Goodrich Company.
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS END IN 2001 CURRENT EMPLOYMENT
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Joseph P. Keithley Chairman, Chief Executive
Director since 1997 Officer & President,
Member -- Governance Committee and Organization Keithley Instruments, Inc.
and Compensation Committee (Electronic Test and
Measurement Products)
Age -- 51
Mr. Keithley has been Chairman of the Board of Keithley Instruments, Inc. since 1991. He has served as Chief
Executive Officer of Keithley Instruments, Inc. since November 1993 and as its President since May 1994. He is a
Director of Keithley Instruments, Inc.
- --------------------------------------------------------------------------------------------------------------------
William R. Robertson Managing Partner,
Director since 1997 Kirtland Capital Partners
Member -- Audit Committee and Organization (Private Equity Investments)
and Compensation Committee
Age -- 58
Mr. Robertson has been a Managing Partner of Kirtland Capital Partners since September 1997. Prior to that time, he
was President of National City Corporation from October 1995 until July 1997. He also served as Deputy Chairman
from August 1988 until October 1995.
- --------------------------------------------------------------------------------------------------------------------
John Sherwin, Jr. President,
Director since 1981 Mid-Continent Ventures, Inc.
Member -- Audit Committee and Organization (Venture Capital Company)
and Compensation Committee
Age -- 61
Mr. Sherwin has been president of Mid-Continent Ventures, Inc. during the past five years.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors maintains, among other committees, an audit
committee, a governance committee and an organization and compensation
committee, the members of which are identified in the above table.
The audit committee held three meetings in 1999. Its principal functions
include:
- reviewing the engagement of independent auditors and
recommending action by the full Board of Directors with
respect to the auditors;
- reviewing the scope and results of the audit and any non-audit
services performed by the auditors;
- reviewing the adequacy of Brush Wellman's internal auditing,
accounting and financial controls; and
- reviewing with independent auditors their report and opinion
upon completion of their audit, including a review of any
significant transactions not in the ordinary course of
business and compliance with company policies and code of
conduct.
The governance committee held two meetings in 1999. Its principal functions
include:
- evaluation of candidates for board membership (including any
nominations of qualified candidates submitted in writing by
security holders to the Secretary of Brush Wellman);
11
<PAGE> 15
- recommendations to the full Board of Directors of candidates
to fill executive vacancies that arise from time to time; and
- recommendations to the full Board of Directors regarding Board
of Directors governance matters.
The organizational and compensation committee held six meetings in 1999.
Its principal functions include:
- reviewing executive compensation;
- taking action where appropriate or making recommendations to
the full Board of Directors with respect to executive
compensation;
- recommending the adoption of executive benefit plans;
- granting stock options and other awards; and
- recommending action on matters relating to management
succession and changes in organizational structure and review
of investment of pension assets and funding position of
retirement pensions.
The Board of Directors held seven meetings in 1999. Nine of the directors
attended at least 75% of the total meetings, and one director, David L. Burner,
attended less than 75% of the total meetings, held by the Board of Directors and
the committees on which they served during 1999.
DIRECTOR COMPENSATION
Each director who is not an officer of Brush Wellman receives an annual
retainer fee of $16,500 for each calendar year. The Chairman of each committee
(if not an officer) receives an additional $1,000 on an annual basis. In
addition, each director who is not an officer of Brush Wellman receives a fixed
meeting fee of $17,500 on an annual basis.
Brush Wellman maintains a Deferred Compensation Plan for Non-Employee
Directors. This plan provides each non-employee director the opportunity to
defer receipt of all or a portion of the compensation payable for his services
as a director. Brush Wellman, in turn, transfers an amount equal to the
reduction in compensation to a trust, which is invested, at the director's
discretion, in Brush Wellman common stock or in accordance with Brush Wellman's
investment policy. Directors are encouraged to take all or a portion of their
compensation in the form of common stock. For 1999, directors elected to receive
an aggregate of $172,000 ($138,000 for 2000) worth of Brush Wellman common stock
on a deferred basis under this plan.
Brush Wellman also maintains the 1997 Stock Incentive Plan for Non-Employee
Directors. Under the 1997 Stock Incentive Plan for Non-Employee Directors, one
director received a grant on February 3, 1999 of an option for 5,000 shares at
an exercise price of $14.66. In addition, this plan provides for an automatic
grant of 500 deferred shares of common stock to each eligible director on the
business day following the annual meeting of shareholders. During 1999, nine
directors were credited with 500 shares of Brush Wellman common stock each.
12
<PAGE> 16
BENEFICIAL OWNERSHIP TABLE
The following table sets forth, as of January 28, 2000, information with
respect to the beneficial ownership of Brush Wellman common stock by each person
known by Brush Wellman to be the beneficial owner of more than 5% of the common
stock, by each present director of Brush Wellman, by executive officers of Brush
Wellman and by all directors and executive officers of Brush Wellman as a group.
Unless otherwise indicated in the note to this table, the shareholders listed in
the table have sole voting and investment power with respect to shares
beneficially owned by them.
<TABLE>
<CAPTION>
NON-OFFICER DIRECTORS NUMBER OF SHARES(1) PERCENT OF CLASS
--------------------- ------------------ ----------------
<S> <C> <C>
Albert C. Bersticker............... 16,187 (2)(3) *
Dr. Charles F. Brush, III.......... 336,384 (2)(3)(4) 1.97%
David L. Burner.................... 16,441 (2)(3) *
David H. Hoag...................... 9,262 *
Joseph P. Keithley................. 6,535 (2)(3) *
William P. Madar................... 28,296 (2)(3) *
Robert M. McInnes.................. 23,078 (2)(3) *
William R. Robertson............... 21,097 (2)(3)(5) *
John Sherwin, Jr................... 30,824 (2)(3)(6) *
NAMED EXECUTIVE OFFICERS
Gordon D. Harnett.................. 388,159 (2) 2.28%
Alfonso T. Lubrano................. 20,828 (2) *
John J. Paschall................... 22,384 (2) *
William R. Seelbach................ 27,951 (2) *
Stephen Freeman.................... 71,387 (2) *
All directors and executive officers as a
group (including the Named Executive
Officers) (21 persons).......... 1,256,381 (7) 7.38%
OTHER PERSONS SSBC Fund Management Inc.
388 Greenwich Street
New York, New York 10013 2,341,472 (8) 13.74%
Joseph L. Harrosh
40900 Grimmer Boulevard
Fremont, California............. 864,220 (9) 5.07%
Brush Wellman Inc. Savings and
Investment Plan................. 1,285,293 (10) 7.54%
Private Capital Management, Inc.
3003 Tamiami Trail North
Naples, Florida................. 1,167,094 (11) 6.85%
</TABLE>
- ------------------
* Less than 1% of common stock.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, a person or entity is
considered to beneficially own shares if the person or entity has or
shares (a) voting power, which includes the power to vote or to direct
the voting of the shares, or (b) investment power, which includes the
power to dispose or direct the disposition of the shares. Unless
otherwise indicated, a person or entity has sole voting and sole
investment power with respect to the indicated shares. Shares that are
subject to stock options and that may be exercised within 60 days of
January 28, 2000 are deemed to be outstanding for the purpose of
computing the percentage of Brush Wellman common stock beneficially
owned by such person.
13
<PAGE> 17
(2) Includes shares covered by outstanding options exercisable within 60
days as follows: Mr. Harnett 352,000; Mr. Lubrano 13,800; Mr. Paschall
16,300; Mr. Seelbach 18,500; Mr. Freeman 64,000; and 5,000 for each of
Messrs. Bersticker, Brush, Burner, Hoag, Keithley, Madar, McInnes,
Robertson, and Sherwin. Also includes performance restricted shares
granted in 1999 pursuant to the 1995 Stock Incentive Plan, as amended,
which are subject to forfeiture if performance goals are not met, as
follows: Mr. Harnett 11,606; Mr. Lubrano 13,800; Mr. Paschall 16,300;
Mr. Seelbach 18,500; Mr. Freeman 64,000.
(3) Includes shares deferred under the Deferred Compensation Plan for
Non-Employee Directors, and 1997 Stock Incentive Plan for Non-Employee
Directors as follows: Mr. Bersticker 10,687; Dr. Brush 9,948; Mr.
Burner 11,441; Mr. Hoag 3,262; Mr. Keithley 1,535; Mr. Madar 22,096;
Mr. McInnes 13,978; Mr. Robertson 5,597; and Mr. Sherwin 8,122.
(4) Includes 40,000 shares owned by the Charles F. Brush III Charitable
Remainder Unitrust of which Dr. Brush is trustee and 3,000 shares owned
by the estate of Dr. Brush's wife, as to all of which Dr. Brush
disclaims ownership.
(5) Includes 500 shares owned by Mr. Robertson's wife of which Mr.
Robertson disclaims ownership.
(6) Includes 6,899 shares owned by Mr. Sherwin's wife and children and
3,008 held by Mr. Sherwin as Trust advisor of a charitable remainder
trust, as to all of which Mr. Sherwin disclaims beneficial ownership.
(7) Includes 708,520 shares subject to outstanding options held by officers
and directors and exercisable within 60 days.
(8) Information regarding share ownership was obtained from Schedule 13G
filed with the Commission on June 30, 1999.
(9) Information regarding share ownership was obtained from Schedule 13G
filed with the Commission on January 5, 2000.
(10) The Northern Trust Company, Chicago, Illinois, trustee for the Brush
Wellman Inc. Savings and Investment Plan holds the shares in trust. All
participants share voting power with the trustee of the Plan with
respect to shares credited to their account.
(11) Information regarding share ownership was obtained from Schedule 13F-HR
filed with the Commission on November 15, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and officers and
persons who own 10% or more of a registered class of our equity securities to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission. Directors, officers and 10% or greater
shareholders are required by Securities and Exchange Commission regulations to
furnish us with copies of all Forms 3, 4 and 5 they file.
Based solely on our review of the copies of such forms it has received, and
written representations by such persons, our belief is that all of our directors
and officers complied with all filing requirements applicable to them with
respect to transactions in our equity securities during the fiscal year ended
December 31, 1999.
14
<PAGE> 18
SUMMARY COMPENSATION TABLE
The following table sets forth the before-tax compensation for the
years shown for Mr. Harnett and the four next highest paid executive officers at
the end of 1999.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
--------------------- -------------
AWARDS PAYOUTS
------ -------
NAME AND SECURITIES LTIP ALL OTHER
PRINCIPAL SALARY BONUS UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR ($) ($) OPTIONS ($) (2) ($)(3)
----------- ---- ------------ ----------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Gordon D. Harnett.......... 1999 . 439,696 (4) -- 37,000 -- 13,191 (4)
Chairman of the Board, 1998 435,163 (4) -- 30,000 -- 70,169 (4)
President and Chief 1997 398,879 (5) 160,846 (6) 40,000 -- 18,001 (5)
Executive Officer
Alfonso T. Lubrano......... 1999. 169,846 (4) 125,800 7,000 -- 5,376 (4)
President, Technical 1998 165,143 (4) 9,360 6,000 47,866 10,495 (4)
Materials, Inc. 1997 139,338 (5) 85,368 6,000 -- 6,024 (5)
John J. Paschall.......... 1999 166,307 (4) 123,210 8,000 -- 7,530 (4)
President, Williams 1998 158,923 (4) 84,700 6,000 26,081 6,802 (4)
Advanced Materials Inc. 1997 133,759 (5) 67,807 6,000 -- 5,031 (5)
William R. Seelbach....... 1999 259,846 (4) -- 11,000 -- 8,845 (4)
President, 1998 125,000 (7) 35,000 (7) 7,500 -- --
Alloy Products 1997 n/a n/a n/a n/a n/a
Stephen Freeman.......... 1999 207,877 (4) -- 9,000 -- 6,236 (4)
President, 1998 206,537 (4) -- 6,000 -- 17,585 (4)
Brush Wellman
International 1997 176,438 (5) 50,054 9,000 -- 7,602 (5)
</TABLE>
- ------------------
(1) No compensation was paid to any of the named executive officers that
requires disclosure as "Other Annual Compensation."
(2) Payouts in 1998 reflect performance restricted shares and performance
shares awarded in 1996 that were earned by the named executive officers
for the performance period 1996 through 1998, valued at Brush Wellman's
common stock price on February 2, 1999 plus accumulated dividends
earned on those shares.
(3) Except as noted in (4), and (5) amounts in All Other Compensation
consist of company matching contributions to the Brush Wellman Inc.
Savings and Investment Plan.
(4) Salary for 1999 and 1998 includes compensation the executive officer
elected to replace with options to purchase property other than company
securities under Brush Wellman's Key Employee Share Option Plan as
follows: Mr. Harnett $16,781 and $22,292; Mr. Lubrano $1,921 and
$9,051; Mr. Paschall $9,101 and $4,004; Mr. Seelbach $13,485 and $0;
Mr. Freeman $4,788 and $9,659. All Other Compensation for 1999 and 1998
includes amounts in connection with options to purchase property other
than Brush Wellman securities under Brush Wellman's Key Employee Share
Option Plan as follows: Mr. Harnett $8,391 and $65,369; Mr. Lubrano
$576 and $5,695; Mr. Paschall $2,730 and $2,002; Mr. Seelbach $4,045
and $0; and Mr. Freeman $1.436 and $12,785. The Key Employee Share
Option Plan provides for options covering property with an initial
value equal to the amount of compensation they replace, divided by 75%,
and with an exercise price equal to the difference between that amount
and the amount of compensation replaced. Thus, the executive officer
may receive the increase or decrease in market value of the entire
amount of the property covered by the option, including the exercise
price. Mr. Harnett's salary for 1999 also includes $107,156 of deferred
compensation under the Executive Deferred Compensation Plan.
(5) Salary for 1997 includes deferred compensation as follows: Mr. Harnett
$19,385; Mr. Lubrano $4,081; Mr. Paschall $463; and Mr. Freeman $9,340.
All Other Compensation for 1997 includes deferred compensation in
respect of company matching credits under the Brush Wellman Inc.
Supplemental Retirement Benefit Plan as follows: Mr. Harnett $13,201;
Mr. Lubrano $1,224; Mr. Paschall $231; and Mr. Freeman $2,802.
(6) Bonus for 1997 includes deferred compensation of $3,868.
(7) Mr. Seelbach has only been an executive officer since June 1998. Bonus
for 1998 reflects incentive compensation earned pursuant to an
employment letter agreement, dated as of June 24, 1998, between Mr.
Seelbach and Brush Wellman Inc., filed as an exhibit to the company's
Form 10-Q for the quarterly period ended July 3, 1998.
15
<PAGE> 19
OPTION EXERCISES IN LAST FISCAL YEAR
The following table provides information about stock options exercised by the
executive officers who are included in the Summary Compensation Table and the
value of such officers' unexercised options at December 31, 1999.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY OPTIONS
UNDERLYING UNEXERCISED AT DECEMBER 31, 1999
SHARES ACQUIRED OPTIONS AT DECEMBER 31, 1999 EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED EXERCISABLE/ UNEXERCISABLE UNEXERCISABLE
---- ------------- -------------- -------------------------- -------------
<S> <C> <C> <C> <C>
Gordon D. Harnett -- -- 352,000 396,520
- -
Alfonso T. Lubrano -- -- 13,800 15,708
- -
John J. Paschall -- -- 16,300 20,957
- -
William R. Seelbach -- -- 18,500 23,348
- -
Stephen Freeman -- -- 64,000 84,140
- -
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information about stock option grants
during 1999 to the executive officers who are included in the Summary
Compensation Table. There was one grant of options to the named executive
officers during the year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
PERCENT OF
NUMBER TOTAL
OF OPTIONS POTENTIAL REALIZABLE VALUE AT ASSUMED
SHARES GRANTED TO ANNUAL RATES OF STOCK PRICE APPRECIATION FOR
UNDER- EMPLOYEES EXERCISE OF OPTION TERM
LYING IN FISCAL BASE PRICE EXPIRATION -----------------------------------------------
NAME OPTIONS YEAR ($/SH) DATE 0%($) 5%($) 10%($)
---- ------- ------ -------- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Gordon D. Harnett 37,000 15.42 $14.69 2/2/09 $0 $341,823 $866,247
Alfonso T. Lubrano 7,000 2.92 $14.69 2/2/09 $0 $ 64,669 $163,885
John J. Paschall 8,000 3.33 $14.69 2/2/09 $0 $ 73,908 $187,297
William R. Seelbach 11,000 4.58 $14.69 5/5/08 $0 $101,623 $257,533
Stephen Freeman 9,000 3.75 $14.69 2/2/09 $0 $ 83,146 $210,709
</TABLE>
16
<PAGE> 20
LONG-TERM INCENTIVE PLANS --AWARDS IN LAST FISCAL YEAR
No performance restricted shares or performance shares were awarded
during the year 1999 pursuant to the 1995 Stock Incentive Plan, as amended.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Organization and Compensation Committee of the Board of Directors
is composed of all independent, non-employee directors of the board. The
committee is responsible for developing and making policy recommendations to the
board with respect to Brush Wellman's executive compensation. In addition, the
committee, pursuant to authority delegated by the board, determines on an annual
basis the compensation to be paid to the Chief Executive Officer and each of the
other executive officers of Brush Wellman.
COMPENSATION PHILOSOPHY - PAY FOR PERFORMANCE
The committee's compensation philosophy is to recognize
superior results with superior monetary rewards. Where results are below
expectation, pay will directly reflect the less-than-targeted performance.
TOTAL COMPENSATION STRATEGY
The executive compensation strategy is to attract and retain
qualified executives and to provide appropriate incentives to achieve the
long-term success of Brush Wellman and to enhance shareholder value over the
long term. Brush Wellman employs a total compensation strategy, taking into
consideration base pay, annual performance compensation and long-term
incentives. Base salary is generally established at moderately competitive
levels, and greater weight is put on the performance-driven portions of the
compensation package.
BASE SALARY
Base salaries are established by the committee based on an
executive's job responsibilities, level of experience, individual performance
and contribution to the business. Consistent with generally published executive
compensation surveys, in 1999 the Chief Executive Officer's base salary was
increased by the committee by 4.7% from approximately $420,000 to approximately
$440,000, and the executive officers, other than the Chief Executive Officer,
received 4% increases in base salary. A few executives received higher increases
due primarily to increased responsibilities and/or enlarged scope of their
business units.
ANNUAL PERFORMANCE COMPENSATION
A Management Performance Compensation Plan provides for
annual, single-sum cash payments that are based on achieving preestablished
financial objectives. These objectives are established by the committee on an
annual basis. The Chief Executive Officer's annual performance compensation was
based entirely on financial performance and is 100% dependent on total company
results. The other executive officers' annual performance compensation was also
completely based on financial performance and was dependent on company results
and/or relevant business unit results.
The percentage of base salary available for annual performance
compensation under the Management Performance Compensation Plan varies according
to the level of the individual's responsibility. The Chief Executive Officer may
attain 52% of base pay for achieving the targeted objective, 104% for exceeding
the maximum objective, and 0% if the minimum objective is not attained.
Likewise, the other executive officers may achieve 37%, 74% and 0%,
respectively. In 1999, Brush Wellman's minimum objective, which was based on
earnings per share, was not achieved. As a result, the Chief Executive Officer
did not receive a payout from this plan. The Presidents of Williams Advanced
Materials Inc., Technical Materials, Inc. and Electronic Products did receive
payouts as a result of the financial performance of their individual business
units as measured by operating income. All other executives did not receive a
payout from this plan.
17
<PAGE> 21
LONG TERM INCENTIVES
Stock Incentive Plan. The shareholder-approved 1995 Stock
Incentive Plan was designed to afford the Committee flexibility in making
awards to align Brush Wellman's long-term incentives with shareholder interest.
The Stock Incentive Plan provides the committee the ability to design
stock-based incentives for the achievement of superior results over multi-year
periods.
In early 1998, the committee granted performance awards with
management objectives based solely on stock price appreciation for a three-year
performance period from January 1, 1998 through December 31, 2000, under the
Stock Incentive Plan. Eligible participants were granted combined awards of
performance restricted shares, performance shares and performance units, which
will be earned only if the management objectives are reached during the
performance period. The amount of each of these performance awards was
established by applying a factor to the base salary for each eligible
individual. The Chief Executive Officer's 1998- 2000 awards gives him the
opportunity to earn performance restricted shares and performance units
equivalent to 100% of base pay in effect at January 1, 1998, based on the
average stock price at the date of grant (January 27, 1998). The Chief Executive
Officer was granted 11,606 performance restricted shares, together with one half
that number of performance shares. Performance restricted shares will be
forfeited to the extent the goals specified by the committee are not met, and
the performance share portion of the award will only result in the issuance of
shares if performance over the three-year performance period exceeds target.
The other executive officers also received similar performance
awards in accordance with the Stock Incentive Plan. Their opportunity to receive
performance restricted shares and performance units for the 1998 through 2000
performance period was equivalent to 45% to 70% of base pay in effect at January
1, 1998. In addition, one half of the number of performance restricted shares
were also granted in the form of performance shares.
Stock Options. Stock options are typically granted annually
to executives and other selected employees whose contributions and skills
are important in the long-term success of Brush Wellman. The options are
granted with an exercise price equal to the market price of Brush Wellman's
stock on the day of grant and vest over a period of up to four years and expire
after ten years.
In 1999, a total of 145 selected employees were awarded
options. The overall number of option shares granted was approximately 1.4% of
total shares outstanding.
The committee established a range of potential option awards
for the Chief Executive Officer and executive officers based on a 1997 total
compensation study performed on behalf of Brush Wellman. The specific number of
stock options granted to an executive was determined by the committee based upon
the individual's level of responsibility, recommendations by management, and a
subjective judgment of the committee of the executive's contribution to the
performance of the company. The number of options currently held by each
executive was not taken into consideration. In 1999, the committee granted the
Chief Executive Officer a stock option covering 37,000 shares of Brush Wellman
common stock.
DEDUCTIBILITY OF COMPENSATION IN EXCESS OF $1 MILLION A YEAR
In 1993, Congress enacted Section 162(m) of the Internal
Revenue Code of 1986, effective for tax years beginning in 1994. This
legislation precludes a public corporation from taking a deduction for
compensation in excess of $1 million per year for its Chief Executive Officer or
any of its four other highest-paid executive officers. However, certain
performance-based compensation is specifically exempt from the deduction limit.
The limitation has no immediate applicability to Brush Wellman. However, any
compensation derived from performance restricted shares or performance shares
awarded under the Stock Incentive Plan is expected to be exempt from the limit
on corporate tax deductions.
18
<PAGE> 22
The foregoing report has been furnished by the Organization
and Compensation Committee of the Board of Directors.
William A. Madar (Chairman)
Albert C. Bersticker
Charles F. Brush, III
David L. Burner
David H. Hoag
Joseph P. Keithley
Robert M. McInnes
William R. Robertson
John Sherwin, Jr.
CUMULATIVE SHAREHOLDER RETURN AND PERFORMANCE PRESENTATION
The following graph sets forth the cumulative shareholder return on
Brush Wellman common stock as compared to the cumulative total return of the S&P
500 Index for the five year period ending December 31, 1999, and a
self-constructed index consisting of Brush Wellman, Cabot Corporation, Carpenter
Technology Corp., Chase Industries Inc., Olin Corporation, Precision Castparts
Corp. and Worthington Industries, Inc. (1)
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR TOTAL RETURN (2)
BRUSH WELLMAN INC. S&P 500 SELF-CONSTRUCTED INDEX
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 100.65 137.44 154.31
1996 98.36 169.15 156.15
1997 152.24 225.57 184.56
1998 113.21 290.03 142.63
1999 112.47 351.07 136.32
</TABLE>
(1) Brush Wellman is a leading international producer and supplier of
beryllium, beryllium containing alloys, beryllia ceramic, engineered
material systems, precious metal and specialty alloy products. Most
competitors are either divisions or subsidiaries of larger
corporations, or privately-held companies. Brush Wellman does not fit
easily into any standardized peer company listing. A customized peer
group has been developed, consisting of specialty engineered materials
producers that either compete directly with Brush Wellman for major
portions of their business, operate using similar production
technologies or serve similar markets.
(2) Assumes that the value of Brush Wellman common stock and each index was
$100 on December 31, 1994 and that all dividends were reinvested.
19
<PAGE> 23
PENSION AND RETIREMENT BENEFITS
The Brush Wellman Inc. Pension Plan is a defined benefit plan under
which Messrs. Harnett, Freeman and Derry are currently accruing benefits. The
Technical Materials, Inc. Pension Plan is a defined benefit plan under which Mr.
Lubrano is currently accruing benefits. The Williams Advanced Materials Inc.
Retirement Plan is a defined benefit plan under which Mr. Paschall is currently
accruing benefits. The following tables show the estimated annual pension
benefits under the qualified pension plan as well as benefits provided under the
Supplemental Retirement Benefit Plan, to the extent that they supplement
benefits provided under the qualified pension plan, which would be payable,
without reduction for any optional form of payment, to employees in various
compensation classifications upon retirement at age 65 after selected periods of
service.
<TABLE>
<CAPTION>
TABLE FOR PARTICIPANTS OF BRUSH WELLMAN INC. PENSION PLAN
FINAL AVERAGE YEARS OF SERVICE AT AGE 65
ANNUAL PAY AT ------------------------------------------------------------------------------------------------
AGE 65 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$150,000 $ 19,075 $ 28,612 $ 38,150 $ 47,687 $ 57,225 $ 66,762
200,000 26,218 39,327 52,435 65,544 78,653 91,762
300,000 40,503 60,755 81,007 101,259 121,510 141,762
400,000 54,789 82,184 109,578 136,973 164,367 191,762
500,000 69,075 103,612 138,150 172,687 207,225 241,762
600,000 83,361 125,041 166,721 208,401 250,082 291,762
700,000 97,646 146,469 195,293 244,116 292,939 341,762
800,000 111,932 167,898 223,864 279,830 335,796 391,762
900,000 126,218 189,327 252,435 315,544 378,653 441,762
</TABLE>
<TABLE>
<CAPTION>
TABLE FOR PARTICIPANTS OF TECHNICAL MATERIALS, INC. PENSION PLAN
YEARS OF SERVICE AT AGE 65
FINAL AVERAGE -----------------------------------------------------
ANNUAL PAY AT
AGE 65 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 $19,154 $28,731 $38,308 $47,884 $ 57,461
200,000 25,538 38,308 51,077 63,846 76,615
300,000 38,308 57,461 76,615 95,769 114,923
400,000 51,077 76,615 102,153 127,692 153,230
</TABLE>
<TABLE>
<CAPTION>
TABLE FOR PARTICIPANTS OF WILLIAMS ADVANCED MATERIALS INC. RETIREMENT PLAN
YEARS OF SERVICE AT AGE 65
FINAL AVERAGE ---------------------------
ANNUAL PAY AT
AGE 65 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$150,000 $ 20,160 $ 30,240 $ 40,320 $ 50,400 $ 60,480 $ 70,560
200,000 27,660 41,490 55,320 69,150 82,980 96,810
300,000 42,660 63,990 85,320 106,650 127,980 149,310
400,000 57,660 86,490 115,320 144,150 172,980 201,810
</TABLE>
The compensation covered by the respective qualified pension plan and
the Supplemental Retirement Benefit Plan is regular base salary, sales
commissions and various other performance compensation. The compensation covered
by these plans is the same as the amounts shown in the salary, bonus and other
amounts of
20
<PAGE> 24
the LTIP Payouts columns of the Summary Compensation Table on page 15. Credited
years of service for pension benefit purposes for Messrs. Harnett, Lubrano,
Paschall, Seelbach and Freeman is 22, 7, 11, 1, and 7, respectively. The
Supplemental Retirement Benefit Plan adds 14 years to Mr. Harnett's company
pension service. The amounts shown in the above tables are computed on the basis
of a straight-life annuity (for the employee's life only). The benefits shown in
the Brush Wellman pension plan table are subject to reductions, in the case of
Mr. Harnett, for pension benefits from previous employers.
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with various senior
executives, including all of the executive officers named in the Summary
Compensation Table on page 15. These agreements provide benefits to the senior
executives in the event there is a "change in control" of Brush Wellman. The
material aspects of the employment agreements are summarized below.
In the event of a change in control, each executive will (if still an
employee) remain employed in substantially his position for at least four years
(three years under the agreements for Messrs. Paschall and Lubrano) or, if
earlier, until the first to occur of the death of the executive or his reaching
age 65. During the period, he will:
- receive an annual amount at least equal to his salary rate in
effect at the beginning of this period (or, if higher, his
salary rate at any time during the two full calendar years
immediately before the change in control);
- receive the highest incentive compensation award received by
him in any of the prior three years; and
- continue to participate in all of our benefit plans in which
he was participating and to receive all perquisites that were
available to him (or to other benefits and perquisites at the
same level as those he enjoyed) at the time of the change in
control.
After a change in control, the executive may be terminated by us for
"cause." If he is terminated without cause, or if he voluntarily terminates his
employment for any of the specified reasons described below, he will be entitled
to receive a lump sum payment equal to the present value of the remaining salary
and incentive compensation that would otherwise have been paid to him. Brush
Wellman is obligated to secure these payments through a trust to be funded at or
prior to the time of any change in control. The executive will also be entitled
to the continuation of benefits and perquisites. The agreements include
procedures intended to provide that none of the foregoing will constitute
"parachute payments" under Section 280G of the Internal Revenue Code. In
general, tax penalties would be imposed on the executive and Brush Wellman if
any of the foregoing were determined to constitute parachute payments. The
agreements for Messrs. Paschall and Lubrano contain comparable provisions that
limit payments to each of them to two times their average taxable income for a
period of five years.
The executive may terminate his employment with Brush Wellman and still
be entitled to receive the payments specified above in the event of:
- his good faith determination that, due to changed
circumstances significantly affecting his position with Brush
Wellman, he is unable to carry out his duties and
responsibilities;
- any reduction in compensation or any substantial reduction in
position; or
- any requirement that he have as his principal office any place
more than 50 miles from his principal residence at the time of
the change in control.
If the executive is terminated without cause, or if the executive
terminates his employment for any of the reasons specified above, he is, in
general, obligated for a period of two years (or, if less, the balance of the
period of his employment following a change in control) to use reasonable
efforts to seek other comparable employment. He is also generally obligated to
pay Brush Wellman 50% of all employment income from other employers earned by
him during that time and is subject for the same time to specified prohibitions
on competition.
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<PAGE> 25
Brush Wellman is obligated to pay all attorneys' and related fees and
expenses incurred by an executive as a result of Brush Wellman's failure to
perform its obligations under his agreement or as a result of specified
challenges to the validity or enforceability of, or the executive's performance
under, such agreement. This obligation of Brush Wellman must be secured by
insurance or as the Board of Directors otherwise determines.
It has not been determined to what extent the obligations of Brush
Wellman will become obligations of Brush Engineered Materials following the
reorganization.
2. REORGANIZATION
If a shareholder of record returns a signed proxy in the enclosed form,
the shares represented by the proxies will be voted FOR the reorganization
described in this document, unless you instruct otherwise. Your Board of
Directors has approved and adopted a merger agreement, a copy of which is
attached as Annex A and incorporated in this document by reference. Consummation
of the merger and the related transactions contemplated by the merger agreement
will result in a new holding company structure in which Brush Engineered
Materials will become the publicly held parent of Brush Wellman. The
consolidated financial condition of Brush Engineered Materials immediately after
the merger will be the same as ours immediately prior to the merger. See
"Financial Statements" on page 28.
REASONS FOR THE REORGANIZATION
We believe that our proposed holding company structure, together with
certain potential follow-on reorganizations of our various corporate structures
below the Brush Engineered Materials level, will conform our formal organization
with the way we currently conduct operations. In this new structure, each of
Brush Wellman's domestic and international businesses will be better positioned
to capture the benefits of their individual growth opportunities unencumbered by
and protected from the financial and operating risks of other regions or
businesses. This new structure is consistent with our strategic emphasis and
provides the added flexibility to take advantage of the opportunities presented
by the rapid growth of the worldwide markets Brush Wellman serves.
We also expect the proposed holding company structure to provide
increased protection for our businesses, with risks and benefits of various
domestic and international operations more clearly segregated below the level of
Brush Engineered Materials. For example, risks associated with contingent
claims, such as product liability actions or environmental claims, need not
burden the growth of businesses that do not incur these claims.
We are currently assessing the final structure of our operations
following the reorganization. Our analysis will be affected by a variety of tax,
accounting and legal consideration. Brush Wellman currently operates two primary
business segments: the Metal Systems Group and the Microelectronics Group. The
Metal Systems Group is comprised of Alloy Products, Beryllium Products and
Engineered Materials Systems and includes our wholly- owned subsidiary Technical
Materials, Inc. The second business segment is the Microelectronics Group, which
is comprised of Electronic Products (formerly Ceramic Products) and two
wholly-owned subsidiaries, Williams Advanced Materials Inc. and Circuits
Processing Technology, Inc. The following diagram shows conceptually our
corporate structure before the reorganization and the type of structure that may
evolve after the reorganization:
<TABLE>
<CAPTION>
BEFORE THE REORGANIZATION AFTER THE REORGANIZATION
------------------------- ------------------------
BRUSH WELLMAN INC. BRUSH ENGINEERED MATERIALS INC.
- -------------------------------------------- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Williams Technical Foreign and Brush Brush Williams Technical Other
Advanced Materials, Other Wellman Wellman Advanced Materials, Operations
Materials Inc. Operations Inc. International Materials Inc.
Inc. Inc.
- -------- ------- ------ ------ ------------- ---------- ---------- ---------
</TABLE>
22
<PAGE> 26
YOUR BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT AND
RECOMMENDS YOU VOTE FOR THIS PROPOSAL TO APPROVE THE REORGANIZATION. You are
urged to retain this document for future reference.
DESCRIPTION OF THE MERGER
The following discussion summarizes the material terms of the merger
agreement set forth in Annex A. Pursuant to the agreement, Brush Merger Co. will
merge into Brush Wellman. Brush Wellman will be the surviving corporation, will
continue to do business under its present name and initially will have the
rights, benefits, obligations and liabilities that we had prior to the merger.
As a result of the merger, Brush Engineered Materials will be the sole
shareholder of Brush Wellman, and the present shareholders of Brush Wellman will
become the shareholders of Brush Engineered Materials.
At the present time, 100 shares of Brush Engineered Materials are
issued and outstanding. Presently, 100 shares of Brush Merger Co. are issued and
outstanding, all of which are held by Brush Engineered Materials. The merger
agreement provides that, after satisfaction or waiver of all conditions under
the merger agreement, Brush Wellman and Brush Merger Co. will file the
appropriate certificate with the Secretary of State of Ohio, and as a result,
Brush Merger Co. will be merged into Brush Wellman. In the merger, each share of
Brush Wellman common stock issued and outstanding at the effective time of the
merger, other than those held by persons entitled to exercise statutory
dissenters' rights, will be converted into one share of Brush Engineered
Materials common stock, and Brush Engineered Materials will become the sole
shareholder of Brush Wellman. The 100 shares of Brush Engineered Materials
outstanding prior to the effective time of the merger will be canceled. As of
March __, 2000, there were [22,517,000] shares of Brush Wellman common stock
issued and outstanding and [6,000,000] shares of Brush Wellman common stock held
in treasury. After the merger, there will be ________ shares of Brush Engineered
Materials common stock issued and outstanding if no holders of common shares
exercise statutory dissenter's rights.
Pursuant to the Ohio General Corporation Law and Brush Wellman's
articles of incorporation, the approval of the reorganization requires the
affirmative vote of the holders of at least a majority of the outstanding common
stock, voting as a class. As of March ___, 2000, directors and executive
officers of Brush Wellman owned and were entitled to vote approximately ________
shares of Brush Wellman common stock, which represented approximately _______%
of the shares outstanding on that date. Each Brush Wellman director and
executive officer has indicated his present intention to vote for the
reorganization.
Your approval of the reorganization will also constitute your approval
of:
- the amended and restated articles of incorporation and the
amended and restated code of regulations of Brush Engineered
Materials, each of which will be in effect upon consummation
of the merger;
- the conversion of outstanding stock options and rights for
common stock into options or rights to purchase or receive
Brush Engineered Materials common stock; and
- all amendments to all of the foregoing deemed appropriate by
our Board of Directors and the Board of Directors of Brush
Engineered Materials.
After the merger, Brush Engineered Materials will consider other
corporate restructurings involving its subsidiaries. Although the exact nature
of these transactions requires further planning and may necessitate governmental
and third party approvals, the goal would be to eventually move to the
post-reorganization diagram referenced above, with operating subsidiaries for
various businesses positioned below Brush Engineered Materials.
EXCHANGE OF CERTIFICATES
If the reorganization is approved, your shares of Brush Wellman common
stock will automatically convert into Brush Engineered Materials common stock.
You should retain your certificates for shares of Brush Wellman common stock
because those certificates would then represent Brush Engineered Materials
common stock. While you do not need to exchange your share certificates
following the merger, you will be permitted to do so if you wish. Please contact
our Corporate Secretary for further information. See "Where You Can Find More
Information" on page 33.
23
<PAGE> 27
At the effective time of the merger, holders of certificates
representing shares of Brush Wellman common stock will cease to have any rights,
other than dissenter's rights, with respect to the shares. Each certificate will
be deemed for all corporate purposes to evidence the Brush Engineered Materials
common stock into which the shares have been converted. Our stock transfer books
will be closed at the close of business on the business day immediately
preceding the effective time of the merger, and the holders of record of shares
of Brush Wellman common stock will become holders of Brush Engineered Materials
common stock as provided in the merger agreement.
CAPITALIZATION OF BRUSH ENGINEERED MATERIALS
At the present time, Brush Engineered Materials has 60,000,000
authorized shares of common stock and 5,000,000 authorized shares of preferred
stock, 100 shares of common stock of which have been issued and are outstanding.
These outstanding shares will be canceled and extinguished in the merger so that
the only outstanding Brush Engineered Materials common stock will be those you
and other Brush Wellman shareholders receive in the merger.
The 60,000,000 shares of Brush Engineered Materials common stock
authorized represent a number of shares that is greater than that number
required in order to effect the merger, but that is the same number as
authorized for Brush Wellman common stock. The Board of Directors of Brush
Wellman believes that it is still desirable to have 60,000,000 authorized shares
of Brush Engineered Materials common stock so that shares in sufficient number
may be issued in the future without further action by shareholders (except as
may be required by applicable laws or regulatory rules) for purposes such as
future stock dividends, stock splits and similar transactions, as well as future
financings or acquisitions. Although there currently are no plans to issue such
additional shares, except under the 1995 Stock Incentive Plan, as amended, it is
possible that, from time to time, Brush Engineered Materials may consider
transactions involving the issuance or reservation of additional shares.
All Brush Engineered Materials common stock issued in the merger will
be validly issued, fully paid and nonassessable. As of March __, 2000, the
number of record holders of Brush Wellman common stock was _____.
EMPLOYEE BENEFIT PLANS
Except as described below with respect to stock benefits, all of our
employee benefit and welfare plans, such as our medical plans and pension plans,
are expected to continue substantially unchanged and benefits under these plans
are not expected to be substantially affected by the merger. We expect that
substantially all of our plans providing stock benefits will continue in effect
after the merger, adjusted to reflect Brush Engineered Materials common stock as
the stock issuable instead of Brush Wellman common stock. Brush Wellman and
Brush Engineered Materials, however, reserve the right to modify any employee
benefit or welfare plan. Some employees of Brush Wellman may become employees of
Brush Engineered Materials, and Brush Engineered Materials may become a sponsor
of some of Brush Wellman's employee benefit and welfare plans.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the merger is subject to various conditions that must
be satisfied or waived prior to the merger. These conditions include:
- receipt of the requisite approval of our shareholders;
- receipt of satisfactory opinions of counsel with respect to
various federal and Ohio income tax matters (see "Federal and
Ohio Income Tax Consequences of the Merger" on page 26);
- entitlement of no more than 10% of Brush Wellman common stock
to assert statutory dissenter's rights; and
- the shares of Brush Engineered Materials common stock having
been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
Except for the filing of a Certificate of Merger with the Secretary of
State of Ohio, no federal or state regulatory requirements must be complied with
or approvals obtained for the consummation of the merger. It is
24
<PAGE> 28
anticipated that the merger will be consummated as soon as practicable after the
conditions to the consummation of the merger are satisfied, or at such later
date as is, in the judgment of your Board of Directors, in the best interests of
the shareholders or Brush Wellman.
AMENDMENTS, DEFERRAL OR ABANDONMENT OF MERGER AGREEMENT
The merger agreement provides that Brush Engineered Materials, Brush
Merger Co. and Brush Wellman, by mutual consent of their respective Boards of
Directors, may amend, modify or supplement the merger agreement in writing,
before or after approval by you, provided that any amendment does not affect the
rights of the respective shareholders of such companies in a manner that is
materially adverse to the shareholders in the judgment of the respective Boards
of Directors. In addition, the agreement provides that, notwithstanding adoption
and approval of the agreement by you, your Board of Directors may defer
consummation of the merger or terminate the agreement or abandon the merger if
your Board of Directors determines that it would be in the best interests of the
shareholders or the company.
FACTORS AFFECTING THE CONSUMMATION OF THE REORGANIZATION
Our plans to accomplish the reorganization and the internal follow-on
reorganizations may be affected by a variety of factors. These factors include
the strength of the domestic and international markets, our financial position,
operating factors and general economic conditions. As described above, we may
defer, terminate or abandon the merger if your Board of Directors determines
that it would be in the best interests of the shareholders or the company in
light of these and other factors.
POST-REORGANIZATION BOARD OF DIRECTORS
AND MANAGEMENT OF BRUSH ENGINEERED MATERIALS
After the reorganization, the Board of Directors of Brush Engineered
Materials will consist of the same persons who are identified as current
directors or have been nominated for election as directors of Brush Wellman in
this document and will continue to be a classified board, with the terms of the
directors of Brush Engineered Materials ending at such times as they would have
ended if they had continued to serve as directors of Brush Wellman. See "1.
Election of Directors" above. The Board of Directors of Brush Engineered
Materials will have the same committees as the Board of Directors of Brush
Wellman. Following the reorganization, Brush Engineered Materials' executive
offices will be located at the same address as Brush Wellman's current executive
offices. It is anticipated that members of the committees of the Board of
Directors of Brush Engineered Materials will be as follows:
- Audit Committee -- Dr. Charles F. Brush, III, David L. Burner,
William P. Madar, William R. Robertson and John Sherwin, Jr.;
- Governance Committee -- Albert C. Bersticker, David H. Hoag,
Joseph P. Keithley and William P. Madar; and
- Organization and Compensation Committee -- Albert C.
Bersticker, Dr. Charles F. Brush, III, David L. Burner, David
H. Hoag, Joseph P. Keithley, William P. Madar, William R.
Robertson and John Sherwin, Jr.
25
<PAGE> 29
It is anticipated that, after the merger, the executive officers of
Brush Engineered Materials will be as follows:
Gordon D. Harnett Chairman, President and Chief
Executive Officer
John D. Grampa Vice President - Finance and Chief
Financial Officer
Daniel A. Skoch Vice President - Administration and
Human Resources
Michael C. Hasychak Vice President, Secretary and Treasurer
William R. Seelbach President - Alloy Products
Other senior positions within the new holding company structure will be
as follows:
John J. Pallam Vice President and General Counsel
James P. Marrotte Corporate Controller
William M. Christoff Assistant Treasurer - Taxes and
Assistant Secretary
Gary W. Schiavoni Assistant Treasurer
INITIAL FUNDING OF BRUSH ENGINEERED MATERIALS
Brush Engineered Materials is not expected to have any significant
direct expenses. Future dividends will be paid by Brush Engineered Materials
rather than Brush Wellman. Brush Engineered Materials' ability to pay future
dividends will be dependent on the ability of its various subsidiaries to make
cash distributions to Brush Engineered Materials and initially will be
substantially the same as the current capacity of Brush Wellman to pay
dividends.
FEDERAL AND OHIO INCOME TAX CONSEQUENCES OF THE MERGER
The following discussion is a summary of the material United States
federal and Ohio state income tax consequences of the merger to a shareholder
that holds shares of Brush Wellman common stock as a capital asset at the
effective time of the merger. The discussion is based on laws, regulations,
rulings and decisions in effect on the date of this document, all of which are
subject to change, possibly with retroactive effect, and to differing
interpretations. This discussion does not address all aspects of United States
federal and Ohio state taxation that may be relevant to particular shareholders
in light of their personal circumstances or to shareholders subject to special
treatment under the Internal Revenue Code, including:
- banks;
- tax-exempt entities;
- insurance companies;
- dealers in securities or foreign currency;
- shareholders who received their shares through the exercise of
employee stock options or otherwise as compensation;
- shareholders who are not United States persons; and
- shareholders who hold shares as a part of a hedge, straddle or
conversion transaction.
In addition, the discussion does not address any local or foreign tax
consequences of the merger.
26
<PAGE> 30
SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO THEM.
TAX OPINION
In the opinion of Jones, Day, Reavis & Pogue, counsel to Brush Wellman,
subject to the considerations described below under "Various Considerations with
Respect to Opinion," the merger will be a tax-free reorganization under the
Internal Revenue Code.
Completion of the merger is conditioned upon counsel to Brush Wellman
delivering a tax opinion at the time of the merger to the same effect and
subject to substantially the same considerations.
TAX CONSEQUENCES OF THE MERGER
In accordance with the conclusion of Jones, Day, Reavis & Pogue's tax
opinion that the merger will be a tax- free reorganization under the Internal
Revenue Code, and subject to the considerations described below under "Various
Considerations with Respect to Opinion," if the merger is carried out in
accordance with the terms of the agreement and if, in the merger, all of the
shares of Brush Wellman common stock that an individual shareholder owns are
converted solely into shares of Brush Engineered Materials common stock:
- no gain or loss will be recognized by a holder of Brush
Wellman common stock as a result of the merger;
- the aggregate tax basis of the shares of Brush Engineered
Materials common stock received solely in exchange for shares
of Brush Wellman common stock in the merger will be the same
as the aggregate tax basis of the shares of Brush Wellman
common stock surrendered for Brush Engineered Materials shares
in the merger; and
- the holding period for shares of Brush Engineered Materials
common stock received solely in exchange for shares of Brush
Wellman common stock in the merger will include the holding
period of the shares of Brush Wellman common stock surrendered
for Brush Engineered Materials shares in the merger.
OHIO INCOME TAX CONSEQUENCES
If all of the shares of Brush Wellman common stock that an individual
shareholder owned prior to the merger are converted solely into shares of Brush
Engineered Materials common stock in the merger, Jones, Day, Reavis & Pogue has
advised Brush Wellman that the Ohio income tax consequences of the merger to the
shareholder will be the same as the federal income tax consequences described
above.
VARIOUS CONSIDERATIONS WITH RESPECT TO OPINION
Jones, Day, Reavis & Pogue's tax opinion is subject to various
assumptions, limitations and qualifications. The opinion is based on current
laws that may change, possibly with retroactive effect. In issuing its opinion,
Jones, Day, Reavis & Pogue relied on various representations made by Brush
Wellman and its management. We refer you to the full text of the Jones, Day,
Reavis & Pogue's tax opinion. A copy of the opinion is filed as an exhibit to
Brush Engineered Materials' S-4 registration statement filed with the Securities
and Exchange Commission, of which this document forms a part. Opinions of
counsel are not binding on the Internal Revenue Service or the Ohio Department
of Taxation and do not preclude the Internal Revenue Service or the Ohio
Department of Taxation from adopting contrary positions. In addition, if any of
the representations or assumptions are inconsistent with the actual facts, the
United States federal and Ohio state income tax consequences of the merger could
be significantly and adversely affected.
EXERCISE OF STATUTORY DISSENTERS' RIGHTS
For a summary of statutory dissenter's rights, see "Dissenter's Rights"
on page 29. If instead of having shares of Brush Wellman common stock converted
in the merger into shares of Brush Engineered Materials common
27
<PAGE> 31
stock, a shareholder holding, directly and by attribution, less than 1% of the
outstanding shares of Brush Wellman common stock dissents from the merger with
respect to some or all of his common stock, any consideration the shareholder
receives from Brush Wellman in exchange for these shares will generally be
treated as proceeds from the "sale or exchange" of those shares. Any gain or
loss such shareholder realizes as a result will generally be long-term capital
gain or loss if the shareholder held the shares of Brush Wellman common stock
with respect to which the shareholder exercised statutory dissenter's rights for
more than 12 months at the effective time of the merger.
BACKUP WITHHOLDING
If a shareholder exercises statutory dissenter's rights, so that the
merger represents a taxable transaction with respect to the shareholder, the
shareholder may also be subject to backup withholding at the rate of 31% on the
amount of any cash that the shareholder receives as a result of exercising
dissenters' rights in the merger. Generally, backup withholding applies only
when a taxpayer fails to furnish a proper taxpayer identification number or
certify, under penalties of perjury, that the shareholder is not subject to
backup withholding.
FINANCIAL STATEMENTS
Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998 incorporates by reference the Consolidated Balance Sheets of us and our
subsidiaries at December 31, 1998 and 1997 and the Consolidated Statements of
Income, Consolidated Statements of Shareholders' Equity and Consolidated
Statements of Cash Flows of us and our subsidiaries for the fiscal years ended
December 31, 1998, 1997 and 1996 and the notes thereto. It also contains the
financial statement schedule for the years ended 1998, 1997 and 1996. These
financial statements, schedule and notes are incorporated in this document by
reference.
No pro forma consolidated financial statements of Brush Engineered
Materials and its subsidiaries immediately following the consummation of the
merger are included in this document because such financial statements would not
reflect a material change from our consolidated financial statements immediately
prior to the consummation of the merger.
PRICE RANGE OF BRUSH WELLMAN COMMON STOCK; DIVIDENDS
The following table sets forth the high and low sales prices for Brush
Wellman common stock as reported by the New York Stock Exchange for each
calendar quarter during 1998 and 1999 and for a portion of 2000.
<TABLE>
<CAPTION>
COMMON STOCK DIVIDENDS PAID
------------ --------------
1998 HIGH LOW PER SHARE
- ---- ---- --- ---------
<S> <C> <C> <C>
First Quarter.......................... $28.50 $22.94 $0.12
Second Quarter......................... 29.69 19.13 0.12
Third Quarter.......................... 22.75 13.81 0.12
Fourth Quarter......................... 17.49 11.94 0.12
1999
First Quarter.......................... $18.19 $13.94 $0.12
Second Quarter......................... 18.69 13.19 0.12
Third Quarter.......................... 18.25 14.69 0.12
Fourth Quarter......................... 16.81 13.13 0.12
2000
First Quarter.......................... $___.__ $___.__ $0.12
(through March _, 2000)
</TABLE>
The last reported sale price of Brush Wellman common stock as reported
by the New York Stock Exchange on January 31, 2000, the date immediately prior
to the public announcement of the proposed merger, was
28
<PAGE> 32
$16.00 per share. The last reported sale price of Brush Wellman common stock as
reported by the New York Stock Exchange on ________ ___, 2000, the most recent
practicable date prior to the printing of this document, was $_____ per share.
We expect that Brush Engineered Materials will be able initially to at
least maintain dividends at the rate presently paid by us ($0.12 per share
annual rate). The foregoing is a forward-looking statement that is subject to a
variety of factors that may materially affect actual results. Brush Engineered
Materials has not declared any cash dividends and the payment of any such
dividends will be a business decision of the Board of Directors of Brush
Engineered Materials from time to time following the merger based upon the
results of operations and financial condition of Brush Engineered Materials and
its subsidiaries (including us) and such other business considerations that the
Board of Directors of Brush Engineered Materials considers relevant.
LISTING; BRUSH ENGINEERED MATERIALS COMMON STOCK TRADING MARKET
The Brush Engineered Materials common stock will be freely
transferable. It is expected that the Brush Engineered Materials common stock
will be listed on the New York Stock Exchange. Although there can be no
assurance that the New York Stock Exchange will accept the shares for trading,
it is a condition to the merger that they be accepted.
DISSENTER'S RIGHTS
Shareholders who so desire are entitled to relief as dissenting
shareholders under Ohio Revised Code Section 1701.85. A shareholder will be
entitled to this relief, however, only if the shareholder complies strictly with
all of the procedural and other requirements of Section 1701.85. The following
summary is not a complete statement of the method of compliance with Section
1701.85 and is qualified in its entirety by reference to the copy of Section
1701.85 and Section 1701.84 (which is referenced in Section 1701.85), which
sections are attached to this document as Annex F.
A shareholder who wishes to perfect rights as a dissenting shareholder
in the event the merger is approved:
- must have been a record holder of Brush Wellman common stock
as to which that shareholder seeks relief on the record date
for the Brush Wellman annual shareholders' meeting;
- must not have voted the shareholder's shares of Brush Wellman
common stock in favor of the adoption of the merger agreement;
and
- must deliver to Brush Wellman, not later than ten days after
the annual meeting, a written demand for payment of the fair
cash value of the shares of Brush Wellman common stock as to
which that shareholder seeks relief. The written demand must
state the shareholder's name, address, number of shares of
Brush Wellman common stock as to which that shareholder seeks
relief and the amount claimed as the fair cash value of those
shares of stock.
A vote against the adoption of the merger agreement will not satisfy
the requirement of a written demand for payment. Any written demand for payment
should be mailed or delivered to:
Brush Wellman Inc.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Attn: Corporate Secretary
Because the written demand must be delivered to Brush Wellman within the ten-day
period following the annual meeting, it is recommended, although not required,
that a shareholder using the mails should use certified or registered mail,
return receipt requested, to confirm that the shareholder has made a timely
delivery. This document and accompanying notice of the annual meeting will
constitute the only notice of the adoption of the merger agreement.
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<PAGE> 33
If Brush Wellman sends the dissenting shareholder, at the address
specified in the demand, a request for the certificate(s) representing the
shareholder's shares, the dissenting shareholder must deliver the certificate(s)
to Brush Wellman within 15 days of the sending of Brush Wellman's request. Brush
Wellman may endorse the certificate(s) with a legend to the effect that the
shareholder has demanded fair cash value of the shares represented by the
certificate(s). Failure to deliver the certificate(s) within 15 days of the
request terminates the shareholder's rights as a dissenting shareholder. Brush
Wellman must notify the shareholder of its election to terminate the
shareholder's rights as a dissenting shareholder within 20 days after the lapse
of the 15 day period.
Unless the dissenting shareholder and Brush Wellman agree on the fair
cash value per share of Brush Wellman common stock, the shareholder may, within
three months after the service of the written demand by the shareholder, file a
petition in the Court of Common Pleas of Cuyahoga County, Ohio. If the court
finds that the shareholder is entitled to be paid the fair cash value of Brush
Wellman common stock, the court may appoint one or more appraisers to receive
evidence and to recommend a decision on the amount of the fair cash value. Fair
cash value:
- will be determined as of the day prior to the annual meeting;
- will be the amount a willing seller and willing buyer would
accept or pay with neither being under compulsion to sell or
buy;
- will not exceed the amount specified in the shareholder's
written demand; and
- will exclude any appreciation or depreciation in market value
resulting from the merger.
The court will make a finding as to the fair cash value of a share of Brush
Wellman common stock and render judgment against Brush Wellman for its payment
with interest at a rate and from a date the court considers equitable. The costs
of proceedings shall be assessed or apportioned as the court considers
equitable.
The rights of any dissenting shareholder will terminate if:
- the dissenting shareholder has not complied with Section
1701.85, unless Brush Wellman, by its Board of Directors,
waives such failure;
- Brush Wellman abandons or is finally enjoined or prevented
from carrying out, or the shareholders of Brush Wellman
rescind their adoption of, the merger agreement;
- the dissenting shareholder withdraws his or her written
demand, with the consent of Brush Wellman, by its Board of
Directors; or
- Brush Wellman and the dissenting shareholder have not agreed
upon the fair cash value per share of Brush Wellman common
stock and neither has timely filed or joined in a petition in
an appropriate court for a determination of the fair cash
value of Brush Wellman common stock.
For a discussion of the tax consequences to a shareholder who exercises
dissenters' rights, see "Federal and Ohio Income Tax Consequences" on page 26.
Because a proxy card that does not contain voting instructions will be
voted for adoption of the merger agreement, a shareholder who wishes to exercise
dissenters' rights must either:
- not sign and return his or her proxy card; or
- if the shareholder signs and returns the shareholder's proxy
card, check the appropriate box on the proxy card to either
vote against or to abstain from voting on the adoption of the
merger agreement.
[Under the terms of Brush Wellman Inc. Savings and Investment Plan,
participants do not have the right to instruct the Trustee to exercise
dissenters' rights with respect to the shares attributable to their accounts.]
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DESCRIPTION OF BRUSH ENGINEERED MATERIALS COMMON STOCK
Upon consummation of the merger, the outstanding shares of Brush
Wellman common stock (other than shares with respect to which the holder has
asserted statutory dissenters' rights) will be converted into outstanding shares
of Brush Engineered Materials common stock. The rights of holders of Brush
Wellman common stock are governed by Ohio law and the articles of incorporation
and the code of regulations of Brush Wellman. Following the merger, the rights
of the holders of Brush Engineered Materials common stock also will be governed
by Ohio law, and by Brush Engineered Materials' articles of incorporation and
Brush Engineered Materials' code of regulations. Copies of the Brush Engineered
Materials' articles of incorporation and code of regulations are attached hereto
as Annex B and Annex C, respectively. Brush Engineered Materials will enter into
a Rights Agreement substantially similar to Brush Wellman's existing Rights
Agreement. For your convenience, a summary of the Brush Engineered Materials
Rights Agreement is contained in Annex G.
Brush Engineered Materials' articles of incorporation differ from Brush
Wellman's articles of incorporation as a result of statutory revisions. In
particular,
- Ohio law has recently been changed to eliminate the
requirement of a "purpose" clause in a corporation's articles
of incorporation. Brush Engineered Materials' articles of
incorporation do not contain a purpose clause. Under Ohio law,
that means Brush Engineered Materials may engage in any
activity that does not require special regulatory powers;
- Ohio law has recently expanded the power of directors to fix
the terms of shares of stock from unissued classes or series
of classes. Brush Engineered Materials' articles of
incorporation permit its Board of Directors to fix all of the
terms, including voting power, of unissued shares of its
preferred stock;
- Brush Engineered Materials has more authorized shares of
common stock. See "Capitalization of Brush Engineered
Materials" on page 24.
- Brush Engineered Materials common stock has no par value; and
- Brush Engineered Materials' articles of incorporation permit
amendments to the articles of incorporation by its Board of
Directors to the extent permitted by Ohio law.
Except as otherwise described above, the Brush Engineered Materials' articles of
incorporation are identical in all material respects to Brush Wellman's articles
of incorporation.
Brush Engineered Materials' code of regulations differ from Brush
Wellman's code of regulations. In particular, Brush Engineered Materials' code
of regulations:
- contain procedures regulating director nominations and
vacancies;
- contain procedures regulating shareholder proposals and
shareholder meeting agendas;
- permit the dissemination of electronic notices to
shareholders;
- provides flexibility in scheduling annual shareholder
meetings; and
- in accordance with recent changes in Ohio law, permit the
Board of Directors to create committees of the board with as
few as one member.
Except as otherwise described above, the Brush Engineered Materials'
code of regulations are identical in all material respects to Brush Wellman's
code of regulations.
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DESCRIPTION OF THE PREFERRED STOCK
Brush Engineered Materials' articles of incorporation authorizes
5,000,000 shares of preferred stock. No shares of preferred stock are currently
issued and outstanding. The preferred stock will have voting rights only as
determined by the Board of Directors prior to issuance of any series of
preferred stock.
The Board of Directors of Brush Engineered Materials may issue one or
more series of preferred shares from time to time with such powers, preferences,
rights, qualifications, limitations and restrictions as permitted by the Brush
Engineered Materials' articles of incorporation and as the board fixes by
resolution, including:
- dividend rights;
- redemption prices and conditions;
- sinking fund provisions;
- voting rights;
- liquidation preferences; and
- conversion rights.
You will have no preemptive rights to participate in any issuance of preferred
stock.
The Board of Directors of Brush Engineered Materials believes that the
preferred stock will provide flexibility for future financings and acquisitions.
Although there currently are no plans to issue preferred stock, it is
contemplated that from time to time Brush Engineered Materials may consider
transactions involving the issuance of preferred stock. Because the Brush
Engineered Materials' articles of incorporation give the board flexibility in
determining the terms of the preferred stock, the board will be able to issue
preferred stock with terms suitable to existing market conditions at the time of
issuance or to meet the needs of a particular transaction.
Although the Board of Directors of Brush Engineered Materials has no
present intention of issuing any preferred stock, the ability of the board to
issue the preferred stock could enable the board to render more difficult or
discourage an attempt by another person or entity to obtain control of Brush
Engineered Materials. The preferred stock could be issued by the board in a
public or private sale, merger or similar transaction, increasing the number of
outstanding shares and thereby diluting the equity interest and voting power, if
the preferred stock were convertible into Brush Engineered Materials common
stock, of a party attempting to obtain control of Brush Engineered Materials.
The authorization of preferred stock is not being proposed in response to any
known effort to acquire control of Brush Engineered Materials. The Brush
Engineered Materials' articles of incorporation contain the same provisions
specifying special voting requirements for certain business combinations as do
Brush Wellman's articles of incorporation, which provisions also may have the
effect of rendering more difficult or discouraging an attempt by another person
to obtain control of Brush Engineered Materials.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Brush Engineered Materials
common stock will be National City Bank, Cleveland, Ohio which currently acts in
such capacity for us.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this proxy statement of Brush Wellman Inc., which
is referred to and made part of the prospectus and registration statement. Our
financial statements and schedule are included or incorporated by reference in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
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LEGAL MATTERS
Certain legal matters in connection with the issuance of the Brush
Engineered Materials common stock will be passed upon for us and Brush
Engineered Materials by Jones, Day, Reavis & Pogue, Cleveland, Ohio.
3. APPOINTMENT OF INDEPENDENT AUDITORS
A proposal will be presented at the annual meeting to ratify the
appointment of the firm of Ernst & Young as independent auditors to examine
Brush Wellman's and Brush Engineered Materials' books of account and other
records for the fiscal year ending December 31, 2000. Representatives of Ernst &
Young are expected to be present at the annual meeting. Its representatives will
have an opportunity to make a statement if they so desire and are expected to be
available to respond to appropriate questions. Although this ratification is not
required by law, the Board of Directors believes that you should be given this
opportunity to express your views on the subject. While not binding on the Board
of Directors, your failure to ratify the appointment of Ernst & Young as Brush
Wellman's and Brush Engineered Materials' independent auditors would be
considered by the Board of Directors in determining whether or not to continue
the engagement of Ernst & Young. Ratification requires the affirmative vote of
the majority of Brush Wellman common stock present or represented, and entitled
to vote on the matter at the annual meeting, taken together as a single class.
Unless otherwise directed, proxies in the accompanying form will be voted for
ratification of the appointment of Ernst & Young.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG AS BRUSH WELLMAN'S AND BRUSH ENGINEERED
MATERIALS' INDEPENDENT AUDITORS.
SHAREHOLDER PROPOSALS
We must receive by November ___, 2000, any proposal of a shareholder
intended to be presented at the 2001 annual meeting of Brush Engineered
Materials shareholders and to be included in our proxy, notice of meeting and
proxy statement related to the 2001 annual meeting pursuant to Rule 14a-8 under
the Exchange Act. These proposals should be submitted by certified mail, return
receipt requested. Proposals of shareholders submitted outside the processes of
Rule 14a-8 under the Exchange Act in connection with the 2001 annual meeting
must be received by us by January ___, 2001 or such proposals will be considered
untimely under Rule 14a-4(c) of the Exchange Act. Our proxy related to the 2001
annual meeting of Brush Engineered Materials will give discretionary authority
to the proxy holders to vote with respect to all proposals submitted outside the
process of Rule 14a-8 received by us after January ___, 2001.
WHERE YOU CAN FIND MORE INFORMATION
Brush Wellman files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information we file at
the Securities and Exchange Commission's public reference rooms at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the Securities and
Exchange Commission's regional offices at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of these materials may also be obtained from the Securities and
Exchange Commission at prescribed rates by writing the Public Reference Section
of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330
for further information on the public reference rooms. Our filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the Securities and Exchange Commission at
"http://www.sec.gov."
Brush Engineered Materials has filed with the Securities and Exchange
Commission an S-4 registration statement with respect to the Brush Engineered
Materials common stock to be issued to holders of Brush Wellman common stock
under the merger agreement. This document constitutes the prospectus of Brush
Engineered Materials that is filed as part of the registration statement. Other
parts of the registration statement are omitted from this document in accordance
with the rules and regulations of the Securities and Exchange Commission. Copies
of the registration statement, including exhibits, may be inspected, without
charge, at the offices of the Securities and Exchange Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies may be obtained from the
Securities and Exchange Commission at prescribed rates.
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The Securities and Exchange Commission permits us to "incorporate by
reference" information into this document, which means that we can disclose
important information to you by referring you to another document filed
separately with the Securities and Exchange Commission by Brush Wellman. The
following documents are incorporated by reference into this document:
- Brush Wellman's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
- Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended April 2, 1999;
- Brush Wellman's Proxy Statement relating to its Annual Meeting
of shareholders on May 4, 1999;
- Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended July 2, 1999; and
- Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended October 1, 1999.
WE ARE ALSO INCORPORATING BY REFERENCE ADDITIONAL DOCUMENTS THAT WE
FILE WITH THE SECURITIES AND EXCHANGE COMMISSION BETWEEN THE DATE OF THIS
DOCUMENT AND THE DATE OF THE ANNUAL MEETING.
If you are a shareholder, you can obtain any of the documents
incorporated by reference through us or the Securities and Exchange Commission.
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated an exhibit by
reference in this document. You may obtain documents incorporated by reference
in this document by requesting them in writing or by telephone from the
appropriate party at the following address or telephone number:
Brush Wellman Inc.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Tel: 216-383-6823
Attn: Corporate Secretary
IF YOU WOULD LIKE TO REQUEST DOCUMENTS FROM US, PLEASE DO SO BY APRIL
25, 2000 IN ORDER TO RECEIVE THEM BEFORE THE ANNUAL MEETING.
You should rely only on the information contained or incorporated by
reference in this document as being information authorized by us. We have not
authorized anyone to provide you with information that is different from what is
contained in this document. This document is dated March ___, 2000. You should
not assume that the information contained in this document is accurate as of any
date other than such date and neither the mailing of this document to you nor
the issuance of the Brush Engineered Materials common stock in the merger shall
create any implication to the contrary. This document does not constitute an
offer to sell or the solicitation of an offer to buy to anyone in any
jurisdiction where the solicitation or offer is not authorized or the person
making the offer or solicitation is not qualified to do so. Further, this
document does not constitute an offer or solicitation to anyone to whom it is
unlawful to make such offer or solicitation.
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OTHER MATTERS
We do not know of any matters to be brought before the meeting except
as indicated in the notice. However, if any other matters properly come before
the meeting for action, it is intended that the person authorized under
solicited proxies may vote or act thereon in accordance with his own judgment.
By order of the Board of Directors.
BRUSH WELLMAN INC.
MICHAEL C. HASYCHAK
Secretary
Cleveland, Ohio
March __, 2000
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ANNEX A
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "AGREEMENT"), dated as of __________ __,
2000, is made by and among BRUSH MERGER CO., an Ohio corporation ("MERGER CO."),
BRUSH WELLMAN INC., an Ohio corporation ("BRUSH"), and BRUSH ENGINEERED
MATERIALS INC., an Ohio corporation ("HOLDING COMPANY").
RECITALS
WHEREAS, Merger Co. is a corporation duly organized and
existing under the laws of the State of Ohio, and the authorized capital stock
of Merger Co. consists of 100 common shares, without par value, 100 shares of
which are issued and outstanding and held by Holding Company, and no shares of
which are held in Merger Co.'s treasury;
WHEREAS, Brush is a corporation duly organized and existing
under the laws of the State of Ohio, and the authorized capital stock of Brush
consists of 45,000,000 common shares, $1.00 par value (the "COMMON SHARES"),
[__________] shares of which are issued and outstanding, and [6,000,000] shares
of which are held in Brush's treasury.
WHEREAS, Holding Company is a corporation duly organized and
existing under the laws of the State of Ohio, and the authorized capital stock
of Holding Company consists of 60,000,000 common shares, without par value (the
"HOLDING COMMON SHARES"), and 5,000,000 preferred shares, without par value (the
"PREFERRED SHARES"), 100 of which Holding Common Shares have been issued.
WHEREAS, Brush and Merger Co. desire to effect a merger
whereby Merger Co. will merge with and into Brush (the "MERGER"), with Brush to
be the surviving corporation;
WHEREAS, the respective boards of directors of Merger Co.,
Holding Company and Brush have adopted resolutions approving this Agreement, the
execution and delivery of this Agreement and the transactions contemplated
hereby, and have determined that it is advisable that Merger Co. be merged with
and into Brush, pursuant to and in accordance with the applicable laws of the
State of Ohio and otherwise upon the terms and conditions set forth herein;
WHEREAS, the board of directors of Holding Company has adopted
resolutions approving the conversion of shares of Brush into Holding Common
Shares;
NOW THEREFORE, in consideration of the foregoing and the
respective covenants, agreements and conditions hereinafter contained, the
parties do hereby covenant and agree as follows:
AGREEMENTS
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2), and in accordance
with the terms and conditions of Ohio Revised Code section 1701.78, Merger Co.
shall be merged with and into Brush. At the Effective Time, the separate
corporate existence of Merger Co. shall cease, and Brush shall continue its
existence as the surviving corporation under the laws of the State of Ohio (the
"SURVIVING CORPORATION"). The name of the Surviving Corporation shall be Brush
Wellman Inc.
1.2 EFFECTIVE TIME. Upon the satisfaction of the conditions
set forth in Article VI of this Agreement, a certificate of merger shall be duly
executed by each of Merger Co. and Brush and filed with the Secretary of State
of Ohio pursuant to Ohio Revised Code section 1701.81. The Merger shall become
effective upon such filing in accordance with the provisions of Ohio Revised
Code section 1701.81 (the "EFFECTIVE TIME").
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1.3 EFFECTS OF THE MERGER. At the Effective Time of the
Merger, the effects of the Merger shall occur as provided in Ohio Revised Code
section 1701.82. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, the name, identity, existence, rights,
privileges, powers, franchises, properties and assets of Brush shall continue
unaffected and unimpaired, and the separate existence of Merger Co. shall cease
and all of the rights, privileges, powers, franchises, properties and assets of
Merger Co. shall be vested in Brush.
ARTICLE II
THE SURVIVING CORPORATION
2.1 ARTICLES OF INCORPORATION. The Third Amended and Restated
Articles of Incorporation of the Surviving Corporation, effective as of the
Effective Time, will be as set forth as EXHIBIT I; and shall be the Articles of
Incorporation of the Surviving Corporation until altered, amended or repealed in
accordance with the provisions thereof and with the Ohio Revised Code.
2.2 CODE OF REGULATIONS. The Amended and Restated Code of
Regulations of the Surviving Corporation, effective as of the Effective Time,
will be as set forth as EXHIBIT II; and shall be the Code of Regulations of the
Surviving Corporation until altered, amended or repealed in accordance with the
provisions thereof and with the Ohio Revised Code.
2.3 DIRECTORS OF SURVIVING CORPORATION. Each person who is a
director of Merger Co. immediately prior to the Effective Time shall continue to
be a director of the Surviving Corporation from and after the Effective Time
until his or her successor is duly elected or appointed, or until his or her
death, resignation or removal.
2.4 OFFICERS OF SURVIVING CORPORATION. The officers of Brush
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation from and after the Effective Time until his or her successor is duly
elected or appointed, or until his or her death, resignation or removal.
2.5 DIVIDENDS. Holding Company and Merger Co. hereby consent
to any declaration by Brush prior to the Effective Time of any cash dividends
payable to shareholders of Brush who are such as of any date prior to the
Effective Time which is selected as the record date for such cash dividend. If
the payment date for such cash dividend is prior to the Effective Time, Holding
Company and Merger Co. hereby consent to the payment by Brush of such cash
dividend. If the payment date for such cash dividend is after the Effective
Time, then Brush, as the Surviving Corporation, shall be and remain responsible
for the payment of any such cash dividend, and Holding Company shall cause
Brush, as the Surviving Corporation, to pay such cash dividend to the record
date shareholders entitled thereto.
ARTICLE III
MANNER, BASIS AND EFFECT OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. At the Effective Time:
(a) Each common share of Merger Co. issued and outstanding
prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be
converted into one common share of the Surviving Corporation.
(b) Each Common Share of Brush issued and outstanding prior to
the Effective Time shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted
into one Holding Common Share.
(c) Each Holding Common Share issued and outstanding prior to
the Effective Time shall, by virtue of the Merger and without
any action on the part of the holder thereof, be canceled and
the holder thereof shall become entitled to receipt of an
amount equal to the initial subscription price paid therefor.
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3.2 SHARE CERTIFICATES. Each share certificate, which
immediately prior to the Effective Time represented an outstanding common share
of Merger Co., shall represent a common share of the Surviving Corporation.
After the Effective Time, each share certificate representing an outstanding
Common Share shall represent the same number of Holding Common Shares. From and
after the Effective Time, the holders of certificates for Common Shares shall
cease to have any rights as shareholders of Brush (except such rights, if any,
as they may have as dissenting shareholders), and, except as aforesaid, their
sole rights shall pertain to the Holding Common Shares into which their Common
Shares shall have been converted by the Merger.
3.3 DISSENTING BRUSH SHAREHOLDERS. Each holder of one or more
Common Shares who shall have been a record holder of such shares as of the date
fixed for the determination of shareholders entitled to notice of the Annual
Meeting and who shall have delivered to Brush, not later then ten days after the
date on which the vote on this Agreement was taken at the Annual Meeting, a
written demand for payment to such holder of the fair cash value of such shares
in compliance with Ohio Revised Code section 1701.85, and whose such shares
shall not have been voted in favor of adoption of this Agreement, shall cease to
have any of the rights of a shareholder in respect of such shares except the
right to be paid the fair cash value of such shares and any other rights
bestowed under Ohio Revised Code sections 1701.84 and 1701.85. However, any such
shareholder who shall validly withdraw such shareholder's written demand for
payment of the fair cash value of such shares pursuant to Ohio Revised Code
sections 1701.84 and 1701.85 will thereupon be reinstated to all such
shareholder's rights as a shareholder in respect of such shares as of the date
of delivery of such shareholder's written demand to Brush, subject to the
provisions of Section 3.1 of this Agreement, and will be entitled to receive the
Holding Common Shares into which such shareholder's Common Shares were converted
as of the Effective Time pursuant hereto.
3.4 TRANSFERS. The stock transfer books of Brush shall be
closed at the close of business on the business day immediately preceding the
Effective Time and the holders of record of Common Shares as of the Effective
Time shall be the shareholders entitled to conversion of their Common Shares
into Holding Common Shares as provided in this Agreement. In the event of a
transfer of ownership of any such Common Shares which transfer is not registered
in the stock transfer records of Brush, the Holding Common Shares may be issued
to a transferee if the certificate representing such Common Shares is
accompanied upon surrender by all documents required to evidence and effect such
transfer and payment of any applicable stock transfer taxes.
ARTICLE IV
CERTAIN AGREEMENTS
4.1 REGISTRATION OF HOLDING COMPANY SHARES. At or prior to the
Effective Time, Holding Company shall register under the Securities Act of 1933,
as amended, the maximum number of Holding Common Shares required to be exchanged
for Common Shares pursuant to this Agreement.
[TO BE COMPLETED.] [4.2 STOCK PLANS. At or prior to the
Effective Time, Holding Company shall assume [Brush's _____________________ Plan
(the "[_____]")] and [_____________________ Plan] (together with the [___], the
"STOCK PLANS") with amendments thereto as deemed appropriate by the respective
Boards of Directors of Brush and Holding Company, including all obligations
associated with any valid options ("OPTIONS") to purchase or right to receive
under restricted stock awards Common Shares under the Stock Plans. Thereafter,
each such Option to purchase Common Shares shall be the valid and enforceable
option to purchase such number of Holding Common Shares (instead of Common
Shares) at a purchase price per Holding Common Share equal to the purchase price
per Common Share. Except as set forth above, each such Option shall be on the
same terms and conditions and have the same provisions which are contained
therein immediately prior to the Effective Time.]
4.3 ELECTION OF DIRECTORS. The sole shareholder of Holding
Company, shall, subsequent to the adoption and approval of this Agreement as
provided in Section 6.1, but prior to the Effective Time, duly convene a meeting
of the sole shareholder of Holding Company (or act by written consent of such
shareholder in lieu of a meeting) and shall take or cause to be taken all action
necessary, in accordance with the Regulations of Holding Company and the Ohio
Revised Code, to install as directors of Holding Company all persons who are
named as directors and as nominees for director of Brush in the proxy statement
used by the directors of Brush to solicit proxies for use at the 2000 Annual
Meeting of shareholders for the terms such directors are currently serving or
are nominated to serve for, as specified in such proxy statement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 MERGER CO. Merger Co. represents and warrants to Brush and
to Holding Company as follows:
(a) Merger Co. is a corporation duly formed, validly
existing and in good standing under the laws of the
State of Ohio. Merger Co. has the corporate power and
authority to execute, deliver and carry out the terms
and provisions of this Agreement and has taken all
necessary corporate action to authorize the
execution, delivery and performance of this
Agreement. Merger Co. has duly authorized, executed
and delivered this Agreement and this Agreement
constitutes the legal, valid and binding agreement of
Merger Co., enforceable in accordance with its terms.
(b) Merger Co. does not own any property or assets and
does not conduct any business.
(c) The entire authorized capital stock of Merger Co.
consists of 100 shares of common stock, with no par
value per share. As of the date of this Agreement and
as of the Effective Time, (i) 100 common shares of
Merger Co. are and will be issued and outstanding,
all of which shares are owned of record by Holding
Company, and (ii) no common shares of Merger Co. are
or will be held in treasury.
5.2 HOLDING COMPANY. Holding Company represents and warrants
to Brush and to Merger Co. as follows:
(a) Holding Company is a corporation duly organized,
validly existing and in good standing under the laws
of the State of Ohio. Holding Company has the
corporate power and authority to execute, deliver and
carry out the terms and provisions of this Agreement
and has taken all necessary corporate action to
authorize the execution, delivery and performance of
this Agreement. Holding Company has duly authorized,
executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding
agreement of Holding Company, enforceable in
accordance with its terms.
(b) Holding Company does not own any property or assets
other than the common shares of Merger Co. and does
not conduct any business.
(c) Holding Company is the sole beneficial owner of 100
common shares of Merger Co.
(d) The entire authorized capital stock of Holding
Company is 60,000,000 Holding Common Shares and
5,000,000 Preferred Shares. As of the date of this
Agreement, and as of immediately prior to the
Effective Time, (i) 100 Holding Common Shares and no
Preferred Shares are or will be outstanding and (ii)
no Holding Common Shares and no Preferred Shares are
held in treasury.
5.3 BRUSH. Brush represents and warrants to Holding Company
and to Merger Co. as follows:
Brush has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this
Agreement and has taken all necessary corporate action to
authorize the execution, delivery and performance of this
Agreement. Brush has duly authorized, executed and delivered
this Agreement and this Agreement constitutes the legal, valid
and binding agreement of Brush, enforceable in accordance with
its terms.
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ARTICLE VI
CONDITIONS TO MERGER
The consummation of the Merger is subject to the satisfaction,
in the sole judgment of the Board of Directors of Brush, of the following
conditions prior to the Effective Time:
6.1 SHAREHOLDER APPROVAL. This Agreement shall have received
the approval of a majority of the issued and outstanding Common Shares entitled
to vote.
6.2 PERFORMANCE OF AGREEMENTS. Merger Co. and Holding Company
shall have performed all their respective obligations and agreements required by
this Agreement to be performed by them at or prior to the Effective Time.
6.3 TAX MATTERS. Brush shall have received an opinion of
Jones, Day, Reavis & Pogue, satisfactory in form and substance to Brush, as to
such matters relating to the tax consequences of the transactions contemplated
by this Agreement as the Board of Directors of Brush may deem advisable
including, without limitation, an opinion of such counsel to the effect that the
Merger constitutes a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Internal Revenue Code.
6.4 OPINION OF COUNSEL. Brush shall have received an opinion
of Jones, Day, Reavis & Pogue, satisfactory in form and substance to Brush, to
the effect that:
(a) each of Merger Co. and Holding Company is a
corporation duly formed, validly existing and in good standing
under the laws of the State of Ohio;
(b) Brush is a corporation validly existing and in
good standing under the laws of the State of Ohio;
(c) this Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement or
obligation of, each of Brush, Merger Co. and Holding Company;
(d) neither the execution and delivery of this
Agreement nor the performance by Brush, Merger Co., or Holding
Company, respectively, of any of its obligations hereunder
will conflict with such company's articles of incorporation or
code of regulations;
(e) the Holding Common Shares required to be issued
and delivered by Holding Company upon the Merger are duly
authorized and will, when issued as contemplated in this
Agreement, be validly issued, fully paid and nonassessable.
6.5 DISSENTING SHARES. Brush shall not have received notice
from the holder or holders of more than 10% of the outstanding Common Shares, in
the aggregate, that such holder or holders have exercised or intend to exercise
its or their dissenters' rights under Section 1701.85 of the Ohio Revised Code
and the time for the holders of Common Shares to give such notice shall have
expired.
6.6 MISCELLANEOUS APPROVALS. Brush, Merger Co. and Holding
Company, as appropriate, shall have received all orders, consents and approvals,
governmental or otherwise, which in the opinion of Brush, are required by law or
advisable to the consummation of the Merger, except for filings in connection
with the Merger and any other documents required to be filed after the Effective
Time.
6.7 NO PROHIBITION. None of Brush, Merger Co. or Holding
Company shall be subject to any order or injunction of a court of competent
jurisdiction that prohibits the consummation of the transactions contemplated by
this Agreement or that would make the consummation of the Merger by Brush,
Merger Co. or Holding Company illegal.
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<PAGE> 44
6.8 STEPS TO EFFECT MERGER. Upon the satisfaction or waiver by
Brush of each of the conditions set forth in this Article VI, the officers of
each of Brush, Merger Co. and Holding Company shall take all steps necessary in
order to make effective the Merger as provided herein.
ARTICLE VII
MISCELLANEOUS
7.1 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
7.2 HEADINGS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement. When a
reference is made in this Agreement to a section, such reference shall be to a
section of this Agreement unless otherwise indicated.
7.3 COMPLETE AGREEMENT. This Agreement contains the complete
agreement among the parties hereto with respect to the Merger and supersedes all
prior agreements and understandings with respect to the Merger.
7.4 BINDING EFFECTS; BENEFITS. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns; provided however, that nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
7.5 GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio, without giving
effect to principles of conflicts of laws.
7.6 AMENDMENT, DEFERRAL AND ABANDONMENT. (a) The parties
hereto, by mutual consent of their respective Boards of Directors, may amend,
modify or supplement this Agreement in writing at any time prior or subsequent
to the adoption and approval of the Agreement by the shareholders of Brush and
prior to the Effective Time; PROVIDED, HOWEVER, that no such amendment,
modification or supplement shall affect the rights of the respective
shareholders of the parties hereto in a manner which is materially adverse to
such shareholders in the judgment of the respective Boards of Directors of the
parties hereto.
(b) Notwithstanding the adoption and approval of this
Agreement by the shareholders of Brush, Holding Company or Merger Co.,
consummation of the transactions provided for herein may be deferred by the
Board of Directors of Brush at any time prior to the Effective Time, if such
Board of Directors determines that such deferral would be in the best interests
of Brush or its shareholders.
(c) Notwithstanding the adoption and approval of this
Agreement by the shareholders of Brush, this Agreement may be terminated, and
the Merger and other transactions provided for herein may be abandoned, by the
Board of Directors of Brush at any time prior to the Effective Time if such
Board of Directors determines that such abandonment would be in the best
interests of Brush or its shareholders. In such event, this Agreement shall
forthwith be wholly void and of no effect and there shall be no liability with
respect to this Agreement on the part of any party hereto or any of their
respective directors, officers, employees or shareholders.
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<PAGE> 45
IN WITNESS WHEREOF, each of Merger Co., Brush and Holding
Company have caused this Agreement to be duly executed by its duly authorized
officer as of the day and year first above written.
BRUSH MERGER CO.
By:
-------------------------------------
Name:
Title:
BRUSH WELLMAN INC.
By:
-------------------------------------
Name:
Title:
BRUSH ENGINEERED MATERIALS INC.
By:
-------------------------------------
Name:
Title:
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<PAGE> 46
EXHIBIT I
---------
TO THE AGREEMENT OF MERGER
--------------------------
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BRUSH WELLMAN INC.
FIRST: The name of the corporation will be Brush Wellman Inc. (the
"Corporation").
SECOND: The place in Ohio where its principal office is to be located
is Cleveland, Cuyahoga County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in
any lawful act or activity for which corporations may be formed under Section
1701.98, inclusive, of the Ohio General Corporation Law.
FOURTH: The number of shares that the corporation is authorized to have
outstanding is 100 shares of common stock, no par value per share.
FIFTH: The Corporation will commence business without any allocation to
stated capital.
SEVENTH: The Corporation may from time to time, pursuant to
authorization by the Directors and without action by the shareholders, purchase
or otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Directors shall determine;
subject, however, to such limitation or restriction, if any, as is contained in
the express terms of any class of shares of the Corporation outstanding at the
time of the purchase or acquisition in question.
EIGHTH: Notwithstanding any provision of the Ohio General Corporation
Law now or hereafter in force requiring for any purpose the vote, consent,
waiver or release of the holders of shares entitling them to exercise
two-thirds, or any other proportion, of the voting power of the Corporation or
of any class or classes of shares thereof, such action, unless otherwise
expressly required by statute or by these Articles, may be taken by the vote,
consent, waiver or release of the holders of shares entitling them to exercise a
majority of the voting power of the Corporation or of such class or classes.
NINTH: Any and every statute of the State of Ohio hereafter enacted,
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Articles of
Incorporation of the Corporation in the office of the Secretary of State of
Ohio.
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<PAGE> 47
EXHIBIT II
----------
TO THE AGREEMENT OF MERGER
--------------------------
AMENDED AND RESTATED REGULATIONS
OF
BRUSH WELLMAN INC.
ARTICLE 1
SHAREHOLDERS' MEETINGS
SECTION 1. ANNUAL MEETING.
The annual meeting of shareholders shall be held at 11:00 a.m., or at
such other hour as may be designated in the notice of said meeting, on the first
Tuesday in May in each year, if not a legal holiday, and if a legal holiday,
then on the next day not a legal holiday, for the election of Directors and the
consideration of reports to be laid before such meeting. Upon due notice, there
may also be considered and acted upon at an annual meeting any matter which
could properly be considered and acted upon at a special meeting, in which case
and for which purpose the annual meeting shall also be considered as, and shall
be, a special meeting. When the annual meeting is not held or Directors are not
elected thereat, they may be elected at a special meeting called for that
purpose.
SECTION 2. SPECIAL MEETINGS.
Special meetings of shareholders may be called by (i) the Chairman of
the Board or the President or a Vice President, (ii) the Directors by action at
a meeting, or by a majority of the Directors acting without a meeting, or (iii)
the person or persons who hold not less than fifty percent of all shares
outstanding and entitled to be voted at said meeting.
Upon request in writing delivered either in person or by registered
mail to the President or Secretary by any person or persons entitled to call a
meeting of shareholders, such officer shall forthwith cause to be given, to the
shareholders entitled thereto, notice of a meeting to be held not less than
seven nor more than 60 days after the receipt of such request, as such officer
shall fix. If such notice is not given within 20 days after the delivery or
mailing of such request, the person or persons calling the meeting may fix the
time of the meeting and give, or cause to be given, notice in the manner
hereinafter provided.
SECTION 3. PLACE OF MEETINGS.
Any meeting of shareholders may be held either at the principal office
of the Corporation or at such other place within or without the State of Ohio as
may be designated in the notice of said meeting.
SECTION 4. NOTICE OF MEETINGS.
Not more than 60 days nor less than seven days before the date fixed
for a meeting of shareholders, whether annual or special, written notice of the
time, place and purposes of such meeting shall be given by or at the direction
of the President, a Vice President, the Secretary or an Assistant Secretary.
Such notice shall be given either by personal delivery or by mail to each
shareholder of record entitled to notice of such meeting. If such notice is
mailed, it shall be addressed to the shareholders at their respective addresses
as they appear on the records of the Corporation, and notice shall be deemed to
have been given on the day so mailed. Notice of adjournment of a meeting need
not be given if the time and place to which it is adjourned are fixed and
announced at such meeting.
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SECTION 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE.
If a record date shall not be fixed pursuant to statutory authority,
the record date for the determination of shareholders who are entitled to notice
of, or who are entitled to vote at, a meeting of shareholders, shall be the
close of business on the date next preceding the day on which notice is given,
or the close of business on the date next preceding the day on which the meeting
is held, as the case may be.
SECTION 6. INSPECTORS OF ELECTION; LIST OF SHAREHOLDERS.
Inspectors of election may be appointed to act at any meeting of
shareholders in accordance with the Ohio General Corporation Law.
At any meeting of shareholders, an alphabetically arranged list, or
classified lists, of the shareholders of record as of the applicable record date
who are entitled to vote, showing their respective addresses and the number and
classes of shares held by each, shall be produced on the request of any
shareholder.
SECTION 7. QUORUM.
To constitute a quorum at any meeting of shareholders, there shall be
present in person or by proxy shareholders of record entitled to exercise not
less than a majority of the voting power of the Corporation in respect of any
one of the purposes for which the meeting is called.
The holders of a majority of the voting power represented in person or
by proxy at a meeting of shareholders, whether or not a quorum be present, may
adjourn the meeting from time to time.
SECTION 8. VOTING.
In all cases, except as otherwise expressly required by statute, the
Articles of Incorporation of the Corporation or these Regulations, a majority of
the votes cast at a meeting of shareholders shall control. An abstention shall
not represent a vote cast.
Cumulative voting in the election of Directors shall be permitted in
accordance with the Ohio General Corporation Law.
SECTION 9. REPORTS TO SHAREHOLDERS.
At the annual meeting, or the meeting held in lieu thereof, the
officers of the Corporation shall lay before the shareholders a financial
statement as required by the Ohio General Corporation Law.
SECTION 10. ACTION WITHOUT A MEETING.
Except as otherwise provided in these Regulations, any action which may
be authorized or taken at a meeting of the shareholders may be authorized or
taken without a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all of the shareholders who would be entitled to
notice of a meeting for such purpose, which writing or writings shall be filed
with or entered upon the records of the Corporation.
SECTION 11. CHAIRMAN OF MEETING.
The chairman of any meeting of shareholders shall be the Chairman of
the Board or, if the Directors have not elected a Chairman of the Board, the
President of the Corporation. The Chairman of the Board or, if the Directors
have not elected a Chairman of the Board or the Chairman of the Board is
unavailable to do so, the President may appoint any other officer of the
Corporation to act as chairman of any shareholders' meeting. Notwithstanding the
foregoing, the Directors may appoint any individual to act as chairman of any
shareholders' meeting.
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<PAGE> 49
ARTICLE II
DIRECTORS
SECTION 1. ELECTION, NUMBER AND TERM OF OFFICE.
The Directors shall be elected at the annual meeting of shareholders,
or if not so elected, at a special meeting of shareholders called for that
purpose, and each Director shall hold office until the date fixed by these
Regulations for the next succeeding annual meeting of shareholders and until his
successor is elected, or until his earlier resignation, removal from office or
death. At any meeting of shareholders at which Directors are to be elected, only
persons nominated as candidates shall be eligible for election.
The number of Directors, which shall not be less than three (unless all
of the shares of the Corporation are owned of record by one or two shareholders,
in which case the number of Directors may be less than three but not less than
the number of shareholders), may be fixed or changed at a meeting of the
shareholders called for the purpose of electing Directors at which a quorum is
present, by the affirmative vote of the holders of a majority of the shares
represented at the meeting and entitled to vote on such proposal. In case the
shareholders at any meeting for the election of Directors shall fail to fix the
number of Directors to be elected, the number elected shall be deemed to be the
number of Directors so fixed.
SECTION 2. MEETINGS.
Regular meetings of the Directors shall be held immediately after the
annual meeting of shareholders and at such other times and places as may be
fixed by the Directors, and such meetings may be held without further notice.
Special meetings of the Directors may be called by the Chairman of the
Board or by the President or by a Vice President or by the Secretary of the
Corporation, or by not less than one-third of the Directors. Notice of the time
and place of a special meeting shall be served upon or telephoned to each
Director at least 24 hours, or mailed, telegraphed or cabled to each Director at
least 48 hours, prior to the time of the meeting.
SECTION 3. QUORUM AND VOTING.
A majority of the number of Directors then in office (but in no event
more than two) shall be necessary to constitute a quorum for the transaction of
business, but if at any meeting of the Directors there shall be less than a
quorum present, a majority of those present may adjourn the meeting from time to
time without notice other than announcement at the meeting until a quorum shall
attend. In all cases, except as otherwise expressly required by statute, the
Articles of Incorporation of the Corporation or these Regulations, the act of a
majority of the Directors present at a meeting at which a quorum is present is
the act of the Directors.
SECTION 4. ACTION WITHOUT A MEETING.
Any action which may be authorized or taken at a meeting of the
Directors may be authorized or taken without a meeting with the affirmative vote
or approval of, and in a writing or writings signed by, all of the Directors,
which writing or writings shall be filed with or entered upon the records of the
Corporation.
SECTION 5. COMMITTEES.
The Directors may from time to time create a committee or committees of
Directors to act in the intervals between meetings of the Directors and may
delegate to such committee or committees any of the authority of the Directors
other than that of filling vacancies among the Directors or in any committee of
the Directors. No committee shall consist of less than three Directors. The
Directors may appoint one or more Directors as alternate members of any such
committee, who may take the place of any absent member or members at any meeting
of such committee.
In particular, the Directors may create and define the powers and
duties of an Executive Committee. Except as above provided and except to the
extent that its powers are limited by the Directors, the Executive Committee
during the intervals between meetings of the Directors shall possess and may
exercise, subject to the control and
II-3
<PAGE> 50
direction of the Directors, all of the powers of the Directors in the management
and control of the business of the Corporation, regardless of whether such
powers are specifically conferred by these Regulations. All action taken by the
Executive Committee shall be reported to the Directors at their first meeting
thereafter.
Unless otherwise ordered by the Directors, a majority of the members of
any committee appointed by the Directors pursuant to this section shall
constitute a quorum at any meeting thereof, and the act of a majority of the
members present at a meeting at which a quorum is present shall be the act of
such committee. Action may be taken by any such committee without a meeting by a
writing or writings signed by all of its members. Any such committee shall
prescribe its own rules for calling and holding meetings and its method of
procedure, subject to any rules prescribed by the Directors, and shall keep a
written record of all action taken by it.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS.
The Corporation may have a Chairman of the Board (who shall be a
Director) and shall have a President, a Secretary and a Treasurer. The
Corporation may also have one or more Vice Presidents and such other officers
and assistant officers as the Directors may deem necessary. All of the officers
and assistant officers shall be elected by the Directors.
SECTION 2. AUTHORITY AND DUTIES OF OFFICERS.
The officers of the Corporation shall have such authority and shall
perform such duties as are customarily incident to their respective offices, or
as may be specified from time to time by the Directors, regardless of whether
such authority and duties are customarily incident to such office.
ARTICLE IV
INDEMNIFICATION AND INSURANCE
SECTION 1. INDEMNIFICATION.
The Corporation shall indemnify, to the full extent then permitted by
law, any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a member of the Board of Directors or an officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The Corporation shall
pay, to the full extent then required by law, expenses, including attorney's
fees, incurred by a member of the Board of Directors in defending any such
action, suit or proceeding as they are incurred, in advance of the final
disposition thereof, and may pay, in the same manner and to the full extent then
permitted by law, such expenses incurred by any other person. The
indemnification and payment of expenses provided hereby shall not be exclusive
of, and shall be in addition to, any other rights granted to those seeking
indemnification under any law, the Articles of Incorporation, any agreement,
vote of shareholders or disinterested members of the Board of Directors, or
otherwise, both as to action in official capacities and as to action in another
capacity while he is a member of the Board of Directors, officer, employee or
agent of the Corporation, and shall continue as to a person who has ceased to be
a member of the Board of Directors, trustee, officer, employee or agent and
shall inure to the benefit of the heirs, executors, and administrators of such a
person.
SECTION 2. INSURANCE.
The Corporation may, to the full extent then permitted by law and
authorized by the Directors, purchase and maintain insurance or furnish similar
protection, including but not limited to trust funds, letters of credit or
self-insurance, on behalf of or for any persons described in Section 1 against
any liability asserted against and incurred by any such person in any such
capacity, or arising out of his status as such, whether or not the Corporation
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<PAGE> 51
would have the power to indemnify such person against such liability. Insurance
may be purchased from or maintained with a person in which the Corporation has a
financial interest.
SECTION 3. AGREEMENTS.
The Corporation, upon approval by the Board of Directors, may enter
into agreements with any persons whom the Corporation may indemnify under these
Regulations or under law and undertake thereby to indemnify such persons and to
pay the expenses incurred by them in defending any action, suit or proceeding
against them, whether or not the Corporation would have the power under these
Regulations or law to indemnify any such person.
ARTICLE V
MISCELLANEOUS
SECTION 1. TRANSFER AND REGISTRATION OF CERTIFICATES.
The Directors shall have authority to make such rules and regulations
as they deem expedient concerning the issuance, transfer and registration of
certificates for shares and the shares represented thereby and may appoint
transfer agents and registrars thereof.
SECTION 2. SUBSTITUTED CERTIFICATES.
Any person claiming a certificate for shares to have been lost, stolen
or destroyed shall make an affidavit or affirmation of that fact, shall give the
Corporation and its registrar or registrars and its transfer agent or agents a
bond of indemnity satisfactory to the Directors or to the Executive Committee or
to the President or a Vice President and the Secretary or the Treasurer, and, if
required by the Directors or the Executive Committee or such officers, shall
advertise the same in such manner as may be required, whereupon a new
certificate may be executed and delivered of the same tenor and for the same
number of shares as the one alleged to have been lost, stolen or destroyed.
SECTION 3. VOTING OF SHARES HELD BY THE CORPORATION.
Unless otherwise ordered by the Directors, any officer or assistant
officer of the Corporation, in person or by proxy or proxies appointed by him,
shall have full power and authority on behalf of the Corporation to vote, act
and consent with respect to any shares issued by other corporations which the
Corporation may own.
SECTION 4. AMENDMENTS.
These Regulations may be amended by the affirmative vote or the written
consent of the shareholders of record entitled to exercise a majority of the
voting power on such proposal; provided, however, that if an amendment is
adopted by written consent without a meeting of the shareholders, the Secretary
shall mail a copy of such amendment to each shareholder of record who would have
been entitled to vote thereon and did not participate in the adoption thereof.
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<PAGE> 52
ANNEX B
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BRUSH ENGINEERED MATERIALS INC.
ARTICLE I
The name of the Corporation shall be Brush Engineered Materials Inc.
(the "Corporation").
ARTICLE II
The place in the State of Ohio where the Corporation's principal office
is to be located is the City of Cleveland, Cuyahoga County.
ARTICLE III
A. AUTHORIZED CAPITAL STOCK.
The total number of shares of capital stock which the Corporation shall
have authority to issue is 65,000,000, of which (a) 5,000,000 shares shall be
preferred stock, no par value ("Preferred Stock"), and (b) 60,000,000 shares
shall be common stock, no par value ("Common Stock").
B. PREFERRED STOCK.
The Board of Directors of the Corporation (the "Board") shall have
authority to issue Preferred Stock from time to time in one or more classes or
series. The express terms of shares of a different series of any particular
class shall be identical except for such variations as may be permitted by law.
Unless this provision is expressly modified by a Preferred Stock Designation (as
hereinafter defined) in accordance with then-applicable law, the holders of
Preferred Stock will be entitled to one vote on each matter submitted to a vote
at a meeting of shareholders for each share of Preferred Stock held of record by
such holder as of the record date for such meeting.
DIVISION A
SERIAL PREFERRED STOCK, SERIES A
SECTION 1. There is established hereby a series of Serial Preferred
Stock that shall be designated, "Serial Preferred Stock, Series A" (hereinafter
sometimes called this "Series" or the "Series A Preferred Shares") and that
shall have the terms set forth in this Division A.
SECTION 2. The number of shares of this Series shall be 450,000.
SECTION 3. (a) The holders of record of Series A Preferred Shares shall
be entitled to receive, when and as declared by the Board in accordance with the
terms hereof; out of funds legally available for the purpose, cumulative
quarterly dividends payable in cash on the first day of January, April, July and
October in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a Series A Preferred Share or fraction of a Series A
Preferred Share in an amount per share (rounded to the nearest cent) equal to
the lesser of (i) $1.50 or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock, or a subdivision of the outstanding Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or,
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<PAGE> 53
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any Series A Preferred Share or fraction of a Series A Preferred
Share. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series A Preferred Shares, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. No dividends shall be paid upon or declared and set apart for
any Series A Preferred Shares for any dividend period unless at the same time a
dividend for the same dividend period, ratably in proportion to the respective
annual dividend rates fixed therefor, shall be paid upon or declared and set
apart for all Serial Preferred Stock of all series then outstanding and entitled
to receive such dividend. The Board may fix a record date for the determination
of holders of Series A Preferred Shares entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 40 days prior to the date fixed for the payment thereof.
SECTION 4. (a) The Series A Preferred Shares shall be redeemable from
time to time at the option of the Board, as a whole or in part, at any time at a
redemption price per share equal to one hundred times the then applicable
Purchase Price as defined in that certain Rights Agreement, dated as of , 2000,
between the Corporation and National City Bank, N.A. (the "Rights Agreement"),
as the same may from time to time be amended in accordance with its terms, which
Purchase Price is $110 as of , 2000, subject to adjustment from time to time as
provided in the Rights Agreement (the "Series A Redemption Price"). Copies of
the Rights Agreement are available from the Company upon request. In the event
that fewer than all of the outstanding Series A Preferred Shares are to be
redeemed, the number of shares to be redeemed shall be as determined by the
Board and the shares to be redeemed shall be selected pro rata or by lot in such
manner as shall be determined by the Board.
(b) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Series A Preferred Shares to be
redeemed at their respective addresses then appearing on the books of the
Corporation, not less than 30 days nor more than 60 days prior to the date fixed
for such redemption. At any time before or after notice has been given as above
provided, the Corporation may deposit the aggregate Series A Redemption Price of
the Series A Preferred Shares to be redeemed, together with accrued and unpaid
dividends thereon to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and surplus of more than
$5,000,000, named in such notice, and direct that such deposited amount be paid
to the respective holders of the Series A Preferred Shares so to be redeemed,
upon surrender of the stock certificate or certificates held by such holders.
Upon the giving of such notice and the making of such deposit, such holders
shall cease to be shareholders with respect to such shares and shall have no
interest in or claim against the Corporation with respect to such shares except
only to receive such money from such bank or trust company without interest.
(c) Any shares of Series A Preferred Shares which are redeemed
by the Corporation pursuant to the provisions of this Section 4 shall be
cancelled and not reissued.
SECTION 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Preferred Shares, unless, prior thereto, the
holders of Series A Preferred Shares shall have received at least an amount per
share equal to one hundred times the then applicable Purchase Price as defined
in the Rights Agreement, as the same may be from time to time amended in
accordance with its terms, which Purchase Price is $110 as of , 2000, subject to
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adjustment from time to time as provided in the Rights Agreement, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
earned or declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Shares shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of Common Stock (the "Series A Liquidation Preferences").
(b) In the event, however, that the net assets of the
Corporation are not sufficient to pay in full the amount of the Series A
Liquidation Preference and the liquidation preferences of all other series of
Serial Preferred Stock, if any, which rank on a parity with the Series A
Preferred Shares as to distribution of assets in Liquidation, all shares of this
Series and of such other Serial Preferred Stock shall share ratably in the
distribution of assets (or proceeds thereof) in Liquidation in proportion to the
full amounts to which they are respectively entitled.
(c) In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event pursuant to the proviso set forth in paragraph
(a) above, shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Corporation into or
with any other corporation, or the merger of any other corporation into it, or
the sale, lease or conveyance of all or substantially all the property or
business of the Corporation, shall not be deemed to be a Liquidation for the
purposes of this Section 5.
SECTION 6. The Series A Preferred Shares shall not be convertible into
Common Stock.
ARTICLE IV
The Board shall be authorized hereby to exercise all powers now or
hereafter permitted by law providing rights to the Board to adopt amendments to
these Amended and Restated Articles of Incorporation (i) to fix or change the
express terms of any unissued or treasury shares of any class, including,
without limiting the generality of the foregoing: division of such shares into
series and the designation and authorized number of shares of each series;
voting rights of such shares; dividend or distribution rate; dates of payment of
dividends or distributions and the dates from which they are cumulative;
liquidation price; redemption rights and price; sinking fund requirements;
conversion rights; and restrictions on the issuance of shares of the same series
or any other class or series; all as may be established by resolution of the
Board from time to time (collectively with the terms of the Preferred Stock, a
"Preferred Stock Designation"), and (ii) to include within these Amended and
Restated Articles of Incorporation such additional provisions, or amendments to
any existing provisions, as may hereafter be authorized by law.
ARTICLE V
The Corporation may from time to time, pursuant to authorization by the
Board and without action by the shareholders, purchase or otherwise acquire
capital stock of the Corporation of any class or classes in such manner, upon
such terms and in such amounts as the Board shall determine; subject, however,
to such limitation or restriction, if any, as is contained in any Preferred
Stock Designation at the time of such purchase or acquisition.
ARTICLE VI
Subject to Article VII of these Amended and Restated Articles of
Incorporation and any Preferred Stock Designation, and notwithstanding any
provision of the Ohio Revised Code now or hereafter in force requiring for any
purpose the vote, consent, waiver or release of the holders of shares entitling
them to exercise two-thirds, or any other proportion, of the voting power of the
Corporation or of any class or classes of shares thereof, such action, unless
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otherwise expressly required by statute or by these Amended and Restated
Articles of Incorporation, may be taken by the vote, consent, waiver or release
of the holders of shares entitling them to exercise a majority of the voting
power of the Corporation or of such classes. For purposes of these Amended and
Restated Articles of Incorporation, "voting power of the Corporation" means the
aggregate voting power of (a) all the outstanding shares of Common Stock of the
Corporation and (b) all the outstanding shares of any class or series of capital
stock of the Corporation that has (i) rights to distributions senior to those of
the Common Stock including, without limitation, any relative, participating,
optional, or other special rights and privileges of, and any qualifications or
restrictions on, such shares and (ii) voting rights entitling such shares to
vote generally in the election of directors.
ARTICLE VII
SECTION 1. In addition to any affirmative vote required by law or these
Amended and Restated Articles of Incorporation, any Related Party Transaction
shall require the affirmative vote of not less than both a majority of the
Corporation's outstanding Voting Stock and a majority of the portion of the
Corporation's outstanding Voting Stock excluding the Voting Stock owned by the
Related Party involved in the Related Party Transaction. In the event of any
inconsistency between this Article VII and any other provision of these Amended
and Restated Articles of Incorporation, this Article VII shall govern.
SECTION 2. The provisions of Section 1 of this Article VII shall not be
applicable to Related Party Transactions in which (a) the aggregate amount of
the cash and the fair market value of consideration other than cash received per
share by holders of outstanding shares of each class or series of Voting Stock
of the Corporation who receive cash or other consideration in the Related Party
Transaction is not less than the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock dividends, and
other distributions) paid by the Related Party in acquiring any of its holdings
of each class or series of such Voting Stock and (b) the form of consideration
received by holders of shares of each class or series of such Voting Stock in
cash or the same form of the consideration used by the Related Party to acquire
the largest percentage of each class or series of such Voting Stock owned by the
Related Party.
SECTION 3. The provisions of Section 1 of this Article VII shall not be
applicable to any Related Party Transaction expressly approved by a majority
vote of the Continuing Directors of the Corporation.
SECTION 4. For the purpose of this Article VII:
(a) The term "Related Party Transaction" shall mean (i) any
merger or consolidation of the Corporation or a Subsidiary with a Related Party,
irrespective of which party, if either, is the surviving party, (ii) any sale,
purchase, lease, exchange, transfer, or other transaction (or series of
transactions) between the Corporation or a Subsidiary and a Related Party
involving the acquisition or disposition of assets for consideration of
$5,000,000 or more in value (except transactions in the ordinary course of
business), (iii) the issuance or transfer of any securities of the Corporation
or of a Subsidiary to a Related Party (other than an issuance or transfer of
securities which is effected on a pro rata basis to all shareholders of the
Corporation), (iv) any reclassification of securities of the Corporation
(including any reverse stock split) or any recapitalization or other transaction
involving the Corporation or its Subsidiaries that would have the effect of
increasing the voting power of a Related Party, except for any mandatory
redemption required by the terms of outstanding securities, and (v) the adoption
of any plan or proposal for the liquidation or dissolution of the Corporation in
favor of which a Related Party votes its Voting Stock.
(b) The term "Related Party" shall mean (i) any individual,
corporation, partnership, or other person, group or entity which, together with
its Affiliates and Associates, is the beneficial owner often percent (10%) or
more but less than ninety percent (90%) of the Voting Stock of the Corporation
or (ii) any such Affiliate or Associate.
(c) A person shall be a "beneficial owner" of any shares
of Voting Stock:
(1) Which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly; or
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(2) Which such person or any of its Affiliates or
Associates has
(i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement,
arrangement or understanding; or
(3) Which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(d) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 1 2b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on the
date of these Amended and Restated Articles of Incorporation.
(e) The term "consideration other than cash" as used in
Section 2(a) of this Article Seventh shall include, without limitation, Voting
Stock of the Corporation retained by its existing shareholders in the event of a
merger or consolidation with a Related Party in which the Corporation is the
surviving corporation.
(f) The term "Subsidiary" shall mean any Affiliate of the
Corporation more than fifty percent (50%) of the outstanding securities of which
representing the right, other than as affected by events of default, to vote for
the election of directors is owned by the Corporation or by another Subsidiary
(or both).
(g) The term "Voting Stock" shall mean all securities of the
Corporation entitled to vote generally in the election of directors.
(h) The term "Continuing Director" shall mean a director who
either (i) was a member of the Board immediately prior to the time that the
Related Party involved in a Related Party Transaction became a Related Party, or
(ii) was designated (before his or her initial election as a director) as a
Continuing Director by a majority of the then Continuing Directors.
SECTION 5. A majority of the Continuing Directors shall have the power
and duty to determine conclusively for the purposes of this Article VII, on the
basis of information known to them, (a) whether a person is a Related Party, (b)
whether a person is an Affiliate or Associate of another, (c) whether a
transaction between the Corporation or a Subsidiary and a Related Party involves
the acquisition or disposition of assets for consideration of $5,000,000 or more
in value, (d) the fair market value of consideration other than cash received by
holders of Voting Stock in a Related Party Transaction, and (e) such other
matters with respect to which a determination or interpretation is required
under this Article VII.
SECTION 6. Nothing contained in this Article VII shall be construed to
relieve any Related Party from any fiduciary or other obligation imposed by law.
SECTION 7. Notwithstanding any other provision of these Amended and
Restated Articles of Incorporation or the Amended and Restated Code of
Regulations of the Corporation or any provision of law which might otherwise
permit a lesser vote, but in addition to any affirmative vote of the holders of
any particular class or series of stock required by law, these Amended and
Restated Articles of Incorporation or the Amended and Restated Code of
Regulations of the Corporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the Corporation's Voting Stock,
voting as a single class, shall be required to alter, amend or adopt any
provision inconsistent with or repeal this Article VII.
ARTICLE VIII
Except as may be provided in any Preferred Stock Designation, no holder
of any shares of capital stock of the Corporation shall have any preemptive
right to acquire any shares of unissued capital stock of any class or series,
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now or hereafter authorized, or any treasury shares or securities convertible
into such shares or carrying a right to subscribe to or acquire such shares of
capital stock.
ARTICLE IX
Any and every statute of the State of Ohio hereafter enacted, (i)
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or (ii) whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
or (iii) whereby the authority of the directors to adopt amendments to the
articles of incorporation without shareholder approval shall be expanded, will
apply to the Corporation and will be binding not only upon the Corporation but
upon every shareholder of the Corporation to the same extent as if such statute
had been in force at the date of filing these Amended and Restated Articles of
Incorporation in the office of the Secretary of State of Ohio.
ARTICLE X
Except as may be otherwise provided in any Preferred Stock
Designation, the number of the directors of the Corporation will not be less
than 9 nor more than 18 as may be determined from time to time only (i) by a
vote of a majority of the total number of directors that the Corporation would
have if there were no vacancies on the Board, or (ii) by the affirmative vote of
the holders of at least 50% of the voting power of the Corporation, voting
together as a single class. The directors, other than those who may be expressly
elected by virtue of the terms of any Preferred Stock Designation, will be
classified with respect to the time for which they severally hold office into
three classes, as nearly equal in size as possible and consisting of not less
than three directors in each class, designated Class I, Class II and Class III.
The directors first appointed to Class I will hold office for a term expiring at
the annual meeting of shareholders to be held in 2001, the directors first
appointed to Class II will hold office for a term expiring at the annual meeting
of shareholders to be held in 2002, and the directors first appointed to Class
III will hold office for a term expiring at the annual meeting of shareholders
to be held in 2003. The members of each class will hold office until their
successors are elected. Except as may be otherwise provided in any Preferred
Stock Designation, at each annual meeting of the shareholders of the
Corporation, the successors of the class of directors whose terms expire at that
meeting shall be elected by plurality vote of all votes cast at such meeting to
hold office for a term expiring at the annual meeting of shareholders held in
the third year following the year of their election. No decrease in the number
of directors constituting the Board of Directors may shorten the term of any
incumbent director. Election of directors of the Corporation need not be by
written ballot unless requested by the presiding officer or by the holders of a
majority of the voting power of the Corporation present in person or represented
by proxy at a meeting of the shareholders at which directors are to be elected.
ARTICLE XI
These Amended and Restated Articles of Incorporation supersede the
existing Articles of Incorporation of the Corporation.
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ANNEX C
AMENDED AND RESTATED CODE OF REGULATIONS
OF
BRUSH ENGINEERED MATERIALS INC.
SHAREHOLDER MEETINGS
1. TIME AND PLACE OF MEETINGS. All meetings of the shareholders for the
election of directors or for any other purpose will be held at such time and
place, within or without the State of Ohio, as may be designated by the Board of
Directors or, in the absence of a designation by the Board of Directors, the
Chairman of the Board of Directors, if any (the "Chairman"), the President, the
Secretary or any other individual entitled to give notice pursuant to Regulation
4. The time of the meeting shall be stated in the notice of meeting. The Board
of Director may postpone and reschedule any previously scheduled annual or
special meeting of the shareholders.
2. ANNUAL MEETING. An annual meeting of the shareholders will be held
at such time and place as may be designated pursuant to Regulation 1, at which
meeting the shareholders will elect directors to succeed those directors whose
terms expire at such meeting and will transact such other business as may be
brought properly before the meeting in accordance with Regulation 9. If the
annual meeting is not held or if the number of directors elected thereat is not
sufficient to replace the directors whose terms expire at that meeting and to
fill all other vacancies, directors may be elected at a special meeting called
for the purpose of electing directors.
3. SPECIAL MEETINGS. (a) Special meetings of shareholders may be called
by the Chairman, by the President, by a Vice President, by a majority of the
Board of Directors acting with or without a meeting or by any person or persons
who hold not less than 50% of all the shares outstanding and entitled to be
voted on any proposal to be submitted at the meeting to be called. Special
meetings of the holders of shares that are entitled to call a special meeting by
virtue of any Preferred Stock Designation may call such meetings in the manner
and for the purposes provided in the applicable terms of such Preferred Stock
Designation. For purposes of this Amended and Restated Code of Regulations,
"Preferred Stock Designation" means the express terms of shares of any class or
series of capital stock of the Corporation, whether now or hereafter issued,
with rights to distributions senior to those of the Common Stock including,
without limitation, any relative, participating, optional or other special
rights and privileges of, and any qualifications or restrictions on, such
shares.
(b) Upon written request by any person or persons entitled to call a
meeting of shareholders delivered in person or by registered mail to the
President or the Secretary, such officer shall forthwith cause notice of the
meeting to be given to the shareholders entitled to notice of such meeting in
accordance with Regulation 4. If such notice shall not be given within 60 days
after the delivery or mailing of such request, the person or persons requesting
the meeting may fix the time of the meeting and give, or cause to be given,
notice in the manner provided in Regulation 4.
4. NOTICE OF MEETINGS. Written notice of every meeting of the
shareholders called in accordance with these Regulations (including any
postponed and rescheduled meeting), stating the time, place and purposes for
which the meeting is called, will be given by or at the direction of the
President, a Vice President, the Secretary or an Assistant Secretary (or in case
of their refusal to give notice by the person or persons entitled to call the
meeting under Regulation 3). Such notice will be given by personal delivery, by
mail or by electronic medium not fewer than 7 nor more than 60 calendar days
before the date of the meeting to each shareholder of record entitled to notice
of such meeting. If such notice is mailed, it shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
Corporation, and notice shall be deemed to have been given on the day so mailed.
Notice of adjournment of a meeting need not be given if the time and place to
which it is adjourned are fixed and announced at such meeting.
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5. INSPECTORS. Inspectors of election may be appointed to act at any
meeting of shareholders in accordance with Ohio law.
6. SHAREHOLDER LISTS. At any meeting of shareholders, an alphabetically
arranged list, or classified lists, of the shareholders of record as of the
applicable record date who are entitled to vote, showing their respective
addresses and the number and classes of shares held by each, shall be produced
on the request of any shareholder.
7. QUORUM. To constitute a quorum at any meeting of shareholders, there
shall be present, in person or by proxy, shareholders of record entitled to
exercise not less than a majority of the voting power of the Corporation in
respect of any one of the purposes for which the meeting is called, unless a
greater or lesser number is expressly provided for with respect to a particular
class or series of capital stock by the terms of any applicable Preferred Stock
Designation. Except as may be otherwise provided in any Preferred Stock
Designation, the holders of a majority of the voting power of the Corporation
represented in person or by proxy at a meeting of shareholders, whether or not a
quorum be present, may adjourn the meeting from time to time. For purposes of
this Amended and Restated Code of Regulations, "voting power of the Corporation"
means the aggregate voting power of (a) all the outstanding shares of Common
Stock of the Corporation and (b) all the outstanding shares of any class or
series of capital stock of the Corporation that has (i) rights to distributions
senior to those of the Common Stock including, without limitation, any relative,
participating, optional or other special rights and privileges of, and any
qualifications or restrictions on, such shares and (ii) voting rights entitling
such shares to vote generally in the election of directors.
8. VOTING. Except as otherwise expressly required by law, the Amended
and Restated Articles of Incorporation or this Amended and Restated Code of
Regulations, at any meeting of shareholders at which a quorum is present, a
majority of the votes cast, whether in person or by proxy, on any matter
properly brought before such meeting in accordance with Regulation 9 will be the
act of the shareholders. An abstention shall not represent a vote cast. Every
proxy must be duly executed and filed with the Secretary. A shareholder may
revoke any proxy that is not irrevocable by attending the meeting and voting in
person or by filing with the Secretary written notice of revocation or a later
appointment. The vote upon any question brought before a meeting of the
shareholders may be by voice vote, unless otherwise required by law, the Amended
and Restated Articles of Incorporation or this Amended and Restated Code of
Regulations or unless the presiding officer otherwise determines. Every vote
taken by written ballot will be counted by the inspectors of election, if
inspectors of election are appointed.
9. ORDER OF BUSINESS. (a) The Chairman, or such other officer of the
Corporation as is designated by a majority of the total number of directors that
the Corporation would have if there were no vacancies on the Board of Directors
(such number being referred to as the "Whole Board"), will call meetings of
shareholders to order and will act as presiding officer thereof. Unless
otherwise determined by the Board of Directors prior to the meeting, the
presiding officer of the meeting of shareholders will also determine the order
of business and have the authority in his or her sole discretion to regulate the
conduct of any such meeting, including, without limitation, (i) by imposing
restrictions on the persons (other than shareholders of the Corporation or their
duly appointed proxies) who may attend any such shareholders' meeting, (ii) by
ascertaining whether any shareholder or his proxy may be excluded from any
meeting of shareholders based upon the presiding officer's determination that
any such person has unduly disrupted or is likely to disrupt the proceedings of
the meeting and (iii) by determining the circumstances in which and time at
which any person may make a statement or ask questions at any meeting of
shareholders.
(b) At an annual meeting of the shareholders, only such business will
be conducted or considered as is properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the President, a Vice President, the Secretary or an Assistant Secretary in
accordance with Regulation 4, (ii) otherwise properly brought before the meeting
by the presiding officer or by or at the direction of a majority of the Whole
Board or (iii) otherwise properly requested to be brought before the meeting by
a shareholder of the Corporation in accordance with Regulation 9(c).
(c) For business to be properly requested by a shareholder to be
brought before an annual meeting, the shareholder must (i) be a shareholder of
the Corporation of record at the time of the giving of the notice for such
annual meeting as provided for in this Amended and Restated Code of Regulations,
(ii) be entitled to vote at such meeting and (iii) have given timely written
notice of the request to the Secretary. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Corporation not fewer than 60 nor more than 90 calendar days prior to the
annual meeting; PROVIDED, HOWEVER, that in the event public announcement of
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the date of the annual meeting is not made at least 75 calendar days prior to
the date of the annual meeting and the annual meeting is held on a date more
than ten calendar days before or after the first anniversary of the date on
which the prior year's annual meeting was held, notice by the shareholder, to be
timely, must be so received not later than the close of business on the 10th
calendar day following the day on which public announcement is first made of the
date of the annual meeting. A shareholder's notice to the Secretary must set
forth as to each matter the shareholder proposes to bring before the annual
meeting (A) a description in reasonable detail of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (B) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business and of the
beneficial owner, if other than the shareholder, on whose behalf the proposal is
made, (C) the class and number of shares of the Corporation that are owned
beneficially and of record by the shareholder proposing such business and by the
beneficial owner, if other than the shareholder, on whose behalf the proposal is
made and (D) any material interest of the shareholder proposing such business
and the beneficial owner, if other than the shareholder, on whose behalf the
proposal is made in such business. Notwithstanding the foregoing provisions of
this Amended and Restated Code of Regulations, a shareholder must also comply
with all applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder with respect to the matters
set forth in this Regulation 9(c). For purposes of this Regulation 9(c) and
Regulation 14, "public announcement" means disclosure in a press release
reported by the Dow Jones News Service, Associated Press, or comparable national
news service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, or publicly filed by the
Corporation with any national securities exchange or quotation service through
which the Corporation's stock is listed or traded, or furnished by the
Corporation to its shareholders. Nothing in this Regulation 9(c) will be deemed
to affect any rights of shareholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended.
(d) At a special meeting of shareholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the President, a Vice President, the Secretary or an Assistant Secretary (or
in case of their failure to give any required notice, the other persons entitled
to give notice) in accordance with Regulation 4 or (ii) otherwise brought before
the meeting by the presiding officer or by or at the direction of a majority of
the Whole Board.
(e) The determination of whether any business sought to be brought
before any annual or special meeting of the shareholders is properly brought
before such meeting in accordance with this Regulation 9 will be made by the
presiding officer of such meeting. If the presiding officer determines that any
business is not properly brought before such meeting, he or she will so declare
to the meeting and any such business will not be conducted or considered.
10. REPORT TO SHAREHOLDERS. At the annual meeting, or at the meeting
held in lieu thereof, the officers of the Corporation shall lay before the
shareholders a financial statement as required by statute.
11. ACTION WITHOUT A MEETING. Any action that may be authorized or
taken at a meeting of the shareholders may be authorized or taken without a
meeting in a writing or writings signed by all of the shareholders who would be
entitled to notice of a meeting for such purpose, which writing or writings
shall be filed with or entered upon the records of the Corporation.
DIRECTORS
12. FUNCTION. Except where the law, the Amended and Restated Articles
of Incorporation or this Amended and Restated Code of Regulations requires
action to be authorized or taken by the shareholders, all of the authority of
the Corporation shall be exercised by or under the direction of the Board of
Directors.
13. NUMBER, TERMS AND ELECTION OF DIRECTORS. (a) The directors of the
corporation, other than those who may be expressly elected by virtue of the
terms of any Preferred Stock Designation, shall be classified with respect to
the time for which they severally hold office into three classes. Except as may
be otherwise provided in any Preferred Stock Designation, each class will
consist of not less than three directors, unless and until the number of
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directors of any such class is changed in accordance with this Regulation 13.
The number of directors of any class will be determined from time to time by (i)
the affirmative vote of the holders of a majority of the voting power of the
Corporation, voting together as a single class, or (ii) a vote of a majority of
the Whole Board, provided that the number of directors of any class changed by a
vote of a majority of the Whole Board shall not differ by more than one from the
number of directors of such class as last fixed by the shareholders.
(b) The directors first appointed to Class I will hold office for a
term expiring at the annual meeting of shareholders to be held in 2001; the
directors first appointed to Class II will hold office for a term expiring at
the annual meeting of shareholders to be held in 2002; and the directors first
appointed to Class III will hold office for a term expiring at the annual
meeting of shareholders to be held in 2003. The members of each class will hold
office until their successors are elected. At each annual meeting beginning in
2001, directors will be elected for a term of three years from the date of their
election and until the election of their successors.
(c) At each annual meeting of the shareholders of the Corporation, the
successors to the directors whose terms expire at that meeting shall be elected
by a plurality of all the votes cast at such meeting. Cumulative voting in the
election of directors shall be permitted as provided by statute. Election of
directors of the Corporation need not be by written ballot unless requested by
the presiding officer or by the holders of a majority of the voting power of the
Corporation present in person or represented by proxy at a meeting of the
shareholders at which directors are to be elected. Directors may also be elected
by a majority of the votes cast at a special meeting called for the purpose of
electing directors or as may otherwise be provided by any Preferred Stock
Designation.
14. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as may be
otherwise provided in any Preferred Stock Designation, any vacancy (including
newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other cause) may be filled by (i) the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors, (ii) sole remaining
director or (iii) the affirmative vote of the holders of a majority of the
Voting Power of the Corporation, voting together as a single class, after a vote
to increase the number of directors at a meeting called for that purpose in
accordance with this Amended and Restated Code of Regulations. Any director
elected in accordance with this Regulation 14, any Preferred Stock Designation
or applicable statute will hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor has been elected.
15. REMOVAL. Except as may otherwise be provided by any Preferred Stock
Designation, all Directors, for whatever terms elected, shall hold office
subject to applicable statutory provisions as to the creation of vacancies and
removal. No decrease in the number of directors constituting the Board of
Directors may shorten the term of any incumbent director.
16. NOMINATIONS OF DIRECTORS; ELECTION. (a) Except as may be otherwise
provided in any Preferred Stock Designation, only persons who are nominated in
accordance with this Regulation 16 will be eligible for election at a meeting of
shareholders to be members of the Board of Directors of the Corporation.
(b) Nominations of persons for election as directors of the Corporation
may be made only at a meeting of shareholders (i) by or at the direction of the
Board of Directors or a committee thereof or (ii) by any shareholder who is a
shareholder of record at the time of giving of notice provided for in this
Regulation 16, who is entitled to vote for the election of directors at such
meeting, and who complies with the procedures set forth in this Regulation 16.
All nominations by shareholders must be made to the Secretary in proper written
form and must be timely.
(c) To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation, in the case
of a special meeting of the shareholders, at the time the meeting request is
made in accordance with Regulation 3, or, in the case of an annual meeting, not
fewer than 60 nor more than 90 calendar days prior to such annual meeting;
PROVIDED, HOWEVER, that in the event that public announcement of the date of the
annual meeting is not made at least 75 calendar days prior to the date of the
annual meeting and the annual meeting is held on a date more than one week
before or after the first anniversary of the date on which the prior year's
annual meeting was held, notice by the shareholder to be timely must be so
received not later than the close of business on the 10th calendar day following
the day on which public announcement is first made of the date of the annual
meeting.
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(d) To be in proper written form, such shareholder's notice must set
forth or include:
(i) the name and address, as they appear on the Corporation's
books, of the shareholder giving the notice and of the beneficial
owner, if any, on whose behalf the nomination is made;
(ii) a representation that the shareholder giving the notice
is a holder of record of stock of the Corporation entitled to vote at
such annual meeting and intends to appear in person or by proxy at the
annual meeting to nominate the person or persons specified in the
notice;
(iii) the class and number of shares of stock of the
Corporation owned beneficially and of record by the shareholder giving
the notice and by the beneficial owner, if any, on whose behalf the
nomination is made;
(iv) a description of all arrangements or understandings
between or among any of (A) the shareholder giving the notice, (B) the
beneficial owner on whose behalf the notice is given, (C) each nominee
and (D) any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder giving the notice;
(v) such other information regarding each nominee proposed by
the shareholder giving the notice as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and
(vi) the signed consent of each nominee to serve as a director
of the Corporation if so elected.
(e) The presiding officer of any annual meeting may, if the facts
warrant, determine that a nomination was not made in accordance with this
Regulation 16, and if he or she should so determine, he or she will so declare
to the meeting, and the defective nomination will be disregarded.
Notwithstanding the foregoing provisions of this Regulation 16, a shareholder
must also comply with all applicable requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder with respect to
the matters set forth in this Regulation 16.
17. RESIGNATION. Any director may resign at any time by giving written
notice of his resignation to the Chairman or the Secretary. Any resignation will
be effective upon actual receipt by any such person or, if later, as of the date
and time specified in such written notice.
18. REGULAR MEETINGS. Regular meetings of the Board of Directors shall
be held immediately after the annual meeting of the shareholders and at such
other time and place either within or without the State of Ohio as may from time
to time be determined by a majority of the Whole Board. Notice of regular
meetings of the Board of Directors need not be given.
19. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by the Chairman, by the President, by a Vice President, by the Secretary
or by any two directors. Notice of special meetings, stating the place, date and
hour, shall be given to each director by whom such notice is not waived. Notice
must be given either personally or by mail, telephone, telegram, telex,
facsimile or similar medium of communication not less than twenty- four hours
before the designated hour for such meeting. Special meetings of the Board of
Directors may be held at such time and place either within or without the State
of Ohio as is determined by a majority of the Whole Board or specified in the
notice of any such meeting.
20. QUORUM AND VOTE. At all meetings of the Board of Directors, a
majority of the total number of directors then in office will constitute a
quorum for the transaction of business. Except as may be otherwise provided in
any Preferred Stock Designation or by this Amended and Restated Code of
Regulations, the act of a majority of the directors present at any meeting at
which a quorum is present will be the act of the Board of Directors. If a quorum
is not present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time to another time or place,
without notice other than announcement at the meeting, until a quorum is
present.
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21. ACTION WITHOUT A MEETING. Any action that may be authorized or
taken at a meeting of the Board of Directors may be authorized or taken without
a meeting in a writing or writings signed by all the directors, which writing or
writings shall be filed with or entered upon the records of the Corporation.
22. PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT. Meetings of
the Board of Directors or of any committee of the Board of Directors may be held
through any means of communications equipment if all persons participating can
hear each other, and such participation will constitute presence in person at
such meeting.
23. COMMITTEES. The Board of Directors may from time to time create an
executive committee or any other committee or committees of directors to act in
the intervals between meetings of the Board of Directors and may delegate to
such committee or committees any of its authority other than that of filling
vacancies among the Board of Directors or in any committee of the Board of
Directors. Each committee shall consist of one or more directors. The Board of
Directors may appoint one or more directors as alternate members of any such
committee to take the place of absent committee members at meetings of such
committee. Unless otherwise ordered by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Regulation 23 shall constitute a quorum at any meeting thereof, and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Action may be taken by any such committee without
a meeting by a writing or writings signed by all of its members. Any such
committee shall prescribe its own rules for calling and holding meetings and its
method of procedure, subject to any rules prescribed by the Board of Directors,
and will keep a written record of all action taken by it.
24. COMPENSATION. The Board of Directors may establish the compensation
and expense reimbursement policies for directors in exchange for service on the
Board of Directors and on committees of the Board of Directors, for attendance
at meetings of the Board of Directors or committees of the Board of Directors,
and for other services by directors to the Corporation or any of its
subsidiaries.
25. BYLAWS. The Board of Directors may adopt Bylaws for the conduct of
its meetings and those of any committees of the Board of Directors that are not
inconsistent with the Amended and Restated Articles of Incorporation or this
Amended and Restated Code of Regulations.
OFFICERS
26. GENERALLY. The Corporation may have a Chairman, elected by the
directors from among their number, and shall have a President, who shall also be
a director, a Secretary and a Treasurer. The Corporation may also have one or
more Vice Presidents and such other officers and assistant officers as the Board
of Directors may deem appropriate. If the Board of Directors so desires, it may
elect a Chief Executive Officer to manage the affairs of the Corporation,
subject to the direction and control of the Board of Directors. All of the
officers shall be elected by the Board of Directors. Notwithstanding the
foregoing, by specific action, the Board of Directors may authorize the Chairman
or the President to appoint any person to any office other than Chairman,
President, Secretary or Treasurer. Any number of offices may be held by the same
person, and no two offices must be held by the same person. Any of the offices,
other than the office of President, Secretary and Treasurer, may be left vacant
from time to time as the Board of Directors may determine. In case of the
absence or disability of any officer of the Corporation or for any other reason
deemed sufficient by a majority of the Board of Directors, the Board of
Directors may delegate the absent or disabled officer's powers or duties to any
other officer or to any director.
27. AUTHORITY AND DUTIES OF OFFICERS. The officers of the Corporation
shall have such authority and shall perform such duties as are customarily
incident to their respective offices, or as may be specified from time to time
by the Board of Directors, regardless of whether such authority and duties are
customarily incident to such office.
28. COMPENSATION. The compensation of all officers and agents of the
Corporation who are also members of the Board of Directors of the Corporation
will be fixed by the Board of Directors or by a committee of the Board of
Directors. The Board of Directors may fix the compensation of the other officers
and agents of the Corporation, or delegate the power to fix such compensation,
to the Chief Executive Officer or any other officer of the Corporation.
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29. SUCCESSION. The officers of the Corporation will hold office until
their successors are elected pursuant to Regulation 26. Any officer may be
removed at any time by the affirmative vote of a majority of the Whole Board.
Any vacancy occurring in any office of the Corporation may be filled by the
Board of Directors or by the Chairman or President as provided in Regulation 26.
STOCK
30. TRANSFER AND REGISTRATION OF CERTIFICATES. The Board of Directors
shall have authority to make such rules and regulations as it deems expedient
concerning the issuance, transfer and registration of certificates for shares
and the shares represented thereby and may appoint transfer agents and
registrars thereof.
31. SUBSTITUTED CERTIFICATES. Any person claiming a certificate for
shares to have been lost, stolen or destroyed (i) shall make an affidavit or
affirmation of that fact, (ii) shall give the Corporation and its registrar or
registrars and its transfer agent or agents a bond of indemnity satisfactory to
the Board of Directors or a committee thereof or to the President or a Vice
President and the Secretary or the Treasurer and (iii) shall, if required by the
Board of Directors or a committee thereof or the officers named in this
Regulation 31, advertise the fact that the certificate has been lost, stolen or
destroyed, whereupon a new certificate may be executed and delivered of the same
tenor and for the same number of shares as the one alleged to have been lost,
stolen or destroyed.
32. VOTING OF SHARES HELD BY THE CORPORATION. Unless otherwise ordered
by the Board of Directors, the President, in person or by proxy or proxies
appointed by him, shall have full power and authority on behalf of the
Corporation to vote, act and consent with respect to any shares issued by other
corporations and owned by the Corporation.
33. RECORD DATES AND OWNERS. (a) In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to designate an agent to act on
behalf of the shareholders to call a special meeting of shareholders, or to take
any other collective action on behalf of the shareholders, the Board of
Directors may fix a record date, which will not be fewer than 7 nor more than 60
calendar days before the date of such meeting. If no record date is fixed by the
Board of Directors, the record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders will be the date next
preceding the day on which notice is given, or, if notice is waived, the date
next preceding the day on which the meeting is held.
(b) The Corporation will be entitled to treat the person in whose name
shares are registered on the books of the Corporation as the absolute owner
thereof, and will not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any other person, whether or not the
Corporation has knowledge or notice of the claim or interest, except as
expressly provided by applicable law.
INDEMNIFICATION AND INSURANCE
34. INDEMNIFICATION.
(a) The Corporation shall indemnify, to the full extent then permitted
by law, any director or officer or former director or officer of the Corporation
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
member of the Board of Directors or an officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The Corporation shall
pay, to the full extent then required by law, expenses, including attorney's
fees, incurred by a member of the Board of Directors in defending any such
action, suit or proceeding as they are incurred, in advance of the final
disposition thereof.
(b) To the full extent then permitted by law, the Corporation may
indemnify employees, agents and other persons and may pay expenses, including
attorney's fees, incurred by any employee, agent or other person in defending
any action, suit or proceeding as such expenses are incurred, in advance of the
final disposition thereof.
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(c) The indemnification and payment of expenses provided by this
Regulation 34 shall not be exclusive of, and shall be in addition to, any other
rights granted to any person seeking indemnification under any law, the Amended
and Restated Articles of Incorporation, any agreement, vote of shareholders or
disinterested members of the Board of Directors, or otherwise, both as to action
in official capacities and as to action in another capacity while he or she is a
member of the Board of Directors or an officer, employee or agent of the
Corporation, and shall continue as to a person who has ceased to be a member of
the Board of Directors, trustee, officer, employee or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
35. INSURANCE. The Corporation may, to the full extent then permitted
by law and authorized by the Board of Directors, purchase and maintain insurance
or furnish similar protection, including but not limited to trust funds, letters
of credit or self-insurance, on behalf of or for any persons described in
Regulation 34 against any liability asserted against and incurred by any such
person in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify such person against such
liability. Insurance may be purchased from or maintained with a person in which
the Corporation has a financial interest.
36. AGREEMENTS. The Corporation, upon approval by the Board of
Directors, may enter into agreements with any persons who the Corporation may
indemnify under this Amended and Restated Code of Regulations or under law and
may undertake thereby to indemnify such persons and to pay the expenses incurred
by them in defending any action, suit or proceeding against them, whether or not
the Corporation would have the power under law or this Amended and Restated Code
of Regulations to indemnify any such person.
GENERAL
37. FISCAL YEAR. The fiscal year of the Corporation will end on the
thirty-first day of December in each calendar year or such other date as may be
fixed from time to time by the Board of Directors.
38. SEAL. The seal of the Corporation shall be circular in form with
the name of the Corporation stamped around the margin and the word "Seal"
stamped across the center.
39. AMENDMENTS. Except as otherwise provided by law or by the Amended
and Restated Articles of Incorporation or this Amended and Restated Code of
Regulations, these Regulations or any of them may be amended in any respect or
repealed at any time by the affirmative vote of the holders of a majority of the
voting power of the Corporation, voting together as a single class.
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ANNEX D
[THE FOLLOWING ARE THE CURRENT ARTICLES OF INCORPORATION OF BRUSH WELLMAN INC.]
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BRUSH WELLMAN INC.
FIRST: The name of the Corporation shall be Brush Wellman Inc.
SECOND: The place in the State of Ohio where its principal
office is to be located is the City of Cleveland, Cuyahoga County.
THIRD: The purpose or purposes for which it is formed are:
1. To engage in, and exploit the results of; scientific
research.
2. To acquire, own, lease, work and operate mines, and to deal
in minerals, and to produce or cause to be produced products therefrom.
3. To manufacture, buy or otherwise acquire, own, mortgage,
pledge, sell, assign, lease, license, or otherwise dispose of; import, export,
trade and deal in and with goods, wares, merchandise, and personal property of
every kind and description.
4. To secure, register, purchase, lease or otherwise acquire,
hold, use, own, operate and introduce, and sell, assign, or otherwise dispose
of; any trademarks, trade names, copyrights, patents, inventions, improvements
and processes, whether used in connection with or secured under letters patent
of the United States or elsewhere, or otherwise, and to use, exercise, develop
and grant licenses in respect of; or otherwise turn to account any such
trademarks, copyrights, patents, licenses, processes and the like, or any
property or rights.
5. To acquire, own, hold, dispose of; and generally deal in
bonds, debentures, notes, stocks, mortgages, choses in action and intangible
property of every nature.
6. To purchase, lease, or otherwise acquire, own, improve,
operate, lease, mortgage, sell, or otherwise dispose of; real property, and
interests therein, and to construct, erect, equip, manufacture, occupy, conduct,
manage, repair, improve, lease, mortgage, sell, or otherwise dispose of;
fixtures, mills, residences, buildings, and structures of all kinds.
7. To carry on and transact any of the foregoing purposes as
principal, agent or broker.
8. To the same extent and as fully as natural persons might
lawfully or could do, to do all and every lawful act and thing and to enter
into, make and perform contracts of every kind, without limitation as to amount,
necessary, suitable or convenient and proper for the accomplishment of any of
the purposes or the performance of any of the objects or incidental to any of
the powers hereinbefore enumerated or which at any time shall appear conducive
or expedient for the protection or benefit of the Corporation; the enumeration
of specific powers not being a limitation or restriction in any manner of the
general powers of the Corporation.
9. To do all or any of such acts or things and exercise any of
such powers in the State of Ohio, other states, the District of Columbia, the
territories, colonies, and possessions of the United States, and in any foreign
countries, to comply with the requirements of laws of such other jurisdictions
to enable it to do business therein, and to maintain such offices, branches or
plants either within or without the State of Ohio as may be convenient.
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FOURTH: The authorized number of shares of the Corporation is
50,000,000 consisting of 5,000,000 shares of Serial Preferred Stock, without par
value, and 45,000,000 shares of Common Stock of the par value of $1 per share.
All authorized but unissued shares of Common Stock of the Corporation shall be
free from preemptive rights of shareholders to subscribe for and purchase any
part thereof, and may be disposed of by the Board of Directors of the
Corporation at any time or from time to time for such consideration not less
than the par value thereof as may be fixed by the Board of Directors.
DIVISION A
EXPRESS TERMS OF THE SERIAL PREFERRED STOCK
SECTION 1. The Serial Preferred Stock may be issued form time
to time in one or more series. All shares of Serial Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed by the Board of Directors as hereinafter provided, and each share of each
series shall be identical with all other shares of such series, except as to the
date from which dividends are cumulative. Subject to the provisions of Section 2
to 8, both inclusive, of this Division A, which provisions shall apply to all
Serial Preferred Stock, the Board of Directors hereby is authorized to cause
such shares to be issued in one or more series, and with respect to each such
series, prior to the issuance thereof, to fix:
(a) The designation of the series which may be by
distinguishing number, letter or title.
(b) The number of shares of the series, which number the Board
of Directors may (except where otherwise provided in the creation of
the series) increase or decrease (but not below the number of shares
thereof then outstanding).
(c) The annual dividend rate of the series.
(d) The dates at which dividends, if declared, shall be
payable, and the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for
shares of the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation.
(h) Whether the shares of the series shall be convertible into
Common Stock, and, if so, the conversion price or prices, any
adjustments thereof; and all other terms and conditions upon which such
conversion may be made.
(i) Restrictions (in addition to those set forth in Section
6(b) and 6(c) of this Division) on the issuance of shares of the same
series or of any other class or series.
The Board of Directors is authorized to adopt from time to
time amendments to the Articles of Incorporation fixing, with respect to each
such series, the matters described in clauses (a) to (i), both inclusive, of
this Section 1.
SECTION 2. The holders of Serial Preferred Stock of each
series, in preference to the holders of Common Stock and of any other class of
shares ranking junior to the Serial Preferred Stock, shall be entitled to
receive out of any funds legally available and when and as declared by the Board
of Directors dividends in cash at the rate for such series fixed in accordance
with the provisions of Section 1 of this Division and no more, payable quarterly
on the dates fixed for such series. Such dividends shall be cumulative, in the
case of shares of each particular series, from and after the date or dates fixed
with respect to such series. No dividends may be paid upon or declared or set
apart for any of the Serial Preferred Stock for any quarterly dividend period
unless at the same time a like proportionate dividend for the same quarterly
dividend period, ratably in proportion to the respective annual
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dividend rates fixed therefor, shall be paid upon or declared or set apart for
all Serial Preferred Stock of all series then issued and outstanding and
entitled to receive such dividend.
SECTION 3. In no event so long as any Serial Preferred Stock
shall be outstanding shall any dividends, except a dividend payable in Common
Stock or other shares ranking junior to the Serial Preferred Stock, be paid or
declared or any distribution be made except as aforesaid n the Common Stock or
any other shares ranking junior to the Serial Preferred Stock, nor shall y
Common Stock or any other shares ranking junior to the Serial Preferred Stock be
purchased, retired, or otherwise acquired by the Corporation (except out of the
proceeds of the sale of Stock or other shares ranking junior to the Serial
Preferred Stock received by the Corporation subsequent to March 31, 1968):
(a) Unless all accrued and unpaid dividends on Serial
Preferred Stock, including the full dividends for the current quarterly
dividend period, shall have been declared and paid or a sum sufficient
for payment thereof set apart; and
(b) Unless there shall be no arrearages with respect to the
redemption of Serial Preferred Stock of any series from any sinking fund
provided for shares of such series in accordance with the provisions of Section
1 of this Division.
SECTION 4. (a) Subject to the express terms of each series and
to the provisions of Section 6(b) (iii) of this Division, the Corporation may
from time to time redeem all or any part of the Serial Preferred Stock of any
series at the time outstanding (i) at the option of the Board of Directors at
the applicable redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division, or (ii) in fulfillment of the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price, fixed in accordance with the
provisions of Section 1 of this Division, together in each case with an amount
equal to all dividends accrued and unpaid thereon (whether or not such dividends
shall have been earned or declared) to the redemption date.
(b) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Serial Preferred Stock to be redeemed
at their respective addresses then appearing on the books of the Corporation,
not less than 30 days nor more than 60 days prior to the date fixed for such
redemption. At any time before or after notice has been given as above provided,
the Corporation may deposit the aggregate redemption price of the shares of
Serial Preferred Stock to be redeemed, together with accrued and unpaid
dividends thereon to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and surplus of more than
$5,000,000, named in such notice, and direct that such deposited amount be paid
to the respective holders of the shares of Serial Preferred Stock so to be
redeemed, upon surrender of the stock certificate or certificates held by such
holders. Upon the giving of such notice and the making of such deposit, such
holders shall cease to be shareholders with respect to such shares and shall
have no interest in or claim against the Corporation with respect to such shares
except only to receive such money from such bank or trust company without
interest or the right to exercise any unexpired privileges of conversion. In
case less than all of the outstanding shares of Serial Preferred Stock are to be
redeemed, the Corporation shall select pro rata or by lot the shares so to be
redeemed in such manner as shall be prescribed by its Board of Directors.
If the holders of shares of Serial Preferred Stock which shall
have been called for redemption shall not, within six years after such deposit,
claim the amount deposited for the redemption thereof; any such bank or trust
company shall, upon demand, pay over to the Corporation such unclaimed amounts
and thereupon such bank or trust company and the Corporation shall be relieved
of all responsibility in respect thereof and to such holders.
(c) Any shares of Serial Preferred Stock which are redeemed by
the Corporation pursuant to the provisions of this Section 4 and any shares of
Serial Preferred Stock which are purchased and delivered in satisfaction of any
sinking fund requirements provided for shares of such series and any shares of
Serial Preferred Stock which are converted in accordance with the express terms
thereof shall be cancelled and not reissued. Any shares of Serial Preferred
Stock otherwise acquired by the Corporation shall resume the status of
authorized and unissued shares of Serial Preferred Stock without serial
designation.
SECTION 5. (a) The holders of Serial Preferred Stock of any
series shall, in case of voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, be entitled to receive in full out
of the assets of the Corporation, including its capital, before any amount shall
be paid or distributed among the holders
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of the Common Stock or any other shares ranking junior to the Serial Preferred
Stock, the amounts fixed with respect to shares of such series in accordance
with Section 1 of this Division plus in any such event an amount equal to all
dividends accrued and unpaid thereon (whether or not such dividends shall have
been earned or declared) to the date of payment of the amount due pursuant to
such liquidation, dissolution or winding up of the affairs of the Corporation.
In case the net assets of the Corporation legally available therefor are
insufficient to permit the payment upon all outstanding shares of Serial
Preferred Stock of the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably upon outstanding
shares of Serial Preferred Stock in proportion to the full preferential amount
to which each such share is entitled.
After payment to holders of Serial Preferred Stock of the full
preferential amounts as aforesaid, holders of Serial Preferred Stock as such
have no right or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other corporation, or the merger of any other corporation into it, or
the sale, lease or conveyance of all or substantially all the property or
business of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section 5.
SECTION 6. (a) The holders of Serial Preferred Stock shall be
entitled to one vote for each share of such stock upon all matters presented to
the shareholders; and, except as otherwise provided herein or required by law,
the holders of Serial Preferred Stock and the holders of Common Stock shall vote
together as one class on all matters. No adjustment of the voting rights of the
holders of Serial Preferred Stock shall be made in the event of an increase or
decrease in the number of shares of Common Stock authorized or issued or in the
event of a stock split or combination of the Common Stock or in the event of a
stock dividend on any class of stock payable solely in Common Stock.
If, and so often as, the Corporation shall be in default in
the payment of dividends in an amount equivalent to six quarterly dividends
(whether or not consecutive) on any series of Serial Preferred Stock at the time
outstanding, whether or not earned or declared, the holders of Serial Preferred
Stock of all series, voting separately as a class and in addition to all other
rights to vote for directors, shall thereafter be entitled to elect, as herein
provided, two members of the Board of Directors of the Corporation who shall
serve, except as hereinbelow provided, until the next annual meeting of the
shareholders and until their successors have been elected and qualified:
provided, however, that the holders of shares of Serial Preferred Stock shall
not have or exercise such special class voting rights except at meetings of the
shareholders for the election of directors at which the holders of not less than
35% of the outstanding shares of Serial Preferred Stock of all series then
outstanding are present in person or by proxy; and provided further that the
special class voting rights provided for herein when the same shall have become
vested shall remain so vested until all accrued and unpaid dividends on the
Serial Preferred Stock of all series then outstanding shall have been paid,
whereupon the holders of Serial Preferred Stock shall be divested of their
special class voting rights in respect of subsequent elections of directors and
the terms of the directors elected by the holders of the Serial Preferred Stock
shall automatically terminate, subject to the revesting of such special class
voting rights in the event hereinabove specified in this paragraph.
In the event of default entitling the holders of Serial
Preferred Stock to elect two directors as above specified, a special meeting of
the shareholders for the purpose of electing such directors shall be called by
the Secretary of the Corporation upon written request of; or may be called by,
the holders of record of at least 10% of the shares of Serial Preferred Stock of
all series at the time outstanding, and notice thereof shall be given in the
same manner as that required for the annual meeting of shareholders; provided,
however, that the Corporation shall not be required, and the holders of Serial
Preferred Stock shall not be entitled, to call such special meeting if the
annual meeting of shareholders shall be held within 90 days after the date of
receipt of the foregoing written request from the holders of Serial Preferred
Stock. At any meeting at which the holders of Serial Preferred Stock shall be
entitled to elect directors, the holders of 35% of the then outstanding shares
of Serial Preferred Stock of all series, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of the holders of a majority of
such shares so present at any such meeting at which there shall be such a quorum
shall be sufficient to elect the members of the Board of Directors which the
holders of Serial Preferred Stock are entitled to elect as hereinabove provided.
If at any such meeting there shall be less than a quorum present, the holders of
a majority of the shares so present may adjourn the meeting from time to time
without notice other than announcement at the meeting until a quorum shall
attend.
The two directors who may be elected by the holders of Serial
Preferred Stock pursuant to the foregoing provisions shall be in addition to any
other directors then in office or proposed to be elected otherwise than
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pursuant to such provisions, and nothing in such provisions shall prevent any
change otherwise permitted in the total number of directors of the Corporation
or require the resignation of any director elected otherwise than pursuant to
such provisions.
(b) The affirmative vote or consent of the holders of at least
two-thirds of the shares of Serial Preferred Stock at the time outstanding,
given in person or by proxy either in writing or at a meeting called for the
purpose at which the holders of Serial Preferred Stock shall vote separately as
a class, shall be necessary to effect any one or more of the following (but so
far as the holders of Serial Preferred Stock are concerned, such action may be
effected with such vote or consent):
(i) Any amendment, alteration or repeal of any of the
provisions of the Articles of Incorporation or of the Regulations of
the Corporation which affects adversely the voting powers, right or
preferences of the holders of Serial Preferred Stock; provided,
however, that, for the purpose of this clause (i) only, neither the
amendment of the Articles of Incorporation so as to authorize or
create, or to increase the authorized or outstanding amount of; Serial
Preferred Stock or of any shares of any class ranking on a parity with
or junior to the Serial Preferred Stock, nor the amendment of the
provisions of the Regulations so as to increase the number of directors
of the Corporation, shall be deemed to affect adversely the voting
powers, rights or preferences of the holders of Serial Preferred Stock;
and provided further, that if such amendment, alteration or repeal
affects adversely the rights or preferences of one or more but not all
series of Serial Preferred Stock at the time outstanding, only the vote
or consent of the holders of at least two-thirds of the number of the
shares at the time outstanding of the series so affected shall be
required; or
(ii) The authorization or creation of; or the increase in the
authorized amount of; any shares of any class, or any security
convertible into shares of any class, ranking prior to the Serial
Preferred Stock; or
(iii) The purchase or redemption (for sinking fund purposes or
otherwise) of less than all of the Serial Preferred Stock then
outstanding except in accordance with a stock purchase offer made to
all holders of record of Serial Preferred Stock, unless all dividends
upon all Serial Preferred Stock then outstanding for all previous
quarterly dividend periods shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
(c) The affirmative vote or consent of the holders of at least
a majority of the shares of Serial Preferred Stock at the time outstanding,
given in person or by proxy in writing or at a meeting called for the purpose at
which the holders of Serial Preferred Stock shall vote separately as a class,
shall be necessary to effect any one or more of the following (but so far as the
holders of Serial Preferred Stock are concerned, such action may be effected
with such vote or consent):
(i) The consolidation of the Corporation with or its merger
into any other corporation unless the corporation resulting from such
consolidation or merger will have after such consolidation or merger no
class of shares either authorized or outstanding ranking prior to or on
a parity with the Serial Preferred Stock except the same number of
shares ranking prior to or on a parity with the Serial Preferred Stock
and having the same rights and preferences as the shares of the
Corporation authorized and outstanding immediately preceding such
consolidation or merger, and each holder of Serial Preferred Stock
immediately preceding such consolidation or merger shall receive the
same number of shares, with the same rights and preferences of the
resulting corporation; or
(ii) The authorization of any shares ranking on a parity with
the Serial Preferred Stock or an increase in the authorized number of
shares of Serial Preferred Stock; or
(iii) The sale, lease or conveyance by the Corporation of all
or substantially all of its property or business.
SECTION 7. If the shares of any series of Serial Preferred
Stock shall be convertible into Common Stock, then upon conversion of shares of
such series the stated capital of the Common Stock issued upon such conversion
shall be the aggregate par value of the shares so issued having par value, or,
in the case of Shares without par value, shall be an amount equal to the stated
capital represented by each share of Common Stock outstanding at the time of
such conversion multiplied by the number of shares of Common Stock issued upon
such conversion. The stated capital of the Corporation shall be correspondingly
increased or reduced to reflect the difference between the
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stated capital of the shares of Serial Preferred Stock so converted and the
stated capital of the Common Stock issued upon such conversion.
SECTION 8. For the purpose of this Division A:
Whenever reference is made to shares "ranking prior to the
Serial Preferred Stock", such reference shall mean and include all shares of the
Corporation in respect of which the rights of the holders thereof as to the
payment of dividends or as to distributions in the event of an involuntary
liquidation, dissolution or winding up of the Corporation are given preference
over the rights of the holders of Serial Preferred Stock; whenever reference is
made to shares "on a parity with the Serial Preferred Stock", such reference
shall mean and include all shares of the Corporation in respect of which the
rights of the holders thereof as to the payment of dividends and as to
distributions in the event of an involuntary liquidation, dissolution or winding
up of the Corporation rank on an equity (except as to the amounts fixed
therefor) with the rights of the holders of Serial Preferred Stock; and whenever
reference is made to shares "ranking junior to the Serial Preferred Stock", such
reference shall mean and include all shares of the Corporation in respect of
which the rights of the holders as to the payment of dividends and as to
distributions in the event of an involuntary liquidation, dissolution or winding
up of the Corporation are junior and subordinate to the rights of the holders of
the Serial Preferred Stock.
DIVISION A-1
SERIAL PREFERRED STOCK, SERIES A
SECTION 1. There is established hereby a series of Serial
Preferred Stock that shall be designated, "Serial Preferred Stock, Series A"
(hereinafter sometimes called this "Series" or the "Series A Preferred Shares")
and that shall have the terms set forth in this Division A-1.
SECTION 2. The number of shares of this Series shall be
450,000.
SECTION 3. (a) The holders of record of Series A Preferred
Shares shall be entitled to receive, when and as declared by the Board of
Directors in accordance with the terms hereof; out of funds legally available
for the purpose, cumulative quarterly dividends payable in cash on the first day
of January, April, July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a Series A Preferred
Share or fraction of a Series A Preferred Share in an amount per share (rounded
to the nearest cent) equal to the lesser of (i) $1.50 or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock, or a subdivision of the outstanding
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any Series A Preferred Share or fraction of a Series A Preferred Share. In
the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to
which holders of Series A Preferred Shares were entitled immediately prior to
such event under clause (ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series A Preferred Shares, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. No dividends shall be paid upon or declared and set apart for
any Series A Preferred Shares for any dividend period unless at the same time a
dividend for the same dividend period, ratably in proportion to the respective
annual dividend rates fixed therefor, shall be paid upon or
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declared and set apart for all Serial Preferred Stock of all series then
outstanding and entitled to receive such dividend. The Board of Directors may
fix a record date for the determination of holders of Series A Preferred Shares
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 40 days prior to the date fixed for the
payment thereof.
SECTION 4. Subject to the provisions of Section 6(b)(iii) of
Division A and in accordance with Section 4 of Division A, the Series A
Preferred Shares shall be redeemable from time to time at the option of the
Board of Directors of the Corporation, as a whole or in part, at any time at a
redemption price per share equal to one hundred times the then applicable
Purchase Price as defined in that certain Rights Agreement, dated as of January
27, 1998, between the Corporation and National City Bank, N.A. (the "Rights
Agreement"), as the same may from time to time be amended in accordance with its
terms, which Purchase Price is $110 as of January 27, 1998, subject to
adjustment from time to time as provided in the Rights Agreement. Copies of the
Rights Agreement are available from the Company upon request. In the event that
fewer than all of the outstanding Series A Preferred Shares are to be redeemed,
the number of shares to be redeemed shall be as determined by the Board of
Directors and the shares to be redeemed shall be selected pro rata or by lot in
such manner as shall be determined by the Board of Directors.
SECTION 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Preferred Shares, unless, prior thereto, the
holders of Series A Preferred Shares shall have received at least an amount per
share equal to one hundred times the then applicable Purchase Price as defined
in the Rights Agreement, as the same may be from time to time amended in
accordance with its terms, which Purchase Price is $110 as of January 27, 1998,
subject to adjustment from time to time as provided in the Rights Agreement,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not earned or declared, to the date of such payment, provided that
the holders of shares of Series A Preferred Shares shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of Common Stock (the "Series A Liquidation Preferences").
(b) In the event, however, that the net assets of the
Corporation are not sufficient to pay in full the amount of the Series A
Liquidation Preference and the liquidation preferences of all other series of
Serial Preferred Stock, if any, which rank on a parity with the Series A
Preferred Shares as to distribution of assets in Liquidation, all shares of this
Series and of such other Serial Preferred Stock shall share ratably in the
distribution of assets (or proceeds thereof) in Liquidation in proportion to the
full amounts to which they are respectively entitled.
(c) In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event pursuant to the proviso set forth in paragraph
(a) above, shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Corporation into or
with any other corporation, or the merger of any other corporation into it, or
the sale, lease or conveyance of all or substantially all the property or
business of the Corporation, shall not be deemed to be a Liquidation for the
purposes of this Section 5.
SECTION 6. The Series A Preferred Shares shall not be
convertible into Common Stock.
FIFTH: The Corporation may from time to time, pursuant to
authorization by the Board of Directors and without action by shareholders,
purchase or otherwise acquire shares of the Corporation of any class or classes
in such manner, upon such terms and in such amounts as the Board of Directors
shall determine.
SIXTH: Notwithstanding any provision of the Ohio Revised Code
now or hereafter in force requiring for any purpose the vote, consent, waiver or
release of the holders of shares entitling them to exercise two- thirds, or any
other proportion, of the voting power of the Corporation or of any class or
classes of shares thereof; such action, unless otherwise expressly required by
statute or by the Articles of the Corporation, may be taken by the
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vote, consent, waiver or release of the holders of shares entitling them to
exercise a majority of the voting power of the Corporation or of such class or
classes.
SEVENTH: SECTION 1. In addition to any affirmative vote
required by law or these Articles of Incorporation, any Related Party
Transaction shall require the affirmative vote of not less than both a majority
of the Corporation's outstanding Voting Stock and a majority of the portion of
the Corporation's outstanding Voting Stock excluding the Voting Stock owned by
the Related Party involved in the Related Party Transaction. In the event of any
inconsistency between this Article Seventh and any other provision of these
Articles of Incorporation, this Article Seventh shall govern.
SECTION 2. The provisions of Section 1 of this Article Seventh
shall not be applicable to Related Party Transactions in which (a) the aggregate
amount of the cash and the fair market value of consideration other than cash
received per share by holders of outstanding shares of each class or series of
Voting Stock of the Corporation who receive cash or other consideration in the
Related Party Transaction is not less than the highest per share price (with
appropriate adjustments for recapitalizations and for stock splits, stock
dividends, and other distributions) paid by the Related Party in acquiring any
of its holdings of each class or series of such Voting Stock and (b) the form of
consideration received by holders of shares of each class or series of such
Voting Stock in cash or the same form of the consideration used by the Related
Party to acquire the largest percentage of each class or series of such Voting
Stock owned by the Related Party.
SECTION 3. The provisions of Section 1 of this Article Seventh
shall not be applicable to any Related Party Transaction expressly approved by a
majority vote of the Continuing Directors of the Corporation.
SECTION 4. For the purpose of this Article Seventh:
(a) The term "Related Party Transaction" shall mean (i) any
merger or consolidation of the Corporation or a Subsidiary with a
Related Party, irrespective of which party, if either, is the surviving
party, (ii) any sale, purchase, lease, exchange, transfer, or other
transaction (or series of transactions) between the Corporation or a
Subsidiary and a Related Party involving the acquisition or disposition
of assets for consideration of $5,000,000 or more in value (except
transactions in the ordinary course of business), (iii) the issuance or
transfer of any securities of the Corporation or of a Subsidiary to a
Related Party (other than an issuance or transfer of securities which
is effected on a pro rata basis to all shareholders of the
Corporation), (iv) any reclassification of securities of the
Corporation (including any reverse stock split) or any recapitalization
or other transaction involving the Corporation or its Subsidiaries that
would have the effect of increasing the voting power of a Related
Party, except for any mandatory redemption required by the terms of
outstanding securities, and (v) the adoption of any plan or proposal
for the liquidation or dissolution of the Corporation in favor of which
a Related Party votes its Voting Stock.
(b) The term "Related Party" shall mean (i) any individual,
corporation, partnership, or other person, group or entity which,
together with its Affiliates and Associates, is the beneficial owner
often percent (10%) or more but less than ninety percent (90%) of the
Voting Stock of the Corporation or (ii) any such Affiliate or
Associate.
(c) A person shall be a "beneficial owner" of any shares of
Voting Stock:
(1) Which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly; or
(2) Which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding; or
(3) Which are beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of Voting Stock.
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(d) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 1 2b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on April 22, 1986.
(e) The term "consideration other than cash" as used in
Section 2(a) of this Article Seventh shall include, without limitation,
Voting Stock of the Corporation retained by its existing shareholders
in the event of a merger or consolidation with a Related Party in which
the Corporation is the surviving corporation.
(f) The term "Subsidiary" shall mean any Affiliate of the
Corporation more than fifty percent (50%) of the outstanding securities
of which representing the right, other than as affected by events of
default, to vote for the election of directors is owned by the
Corporation or by another Subsidiary (or both).
(g) The term "Voting Stock" shall mean all securities of the
Corporation entitled to vote generally in the election of directors.
(h) The term "Continuing Director" shall mean a director who
either (i) was a member of the Board of Directors of the Corporation
immediately prior to the time that the Related Party involved in a
Related Party Transaction became a Related Party, or (ii) was
designated (before his or her initial election as a director) as a
Continuing Director by a majority of the then Continuing Directors.
SECTION 5. A majority of the Continuing Directors shall have
the power and duty to determine conclusively for the purposes of this Article
Seventh, on the basis of information known to them, (a) whether a person is a
Related Party, (b) whether a person is an Affiliate or Associate of another, (c)
whether a transaction between the Corporation or a Subsidiary and a Related
Party involves the acquisition or disposition of assets for consideration of
$5,000,000 or more in value, (d) the fair market value of consideration other
than cash received by holders of Voting Stock in a Related Party Transaction,
and (e) such other matters with respect to which a determination or
interpretation is required under this Article Seventh.
SECTION 6. Nothing contained in this Article Seventh shall be
construed to relieve any Related Party from any fiduciary or other obligation
imposed by law.
SECTION 7. Notwithstanding any other provision of these
Articles of Incorporation or the Regulations of the Corporation or any provision
of law which might otherwise permit a lesser vote, but in addition to any
affirmative vote of the holders of any particular class or series of stock
required by law, these Articles of Incorporation or the Regulations of the
Corporation, the affirmative vote of the holders of at least sixty-six and two-
thirds percent (66-2/3%) of the Corporation's Voting Stock, voting as a single
class, shall be required to alter, amend or adopt any provision inconsistent
with or repeal this Article Seventh.
EIGHTH: These Second Amended and Restated Articles of
Incorporation supersede and take the place of the heretofore existing Amended
Articles of Incorporation of the Corporation and all amendments thereto.
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ANNEX E
[THE FOLLOWING IS THE CURRENT CODE OF REGULATIONS OF BRUSH WELLMAN INC.]
REGULATIONS
OF
BRUSH WELLMAN INC.
ARTICLE I
SHAREHOLDERS' MEETINGS
SECTION 1. ANNUAL MEETING
The annual meeting of shareholders for the election of
Directors, the consideration of reports laid before the meeting and the
consideration of such other business as may come before the meeting shall be
held on the first Tuesday in May in each year, if not a legal holiday, and if a
legal holiday, then on the next day not a legal holiday, or on such other date
as may from time to time be fixed by the Directors. Upon due notice, there may
also be considered and acted upon at an annual meeting any matter which could
properly be considered and acted upon at a special meeting, in which case and
for which purpose the annual meeting shall also be considered as, and shall be,
a special meeting. When the annual meeting is not held or Directors are not
elected thereat, they may be elected at a special meeting called for that
purpose.
SECTION 2. SPECIAL MEETINGS
Special meetings of shareholders may be called at any time by
the Chairman of the Board, or the President or a Vice President or by the
Directors by action at a meeting, or by a majority of the Directors acting
without a meeting, or by the person or persons who hold not less than fifty per
cent of all shares outstanding and entitled to be voted on any proposal to be
submitted at said meeting.
Upon request in writing delivered either in person or by
registered mail to the President or Secretary by any person or persons entitled
to call a meeting of shareholders, such officer shall forthwith cause to be
given, to the shareholders entitled thereto, notice of a meeting to be held not
less than seven nor more than sixty days after the receipt of such request, as
such officer shall fix. If such notice is not given within twenty days after the
delivery or mailing of such request, the person or persons calling the meeting
may fix the time of meeting and give, or cause to be given, notice in the manner
hereinafter provided.
SECTION 3. PLACE OF MEETINGS
Any meeting of shareholders may be held either at the
principal office of the Corporation or at such place within or without the State
of Ohio, but within the United States of America, as may be designated in the
notice of said meeting.
SECTION 4. NOTICE OF MEETINGS
Not more than sixty days nor less than seven days before the
date fixed for a meeting of shareholders, whether annual or special, written
notice of the time, place and purposes of such meeting shall be given by or at
the direction of the President, a Vice President, the Secretary or an Assistant
Secretary. Such notice shall be given either by personal delivery or by mail to
each shareholder of record entitled to notice of such meeting. If such notice is
mailed, it shall be addressed to the shareholders at their respective addresses
as they appear on the records of the Corporation, and notice shall be deemed to
have been given on the day so mailed. Notice of adjournment of a meeting need
not be given if the time and place to which it is adjourned are fixed and
announced at such meeting.
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SECTION 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE
If a record date shall not be fixed pursuant to statutory
authority, the record date for the determination of shareholders who are
entitled to notice of, or who are entitled to vote at, a meeting of
shareholders, shall be the close of business on the date next preceding the day
on which notice is given, or the close of business on the date next preceding
the day on which the meeting is held, as the case may be.
SECTION 6. INSPECTORS OF ELECTION - LIST OF SHAREHOLDERS
Inspectors of Election may be appointed to act at any meeting
of shareholders in accordance with statute.
At any meeting of shareholders, an alphabetically arranged
list, or classified lists, of the shareholders of record as of the applicable
record date who are entitled to vote, showing their respective addresses and the
number and classes of shares held by each, shall be produced on the request of
any shareholder.
SECTION 7. QUORUM
To constitute a quorum at any meeting of shareholders there
shall be present in person or by proxy shareholders of record entitled to
exercise not less than a majority of the voting power of the Corporation in
respect of any one of the purposes for which the meeting is called.
The shareholders present in person or by proxy, whether or not
a quorum be present, may adjourn the meeting from time to time.
SECTION 8. VOTING
In all cases, except where otherwise by statute or the
Articles or the Regulations provided, a majority of the votes cast shall
control.
Cumulative voting in the election of Directors shall be
permitted as provided by statute.
SECTION 9. REPORTS TO SHAREHOLDERS
At the annual meeting, or the meeting held in lieu thereof,
the officers of the Corporation shall lay before the shareholders a financial
statement as required by statute.
SECTION 10. ACTION WITHOUT A MEETING
Any action which may be authorized or taken at a meeting of
the shareholders may be authorized or taken without a meeting in a writing or
writings signed by all of the shareholders who would be entitled to notice of a
meeting for such purpose, which writing or writings shall be filed with or
entered upon the records of the Corporation.
ARTICLE II
DIRECTORS
SECTION 1. ELECTION, NUMBER AND TERM OF OFFICE
The Directors shall be elected at the annual meeting of
shareholders, or, if not so elected, at a special meeting of shareholders called
for that purpose. At any meeting of shareholders at which Directors are to be
elected, only persons nominated as candidates shall be eligible for election.
The Directors shall be divided into three classes, each class
to consist of four Directors unless and until the number of Directors of any
such class is changed by the shareholders or Directors as herein provided. The
number of Directors of any class may be changed to any number not less than
three (i) by the shareholders at a meeting called for the purpose of electing
Directors, by the affirmative vote of the shareholders of record entitled to
exercise a majority of the voting power for such purpose, or (ii) by the
Directors at a meeting or by action without a
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meeting, provided, that the number of Directors of each class so changed by the
Directors shall not differ by more than one from the number of Directors of such
class as last fixed by the shareholders. Any such change in the number of
Directors pursuant to the provisions of this Section (i) shall remain in effect
until changed by vote of the shareholders or Directors in accordance with this
Section, and (ii) shall be in such class or classes as the shareholders or
Directors making such change determine. In the event that the Directors increase
the number of Directors, the Directors who are in office may fill any vacancy
created thereby. Any decrease in the number of Directors to less than the number
of Directors then in office by action of the shareholders or Directors pursuant
to the provisions of this Section shall not of itself have the effect of
removing any incumbent Director or of reducing the term of any incumbent
Director and shall only become effective as the resignation, removal from
office, death or expiration of the term of any incumbent Director occurs. A
separate election shall be held for each class of Directors as hereinafter in
this paragraph provided. Directors elected at the first election for the first
class shall hold office for the term of one year from the date of their election
and until the election of their successors, Directors elected at the first
election for the second class shall hold office for the term of two years from
the date of their election and until the election of their successors, and
Directors elected at the first election for the third class shall hold office
for the term of three years from the date of their election and until the
election of their successors. At each annual election the successors to the
Directors of each class whose term shall expire in that year shall be elected to
hold office for the term of three years from the date of their election and
until the election of their successors. In case of any increase in the number of
Directors of any class, any additional Directors elected to such class shall
hold office for a term which shall coincide with the term of such class. All
Directors, for whatever terms elected, shall hold office subject to applicable
statutory provisions as to the creation of vacancies and removal.
SECTION 2. MEETINGS
Regular meetings of the Directors shall be held immediately
after the annual meeting of shareholders and at such other times and places as
may be fixed by the Directors, and such meetings may be held without further
notice.
Special meetings of the Directors may be called by the
Chairman of the Board or by the President or by a Vice President or by the
Secretary of the Corporation, or by any two Directors. Notice of the time and
place of a special meeting shall be served upon or telephoned to each Director
at least twenty-four hours, or mailed, telegraphed or cabled to each Director at
least forty-eight hours, prior to the time of the meeting.
SECTION 3. QUORUM
A majority of the number of Directors then in office shall be
necessary to constitute a quorum for the transaction of business, but if at any
meeting of the Directors there shall be less than a quorum present, a majority
of those present may adjourn the meeting from time to time without notice other
than announcement at the meeting until a quorum shall attend.
SECTION 4. ACTION WITHOUT A MEETING
Any action which may be authorized or taken at a meeting of
the Directors may be authorized or taken without a meeting in a writing or
writings signed by all the Directors, which writing or writings shall be filed
with or entered upon the records of the Corporation.
SECTION 5. COMMITTEES
The Directors may from time to time create an executive
committee or any other committee or committees of Directors to act in the
intervals between meetings of the Directors and may delegate to such committee
or committees any of the authority of the Directors other than that of filling
vacancies among the Directors or in any committee of the Directors. No committee
shall consist of less than three Directors. The Directors may appoint one or
more Directors as alternate members of any such committee, who may take the
place of any absent member or members at a meeting of such committee.
Unless otherwise ordered by the Directors, a majority of the
members of any committee appointed by the Directors pursuant to this section
shall constitute a quorum at any meeting thereof, and the act of a majority of
the members present at a meeting at which a quorum is present shall be the act
of such committee. Action may be taken by any such committee without a meeting
by a writing or writings signed by all of its members. Any such
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committee shall prescribe its own rules for calling and holding meetings and its
method of procedure, subject to any rules prescribed by the Directors, and shall
keep a written record of all action taken by it.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS
The Corporation may have a Chairman of the Board and shall
have a President (both of whom shall be Directors), a Secretary and a Treasurer.
The Corporation may also have one or more Vice Presidents and such other
officers and assistant officers as the Directors may deem necessary. All of the
officers and assistant officers shall be elected by the Directors.
SECTION 2. AUTHORITY AND DUTIES OF OFFICERS
The officers of the Corporation shall have such authority and
shall perform such duties as are customarily incident to their respective
offices, or as may be specified from time to time by the Directors regardless of
whether such authority and duties are customarily incident to such office.
ARTICLE IV
INDEMNIFICATION
The Corporation shall indemnify:
(a) each Director or officer of the Corporation who is elected
by the Board of Directors (an "officer"),
(b) each former Director or officer of the Corporation,
(c) each such Director or officer of the Corporation who is
serving or has served at the request of the Corporation as a director,
trustee or officer of another corporation, domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust or other
enterprise, and
(d) the heirs, executors and administrators of each such
Director or officer of the Corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him (by reason of the fact
that he is serving or has served in one or more of the foregoing capacities or
by reason of any action alleged to have been taken or omitted in any of the
foregoing capacities) in connection with any threatened, pending or completed
action, suit or proceeding (including any appeals), whether civil, criminal,
administrative or investigative to the full extent permitted by applicable law.
The indemnification provided for herein shall not be deemed to restrict the
right of the Corporation:
(i) to indemnify employees, agents and others to the extent
not prohibited by applicable law,
(ii) to purchase and maintain insurance or furnish similar
protection on behalf of or for
(A) any person who is or was a Director, officer,
employee or agent of the Corporation,
(B) any person who is serving or has served at the
request of the Corporation as a director, trustee, officer, employee or
agent of another corporation, domestic or foreign, nonprofit or for
profit, partnership, joint venture, trust or other enterprise, and
(C) the heirs, executors and administrators of any
of the foregoing
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against any liability asserted against him or incurred by him in any such
capacity or arising out of his status as such (or by reason of action alleged to
have been taken or omitted in any such capacity), and
(iii) to enter into agreements with persons of the class
identified in clause (ii) above indemnifying them against any and all
liabilities (or such lesser indemnification as may be provided in such
agreements) asserted against or incurred by them in such capacities.
ARTICLE V
MISCELLANEOUS
SECTION 1. TRANSFER AND REGISTRATION OF CERTIFICATES
The Directors shall have authority to make such rules and
regulations as they deem expedient concerning the issuance, transfer and
registration of certificates for shares and the shares represented thereby and
may appoint transfer agents and registrars thereof.
SECTION 2. SUBSTITUTED CERTIFICATES
Any person claiming a certificate for shares to have been
lost, stolen or destroyed shall make an affidavit or affirmation of that fact,
shall give the Corporation and its registrar or registrars and its transfer
agent or agents a bond of indemnity satisfactory to the Directors or to the
Executive Committee or to the President or a Vice President and the Secretary or
the Treasurer, and, if required by the Directors or the Executive Committee or
such officers, shall advertise the same in such manner as may be required,
whereupon a new certificate may be executed and delivered of the same tenor and
for the same number of shares as the one alleged to have been lost, stolen or
destroyed.
SECTION 3. VOTING UPON SHARES HELD BY THE CORPORATION
Unless otherwise ordered by the Directors, the President in
person or by proxy or proxies appointed by him shall have full power and
authority on behalf of the Corporation to vote, act and consent with respect to
any shares issued by other corporations which the Corporation may own.
SECTION 4. CORPORATE SEAL
The seal of the Corporation shall be circular in form with the
name of the Corporation stamped around the margin and the word "Seal" stamped
across the center.
SECTION 5. ARTICLES TO GOVERN
In case any provision of these Regulations shall be
inconsistent with the Articles, the Articles shall govern.
SECTION 6. AMENDMENTS
These Regulations may be amended by the affirmative vote or
the written consent of the shareholders of record entitled to exercise a
majority of the voting power on such proposal, provided, however, that if an
amendment is adopted by written consent without a meeting of the shareholders,
the Secretary shall mail a copy of such amendment to each shareholder of record
who would have been entitled to vote thereon and did not participate in the
adoption thereof.
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ANNEX F
SECTION 1701.84 DISSENTS IN CASE OF A MERGER, CONSOLIDATION, COMBINATION, OR
MAJORITY SHARE ACQUISITION.
The following are entitled to relief as dissenting shareholders under section
1701.85 of the Revised Code:
(A) Shareholders of a domestic corporation that is being
merged or consolidated into a surviving or new entity, domestic or foreign,
pursuant to section 1701.78, 1701.781, 1701.79, 1701.791, or 1701.801 of the
Revised Code;
(B) In the case of a merger into a domestic corporation,
shareholders of the surviving corporation who under section 1701.78 or 1701.781
of the Revised Code are entitled to vote on the adoption of an agreement of
merger, but only as to the shares so entitling them to vote;
(C) Shareholders, other than the parent corporation, of a
domestic subsidiary corporation that is being merged into the domestic or
foreign parent corporation pursuant to section 1701.80 of the Revised Code;
(D) In the case of a combination or a majority share
acquisition, shareholders of the acquiring corporation who under section 1701.83
of the Revised Code are entitled to vote on such transaction, but only as to the
shares so entitling them to vote;
(E) Shareholders of a domestic subsidiary corporation into
which one or more domestic or foreign corporations are being merged pursuant to
section 1701.801 of the Revised Code.
SECTION 1701.85 PROCEDURE IN CASE OF DISSENTS.
(A)(1) A shareholder of a domestic corporation is entitled to
relief as a dissenting shareholder in respect of the proposals described in
sections 1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance
with this section.
(2) If the proposal must be submitted to the shareholders of
the corporation involved, the dissenting shareholder shall be a record holder of
the shares of the corporation as to which he seeks relief as of the date fixed
for the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on the proposal was taken at the meeting of the shareholders,
the dissenting shareholder shall deliver to the corporation a written demand for
payment to him of the fair cash value of the shares as to which he seeks relief,
which demand shall state his address, the number and class of such shares, and
the amount claimed by him as the fair cash value of the shares.
(3) The dissenting shareholder entitled to relief under
division (C) of section 1701.84 of the Revised Code in the case of a merger
pursuant to section 1701.80 of the Revised Code and a dissenting shareholder
entitled to relief under division (E) of section 1701.84 of the Revised Code in
the case of a merger pursuant to section 1701.801 of the Revised Code shall be a
record holder of the shares of the corporation as to which he seeks relief as of
the date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 of the Revised Code, the dissenting shareholder
shall deliver to the corporation a written demand for payment with the same
information as that provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served
on the constituent corporation involved constitutes service on the surviving or
the new entity, whether the demand is served before, on, or after the effective
date of the merger or consolidation.
(5) If the corporation sends to the dissenting shareholder, at
the address specified in his demand, a request for the certificates representing
the shares as to which he seeks relief, the dissenting shareholder, within
fifteen days from the date of the sending of such request, shall deliver to the
corporation the certificates requested so that the corporation may forthwith
endorse on them a legend to the effect that demand for the fair cash
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value of such shares has been made. The corporation promptly shall return such
endorsed certificates to the dissenting shareholder. A dissenting shareholder's
failure to deliver such certificates terminates his rights as a dissenting
shareholder, at the option of the corporation, exercised by written notice sent
to the dissenting shareholder within twenty days after the lapse of the
fifteen-day period, unless a court for good cause shown otherwise directs. If
shares represented by a certificate on which such a legend has been endorsed are
transferred, each new certificate issued for them shall bear a similar legend,
together with the name of the original dissenting holder of such shares. Upon
receiving a demand for payment from a dissenting shareholder who is the record
holder of uncertificated securities, the corporation shall make an appropriate
notation of the demand for payment in its shareholder records. If uncertificated
shares for which payment has been demanded are to be transferred, any new
certificate issued for the shares shall bear the legend required for
certificated securities as provided in this paragraph. A transferee of the
shares so endorsed, or of uncertificated securities where such notation has been
made, acquires only such rights in the corporation as the original dissenting
holder of such shares had immediately after the service of a demand for payment
of the fair cash value of the shares. A request under this paragraph by the
corporation is not an admission by the corporation that the shareholder is
entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder have
come to an agreement on the fair cash value per share of the shares as to which
the dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of the
county in which the principal office of the corporation that issued the shares
is located or was located when the proposal was adopted by the shareholders of
the corporation, or, if the proposal was not required to be submitted to the
shareholders, was approved by the directors. Other dissenting shareholders,
within that three-month period, may join as plaintiffs or may be joined as
defendants in any such proceeding, and any two or more such proceedings may be
consolidated. The complaint shall contain a brief statement of the facts,
including the vote and the facts entitling the dissenting shareholder to the
relief demanded. No answer to such a complaint is required. Upon the filing of
such a complaint, the court, on motion of the petitioner, shall enter an order
fixing a date for a hearing on the complaint and requiring that a copy of the
complaint and a notice of the filing and of the date for hearing be given to the
respondent or defendant in the manner in which summons is required to be served
or substituted service is required to be made in other cases. On the day fixed
for the hearing on the complaint or any adjournment of it, the court shall
determine from the complaint and from such evidence as is submitted by either
party whether the dissenting shareholder is entitled to be paid the fair cash
value of any shares and, if so, the number and class of such shares. If the
court finds that the dissenting shareholder is so entitled, the court may
appoint one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such power
and authority as is specified in the order of their appointment. The court
thereupon shall make a finding as to the fair cash value of a share and shall
render judgment against the corporation for the payment of it, with interest at
such rate and from such date as the court considers equitable. The costs of the
proceeding, including reasonable compensation to the appraisers to be fixed by
the court, shall be assessed or apportioned as the court considers equitable.
The proceeding is a special proceeding and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the Rules of Appellate Procedure
and, to the extent not in conflict with those rules, Chapter 2505 of the Revised
Code. If, during the pendency of any proceeding instituted under this section, a
suit or proceeding is or has been instituted to enjoin or otherwise to prevent
the carrying out of the action as to which the shareholder has dissented, the
proceeding instituted under this section shall be stayed until the final
determination of the other suit or proceeding. Unless any provision in division
(D) of this section is applicable, the fair cash value of the shares that is
agreed upon by the parties or fixed under this section shall be paid within
thirty days after the date of final determination of such value under this
division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a holder
of uncertificated securities entitled to such payment. In the case of holders of
shares represented by certificates, payment shall be made only upon and
simultaneously with the surrender to the corporation of the certificates
representing the shares for which the payment is made.
(C) If the proposal was required to be submitted to the
shareholders of the corporation, fair cash value as to those shareholders shall
be determined as of the day prior to the day on which the vote by the
shareholders was taken and, in the case of a merger pursuant to section 1701.80
or 1701.801 of the Revised Code, fair cash value as to shareholders of a
constituent subsidiary corporation shall be determined as of the day before the
adoption of the agreement of merger by the directors of the particular
subsidiary corporation. The fair cash value of a share for the purposes of this
section is the amount that a willing seller who is under no compulsion to sell
would be willing to accept and that a willing buyer who is under no compulsion
to purchase would be willing to pay, but in no event shall the fair cash value
of a share exceed the amount specified in the demand of the particular
shareholder. In
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computing such fair cash value, any appreciation or depreciation in market value
resulting from the proposal submitted to the directors or to the shareholders
shall be excluded.
(D)(1) The right and obligation of a dissenting shareholder to
receive such fair cash value and to sell such shares as to which he seeks
relief, and the right and obligation of the corporation to purchase such shares
and to pay the fair cash value of them terminates if any of the following
applies:
(a) The dissenting shareholder has not complied with this
section, unless the corporation by its directors waives such failure;
(b) The corporation abandons the action involved or is finally
enjoined or prevented from carrying it out, or the shareholders rescind
their adoption of the action involved;
(c) The dissenting shareholder withdraws his demand, with the
consent of the corporation by its directors;
(d) The corporation and the dissenting shareholder have not
come to an agreement as to the fair cash value per share, and neither
the shareholder nor the corporation has filed or joined in a complaint
under division (B) of this section within the period provided in that
division.
(2) For purposes of division (D)(1) of this section, if the
merger or consolidation has become effective and the surviving or new entity is
not a corporation, action required to be taken by the directors of the
corporation shall be taken by the general partners of a surviving or new
partnership or the comparable representatives of any other surviving or new
entity.
(E) From the time of the dissenting shareholder's giving of
the demand until either the termination of the rights and obligations arising
from it or the purchase of the shares by the corporation, all other rights
accruing from such shares, including voting and dividend or distribution rights,
are suspended. If during the suspension, any dividend or distribution is paid in
money upon shares of such class or any dividend, distribution, or interest is
paid in money upon any securities issued in extinguishment of or in substitution
for such shares, an amount equal to the dividend, distribution, or interest
which, except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated other
than by the purchase of the shares by the corporation, all rights of the holder
shall be restored and all distributions which, except for the suspension, would
have been made shall be made to the holder of record of the shares at the time
of termination.
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ANNEX G
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
Each share of Brush Engineered Materials common stock will, similar to
the shares of Brush Wellman common stock, have an associated right, which will
entitle the holder of that right to purchase from Brush Engineered Materials one
one-hundredth of a share of Serial Preferred Stock, Series A, without par value,
of Brush Engineered Materials at a price of $110 per one one-hundredth of a
share of preferred stock, subject to adjustment. The description and terms of
the rights are set forth in a Rights Agreement, dated as of , 2000, between
Brush Engineered Materials and National City Bank, N.A., as Rights Agent.
Under the Rights Agreement, the rights will be evidenced by the
certificates evidencing shares of common stock until a distribution under the
Rights Agreement occurs. A distribution under the Rights Agreement will occur on
the earlier of (a) the close of business on the tenth calendar day following the
first date of public announcement that a person (other than Brush Engineered
Materials, a subsidiary or employee benefit or stock ownership plan of Brush
Engineered Materials or any subsidiary or any entity holding shares of common
stock for or pursuant to the terms of any such plan), together with its
affiliates and associates, has acquired beneficial ownership of 20% or more of
the then-outstanding shares of common stock and (b) the close of business on the
tenth business day (or such later date as may be specified by the Board of
Directors) following the commencement of a tender offer or exchange offer by any
person (other than Brush Engineered Materials, a subsidiary or employee benefit
or stock ownership plan of Brush Engineered Materials or any subsidiary or any
entity holding shares of common stock for or pursuant to the terms of any such
plan), the consummation of which would result in beneficial ownership by such
person of 20% or more of the then-outstanding shares of common stock.
The Rights Agreement provides that, until a distribution under the
Rights Agreement occurs, the rights may be transferred with, and only with, the
shares of common stock. Furthermore, until a distribution under the Rights
Agreement occurs (or until the earlier redemption or expiration of the rights),
(a) any certificate evidencing shares of common stock of Brush Engineered
Materials issued upon the transfer or new issuance of shares of common stock
will contain a notation incorporating the Rights Agreement by reference and (b)
the surrender for transfer of any certificates evidencing shares of common stock
will also constitute the transfer of the rights associated with the surrendered
certificates. As soon as practicable following a distribution under the Rights
Agreement, separate certificates evidencing the rights will be mailed to record
holders of shares of common stock as of the close of business on the date the
distribution occurs. After the distribution, these separate certificates, alone,
will evidence the rights. No right is exercisable at any time prior to the
declaration of a distribution under the Rights Agreement. The rights will expire
on _________. Before their expiration, rights may be redeemed, exchanged or
amended by Brush Engineered Materials, as described below. Until a right is
exercised, the holder of the right, as such, will have no rights as a
shareholder of Brush Engineered Materials, including the right to vote or to
receive dividends.
The purchase price payable, and the number of the shares of preferred
stock or other securities issuable, upon exercise of the rights will be subject
to adjustment from time to time to prevent dilution (a) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the shares of
preferred stock, (b) upon the grant to holders of shares of preferred stock of
certain rights or warrants to subscribe for or purchase the shares of preferred
stock at a price, or securities convertible into the shares of preferred stock
with a conversion price that is less than the then-current market price of the
shares of preferred stock or (c) upon the distribution to holders of the shares
of preferred stock of evidences of indebtedness, cash (excluding regular
periodic cash dividends), assets, stock (excluding dividends payable in the
shares of preferred stock) or subscription rights or warrants (other than those
referred to above). The number of rights associated with each Preferred Share
will be subject to adjustment in the event of a stock dividend on the shares of
common stock payable in shares of common stock or a subdivision, combination or
reclassification of shares of common stock occurring, in any such case, prior to
the occurrence of a distribution under the Rights Agreement.
Subject to Brush Engineered Materials' Amended and Restated Articles of
Incorporation, the shares of preferred stock issuable upon exercise of the
rights will be redeemable from time to time at the option of the Board of
Directors, in whole or in part, at a redemption price per share equal to the
price at which the holder of a right could purchase one share of preferred
stock. In the event that fewer than all of the outstanding shares of preferred
stock are to be redeemed, the number of shares to be redeemed shall be as
determined by the Board of Directors and the shares to be redeemed shall be
selected pro rata or by lot in such manner as determined by the Board of
Directors. The holders of the shares of preferred stock will be entitled to
receive, when and as declared by the Board of Directors in accordance with Brush
Engineered Materials' Amended and Restated Articles of Incorporation, cumulative
quarterly dividends payable in cash
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on the first day of January, April, July and October in each year, commencing on
the first such date after the first issuance of a preferred share or fraction
thereof.
Rights will be exercisable to purchase shares of preferred stock only
after the date of a distribution under the Rights Agreement and prior to the
occurrence of an event described in the next paragraph. A distribution resulting
from the commencement of a tender offer or exchange offer described in clause
(b) of the second paragraph of this summary could precede the occurrence of an
event described in the following paragraph and thus result in the rights being
exercisable to purchase shares of preferred stock. A distribution resulting from
any occurrence described in clause (a) of the second paragraph of this summary
would necessarily follow the occurrence of an event described in the next
paragraph and thus result in the rights being exercisable to purchase shares of
common stock or other securities as described below.
Under the Rights Agreement, the terms of the rights automatically
adjust in the event that (a) any person or entity, together with its affiliates
and associates, becomes the beneficial owner of 20% or more of the outstanding
shares of common stock of Brush Engineered Materials, (b) any person or entity
that, together with its affiliates and associates, has acquired beneficial
ownership of 20% or more of the outstanding shares of common stock of Brush
Engineered Materials, or any affiliate or associate of such a person or entity,
merges into or combines with Brush Engineered Materials and Brush Engineered
Materials is the surviving corporation, (c) any person or entity that, together
with its affiliates and associates, has acquired beneficial ownership of 20% or
more of the outstanding shares of common stock of Brush Engineered Materials, or
any affiliate or associate of such a person or entity, effects certain other
transactions with Brush Engineered Materials or (d) during such time as there is
a person or entity that, together with its affiliates and associates, has
acquired beneficial ownership of 20% or more of the outstanding shares of common
stock of Brush Engineered Materials, Brush Engineered Materials effects certain
transactions, in each case as described in the Rights Agreement. Upon the
occurrence of any event described in this paragraph, above, proper provision
will be made so that from and after the latest of (a) the date on which such
event occurred, (b) the first date of public announcement that a person or
entity (other than certain affiliates of Brush Engineered Materials) has,
together with its affiliates and associates, acquired beneficial ownership of
20% or more of the common stock and (c) the date of a distribution under the
Rights Agreement, each holder of a right (other than rights that are or were
owned beneficially by a person or entity that, together with its associates and
affiliates, has acquired 20% of the common stock, which rights will be void),
will have the right to receive, upon exercise of the right at the then-current
exercise price of the right, that number of shares of common stock (or, under
certain circumstances, an economically equivalent security or securities of
Brush Engineered Materials) that at the time of such event have a market value
of two times the exercise price of the right.
Under the Rights Agreement, the terms of the rights also automatically
adjust in the event that, at any time after a person or entity, together with
its affiliates and associates, has acquired beneficial ownership of 20% or more
of the outstanding shares of common stock of Brush Engineered Materials, (a)
Brush Engineered Materials merges with or into any person and Brush Engineered
Materials is not the surviving corporation, (b) any person merges with or into
Brush Engineered Materials and Brush Engineered Materials is the surviving
corporation, but all or part of the shares of common stock are changed or
exchanged for stock or other securities of any other person or cash or any other
property or (c) 50% or more of Brush Engineered Materials' assets or earning
power, including securities creating obligations of Brush Engineered Materials,
are sold, in each case as described in the Rights Agreement. Upon the occurrence
of any such event, proper provision will be made so that, from and after the
latest of (a) the date on which such event occurred, (b) the first date of
public announcement that a person or entity (other than certain affiliates of
Brush Engineered Materials) has, together with its affiliates and associates,
acquired beneficial ownership of 20% or more of the common stock and (c) the
date of a distribution under the Rights Agreement, each holder of a right, other
than rights that have become void, will thereafter have the right to receive,
upon the exercise thereof at the then-current exercise price of the right, that
number of shares of common stock (or, under certain circumstances, an
economically equivalent security or securities) of such other person that at the
time of the event have a market value of two times the exercise price of the
right.
From and after the date of the first occurrence of an event described
in the next preceding paragraph, rights (other than any rights that have become
void) will be exercisable as described above, upon payment of the aggregate
exercise price in cash. In addition, at any time after the later of (a) the
first date of public announcement that a person or entity (other than certain
affiliates of Brush Engineered Materials) has, together with its affiliates and
associates, acquired beneficial ownership of 20% or more of the common stock and
(b) the date of a distribution under the Rights Agreement, and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding shares of common stock, Brush Engineered Materials may
exchange the rights (other than any rights that have become void), in whole or
in part, at an exchange ratio of one share of common stock per right (subject to
adjustment).
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With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment in the purchase
price of at least 1%. Brush Engineered Materials will not be required to issue
fractional shares of preferred stock (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share, which may, at the option of
Brush Engineered Materials, be evidenced by depositary receipts) or fractional
shares of common stock or other securities issuable upon the exercise of rights.
In lieu of issuing such securities, Brush Engineered Materials may make a cash
payment, as provided in the Rights Agreement.
Brush Engineered Materials may, at its option, redeem the rights in
whole, but not in part, at a price of $0.01 per right, subject to adjustment, at
any time prior to the close of business on the later of (a) the date on which a
distribution under the Rights Agreement occurs and (b) the date of the first
occurrence of an event that causes the terms of the rights to automatically
adjust, which events are described above. Immediately upon any redemption of the
rights, the right to exercise the rights will terminate and the only right of
the holders of rights will be to receive the redemption price described in this
paragraph.
The Rights Agreement may be amended by Brush Engineered Materials
without the approval of any holders of certificates evidencing rights, including
amendments that increase or decrease the purchase price, that add other events
requiring adjustment to the purchase price payable and the number of the shares
of preferred stock or other securities issuable upon the exercise of the rights
or that modify procedures relating to the redemption of the rights, except that
no amendment may be made that decreases the stated redemption price to an amount
less than $0.01 per right.
The Board of Directors will have the exclusive power and authority to
administer the Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to Brush Engineered Materials
therein, or as may be necessary or advisable in the administration of the Rights
Agreement, including without limitation the right and power to interpret the
provisions of the Rights Agreement and to make all determinations deemed
necessary or advisable for the administration of the Rights Agreement (including
any determination to redeem or not redeem the rights or to amend or not amend
the Rights Agreement). All such actions, calculations, interpretations and
determinations (including any omission with respect to any of the foregoing)
which are done or made by the Board of Directors in good faith will be final,
conclusive and binding on Brush Engineered Materials, National City Bank, N.A.,
as Rights Agent, the holders of the rights and all other parties and will not
subject the Board of Directors to any liability to any person, including without
limitation the Rights Agent and the holders of the rights.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In general, a director of an Ohio corporation will not be found to have
violated his fiduciary duties unless there is proof by clear and convincing
evidence that the director (1) has not acted in good faith, (2) has not acted in
a manner he reasonably believes to be in or not opposed to the best interests of
the corporation or (3) has not acted with the care that an ordinarily prudent
person in a like position would use under similar circumstances. Monetary
damages for any act taken or omission made as a director are generally awarded
only if it is proved by clear and convincing evidence that the director
undertook such act or omission either with deliberate intent to cause injury to
the corporation or with reckless disregard for the best interests of the
corporation.
Under Ohio law, a corporation must indemnify its directors, officers,
employees and agents against expenses reasonably incurred in connection with the
successful defense (on the merits or otherwise) of an action, suit or
proceeding. A corporation may indemnify such persons in actions, suits and
proceedings (including certain derivative suits) if the individual has acted in
good faith and in a manner that he believes to be in or not opposed to the best
interests of the corporation. In the case of a criminal proceeding, the
individual must also have no reasonable cause to believe that his conduct was
unlawful.
Indemnification may be made only if ordered by a court or if
authorized in a specific case upon a determination that the applicable standard
of conduct has been met. Such a determination may be made by a majority of the
disinterested directors, by independent legal counsel or by the shareholders.
Under Ohio law, a corporation may pay the expenses of any indemnified
individual as they are incurred, in advance of the final disposition of the
matter, if the individual provides an undertaking to repay the amount if it is
ultimately determined that he is not entitled to be indemnified. Ohio law
generally requires all expenses, including attorney's fees, incurred by a
director in defending any action, suit or proceeding to be paid by the
corporation as they are incurred if the director agrees (i) to repay such
amounts in the event that it is proved by clear and convincing evidence that his
action or omission was undertaken with deliberate intent to cause injury to the
corporation or with reckless disregard for the best interests of the corporation
and (ii) to reasonably cooperate with the corporation concerning the action,
suit or proceeding.
The code of regulations of Brush Engineered Materials Inc. provides for
indemnification that is coextensive with that permitted under Ohio law. In
addition, Brush Engineered Materials Inc. may enter into agreements that
indemnify its directors and certain of its officers to the maximum extent
permitted by applicable law. The indemnification so granted is not limited to
the indemnification specifically authorized by the Ohio General Corporation Law.
Each agreement represents a contractual obligation of Brush Engineered Materials
Inc. that cannot be altered unilaterally.
II-1
<PAGE> 87
It is anticipated that Brush Engineered Materials Inc. will obtain a
directors' and officers' liability insurance policy, pursuant to which the
directors and officers of Brush Engineered Materials will be insured against
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended and the Securities Exchange Act of 1934, as amended.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT INDEX
-------------
EXHIBIT
NO. DESCRIPTION
- -------- --------------------
1 Inapplicable.
2* Agreement of Merger, dated as of ________, 2000, among Brush
Wellman Inc. and
Brush Engineered Materials Inc. (filed as Annex A to this
proxy statement/prospectus and constituting a part of this
registration statement).
3(a) Articles of Incorporation of Brush Engineered Materials Inc.
(filed as Annex B to this proxy statement/prospectus and
constituting a part of this registration statement).
3(b) Code of Regulations of Brush Engineered Materials Inc. (filed
as Annex C to this proxy statement/prospectus and constituting
a part of this registration statement).
3(c) Second Amended and Restated Articles of Incorporation of Brush
Wellman Inc., dated January 27, 1998 (filed as Annex D to this
proxy statement/prospectus and constituting a part of this
registration statement).
3(d) Code of Regulations of Brush Wellman Inc., as amended April
27, 1993 (filed as Annex E to this proxy statement/prospectus
and constituting a part of this registration statement).
4(a)* Form of Certificate of a share of common stock of Brush
Engineered Materials Inc.
4(b) Credit Agreement, dated as of December 13, 1994, between Brush
Wellman Inc. and National City Bank acting for itself and as
agent for three other banking institutions (filed as Exhibit
4(a) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1994), incorporated herein by reference.
4(c) First Amendment to Amended and Restated Credit Agreement,
dated as of December 30, 1996, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for three
other banking institutions (filed as Exhibit 4(b) to
II-2
<PAGE> 88
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.
4(d) Second Amendment to Amended and Restated Credit Agreement,
dated as of September 2, 1997, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for certain
other banking institutions (filed as Exhibit 4(c) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1997), incorporated herein by reference.
4(e) Third Amendment to Amended and Restated Credit Agreement,
dated as of January 26, 1999, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for certain
other banking institutions (filed as Exhibit 4(d) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1998).
4(f) Rights Agreement between Brush Wellman Inc. and National City
Bank N.A., dated as of January 27, 1998 (filed as Exhibit 4(d)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1997), incorporated herein by reference.
4(g) Issuing and Paying Agency Agreement, dated as of February 1,
1990, including a specimen form of a medium term note issued
thereunder, between Brush Wellman Inc. and First Trust N.A.
(formerly with Morgan Guaranty Trust Company of New York)
(filed as Exhibit 4(c) to Brush Wellman's Form 10-K Annual
Report for the year ended December 31, 1994), incorporated
herein by reference.
4(h) Pursuant to Regulation S-K, Item 601 (b)(4), Brush Engineered
Materials Inc. agrees to furnish to the Commission, upon its
request, a copy of the instruments defining the rights of
holders of long-term debt of Brush Wellman Inc. that are not
being filed with this report.
5* Form of opinion and consent of Jones, Day, Reavis & Pogue.
8* Form of tax opinion of Jones, Day, Reavis & Pogue.
10(a) Employment Agreement, dated as of March 20, 1991, between
Brush Wellman Inc. and Gordon D. Harnett (filed as Exhibit
10(a) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1990), incorporated herein by reference.
10(b) Form of Employment Agreement, dated as of February 20, 1989,
between Brush Wellman Inc. and Andrew J. Sandor (filed as
Exhibit 10(b) to Brush Wellman's Form 10-K Annual Report for
the year ended December 31, 1994), incorporated herein by
reference.
10(c) Form of Employment Agreement, dated as of March 2, 1999,
between Brush Wellman Inc. and each of Michael D. Anderson,
Jordan P. Frazier, John D. Grampa, Michael C. Hasychak,
Alfonso T. Lubrano and John J. Paschall (filed as Exhibit
10(c) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1998), incorporated herein by reference.
II-3
<PAGE> 89
10(d) Form of Amendment to the February 20, 1989 Employment
Agreement, dated as of February 28, 1991, between Brush
Wellman Inc. and Andrew J. Sandor (filed as Exhibit 10(c) to
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1990), incorporated herein by reference.
10(e) Form of Employment Agreement between Brush Wellman Inc. and
each of Daniel A. Skoch, dated as of January 28, 1992, Stephen
Freeman, dated as of August 3, 1993, and Brian J. Derry, dated
as of May 6, 1997 (filed as Exhibit 10(d) to Brush Wellman's
Form 10-K Annual Report for the year ended December 31, 1991),
incorporated herein by reference.
10(f) Form of Employment Agreement, dated as of June 29, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(a) to Brush Wellman's Form 10-Q Quarterly Report
for the quarter ended July 3, 1998), incorporated herein by
reference.
10(g) Employment Arrangement, dated as of June 3, 1998, between
Brush Wellman Inc. and William R. Seelbach (filed as Exhibit
10(b) to Brush Wellman's Form 10-Q Quarterly Report for the
quarter ended July 3, 1998), incorporated herein by reference.
10(h) Addendum to Employment Arrangement, dated as of June 24, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(c) to Brush Wellman's Form 10-Q Quarterly Report
for the quarter ended July 3, 1998), incorporated herein by
reference.
10(i) Form of Indemnification Agreement, dated as of June 29, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(d) to Brush Wellman's Form 10-Q Quarterly Report
for the quarter ended July 3, 1998), incorporated herein by
reference.
10(j) Form of Trust Agreement between Brush Wellman Inc. and Key
Trust Company of Ohio, N.A. (formerly Ameritrust Company
National Association) on behalf of Brush Wellman Inc.'s
executive officers (filed as Exhibit 10(e) to Brush Wellman's
Form 10-K Annual Report for the year ended December 31, 1994),
incorporated herein by reference.
10(k) Form of Indemnification Agreement entered into by Brush
Wellman Inc. and its executive officers (filed as Exhibit
10(g) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1994), incorporated herein by reference.
10(l) Form of Indemnification Agreement entered into by Brush
Wellman Inc. and its directors (filed as Exhibit 10(h) to
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1994), incorporated herein by reference.
10(m) Directors' Retirement Plan, as amended January 26, 1993 (filed
as Exhibit 10(i) to Brush Wellman's Form 10-K Annual Report
for the year ended December 31, 1992), incorporated herein by
reference.
II-4
<PAGE> 90
10(n) Deferred Compensation Plan for Nonemployee Directors,
effective January 1, 1992 (filed as Exhibit I to Brush
Wellman's Proxy Statement dated March 6, 1992, Commission File
No. 1-7006), incorporated herein by reference.
10(o) Form of Trust Agreement between Brush Wellman Inc. and
National City Bank, dated as of January 1, 1992, on behalf of
Nonemployee Directors of Brush Wellman Inc. (filed as Exhibit
10(k) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1992), incorporated herein by reference.
10(p) Incentive Compensation Plan adopted December 16, 1991,
effective January 1, 1992 (filed as Exhibit 10(l) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1991), incorporated herein by reference.
10(q) Supplemental Retirement Plan, as amended and restated December
1, 1992 (filed as Exhibit 10(n) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1992),
incorporated herein by reference.
10(r) Amendment Number 2, adopted January 1, 1996, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(o) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1995),
incorporated herein by reference.
10(s) Amendment Number 3, adopted May 5, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(s) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(t) Amendment Number 4, adopted December 1, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(t) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(u) Amendment Number 5, adopted December 31, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(u) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(v) Form of Trust Agreement between Brush Wellman Inc. and Key
Trust Company of Ohio, N.A. (formerly Society National Bank),
dated as of January 8, 1993, pursuant to the December 1, 1992
amended Supplemental Retirement Benefit Plan (filed as Exhibit
10(p) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1992), incorporated herein by reference.
10(w) Key Employee Share Option Plan (filed on Form S-8 on May 5,
1998), incorporated herein by reference.
II-5
<PAGE> 91
10(x) 1979 Stock Option Plan, as amended pursuant to approval of
shareholders on April 21, 1982 (filed as Exhibit 15A to
Post-Effective Amendment No. 3 to Registration Statement No.
2-64080), incorporated herein by reference.
10(y) 1984 Stock Option Plan as amended by the Board of Directors on
April 18, 1984 and February 24, 1987 (filed as Exhibit 4.4 to
Registration Statement No. 33-28605), incorporated herein by
reference.
10(z) 1989 Stock Option Plan (filed as Exhibit 4.5 to Registration
Statement No. 33-28605), incorporated herein by reference.
10(aa) 1990 Stock Option Plan for Nonemployee Directors (filed as
Exhibit 4.6 to Registration Statement No. 33-35979),
incorporated herein by reference.
10(bb) 1995 Stock Incentive Plan, as amended March 3, 1998 (filed as
Exhibit A to Brush Wellman's Proxy Statement, dated March 16,
1998, Commission File No. 1-7006), incorporated herein by
reference.
10(cc) Lease, dated as of October 1, 1996, between Brush Wellman Inc.
and Toledo-Lucas County Port Authority (filed as Exhibit 10(v)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.
10(dd) Master Lease Agreement, dated as of December 30, 1996, between
Brush Wellman Inc. and National City Bank acting for itself
and as agent for certain participants (filed as Exhibit 10(w)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.
10(ee) First Amendment to Master Lease Agreement, dated as of
September 2, 1997, between Brush Wellman Inc. and National
City Bank acting for itself and as agent for certain
participants (filed as Exhibit 10(ee) to Brush Wellman's Form
10-K Annual Report for the year ended December 31, 1998).
10(ff) Second Amendment to Master Lease Agreement and Amendment to
Disbursement Schedules, dated as of January 26, 1999, between
Brush Wellman Inc. and National City Bank acting for itself
and as agent for certain participants (filed as Exhibit 10(ff)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
10(gg) 1997 Stock Incentive Plan for Non-Employee Directors (filed as
Exhibit B to Brush Wellman's Proxy Statement dated March 16,
1998, Commission File No. 1-7006), incorporated herein by
reference.
13(a) Annual report on Form 10-K of Brush Wellman Inc. for the
fiscal year ended December 31, 1998 (incorporated herein by
reference to such report as filed with the Securities and
Exchange Commission by Brush Wellman Inc., Securities and
Exchange Commission File 1-7006.
II-6
<PAGE> 92
13(b) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended April 2, 1999.
13(c) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended July 2, 1999.
13(d) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended October 1, 1999.
21 Subsidiaries of the registrant.
23(a) Consent of Ernst & Young LLP, independent public accountants.
23(b) Form of opinion and consent of Jones, Day, Reavis & Pogue
(incorporated by reference to Exhibit 5 hereto).
24 Power of Attorney for each director and officer of Brush
Engineered Materials Inc. signing this registration statement.
27(a) Financial Data Schedule 1998 (filed as Exhibit 27.1 to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1998), incorporated herein by reference.
27(b) Financial Data Schedule 1997 Restated (filed as Exhibit 27.2
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
27(c) Financial Data Schedule 1996 Restated (filed as Exhibit 27.3
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
99(a) Form of proxy card of Brush Wellman Inc.
99(b)** Consents of prospective directors of Brush Engineered
Materials Inc.
- ---------------------------
* To be filed by amendment.
** John Sherwin, Jr.'s consent to be filed by amendment.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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 Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be
II-7
<PAGE> 93
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.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(e) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(f) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (e) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes 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.
(g) 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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
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<PAGE> 94
asserted 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 Act and will be governed by the final
adjudication of such issue.
II-9
<PAGE> 95
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant 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 February 1, 2000.
BRUSH ENGINEERED MATERIALS INC.
By /s/ John D. Grampa
------------------------------------------------
John D. Grampa
Vice President, Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
* February 1, 2000
- -----------------------------------------------------
Gordon D. Harnett
Chairman, President and Chief Executive Officer
/s/ John D. Grampa February 1, 2000
- -----------------------------------------------------
John D. Grampa
Vice President, Finance and Chief Financial Officer
* February 1, 2000
- -----------------------------------------------------
Michael C. Hasychak
Vice President, Secretary and Treasurer
* The undersigned, by signing his name hereto, does sign and execute this
registration statement pursuant to the powers of attorney executed by
the above-named officers and directors of the registrant, which are
being filed herewith with the Securities and Exchange Commission on
behalf of such officers and directors.
/s/ John D. Grampa February 1, 2000
- -----------------------------------------------------
John D. Grampa
Vice President, Finance and Chief Financial Officer
II-10
<PAGE> 96
EXHIBIT INDEX
-------------
EXHIBIT
NO. DESCRIPTION
- ------- -----------
1 Inapplicable.
2* Agreement of Merger, dated as of ___________, 2000, among
Brush Wellman Inc. and
Brush Engineered Materials Inc. (filed as Annex A to this
proxy statement/prospectus and constituting a part of this
registration statement).
3(a) Amended and Restated Articles of Incorporation of Brush
Engineered Materials Inc. (filed as Annex B to this proxy
statement/prospectus and constituting a part of this
registration statement).
3(b) Amended and Restated Code of Regulations of Brush Engineered
Materials Inc. (filed as Annex C to this proxy
statement/prospectus and constituting a part of this
registration statement).
3(c) Second Amended and Restated Articles of Incorporation of Brush
Wellman Inc., dated January 27, 1998 (filed as Annex D to this
proxy statement/prospectus and constituting a part of this
registration statement).
3(d) Code of Regulations of Brush Wellman Inc., as amended April
27, 1993 (filed as Annex E to this proxy statement/prospectus
and constituting a part of this registration statement).
4(a)* Form of Certificate of a share of common stock of Brush
Engineered Materials Inc.
4(b) Credit Agreement, dated as of December 13, 1994, between Brush
Wellman Inc. and National City Bank acting for itself and as
agent for three other banking institutions (filed as Exhibit
4(a) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1994), incorporated herein by reference.
4(c) First Amendment to Amended and Restated Credit Agreement,
dated as of December 30, 1996, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for three
other banking institutions (filed as Exhibit 4(b) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1996), incorporated herein by reference.
4(d) Second Amendment to Amended and Restated Credit Agreement,
dated as of September 2, 1997, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for certain
other banking institutions (filed as Exhibit 4(c) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1997), incorporated herein by reference.
4(e) Third Amendment to Amended and Restated Credit Agreement,
dated as of January 26, 1999, between Brush Wellman Inc. and
National City Bank acting for itself and as agent for certain
other banking institutions (filed as Exhibit 4(d) to
II-11
<PAGE> 97
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998).
4(f) Rights Agreement between Brush Wellman Inc. and National City
Bank N.A., dated as of January 27, 1998 (filed as Exhibit 4(d)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1997), incorporated herein by reference.
4(g) Issuing and Paying Agency Agreement, dated as of February 1,
1990, including a specimen form of a medium term note issued
thereunder, between Brush Wellman Inc. and First Trust N.A.
(formerly with Morgan Guaranty Trust Company of New York)
(filed as Exhibit 4(c) to Brush Wellman's Form 10-K Annual
Report for the year ended December 31, 1994), incorporated
herein by reference.
4(h) Pursuant to Regulation S-K, Item 601 (b)(4), Brush Engineered
Materials Inc. agrees to furnish to the Commission, upon its
request, a copy of the instruments defining the rights of
holders of long-term debt of Brush Wellman Inc. that are not
being filed with this report.
5* Form of opinion and consent of Jones, Day, Reavis & Pogue.
8* Form of tax opinion of Jones, Day, Reavis & Pogue.
10(a) Employment Agreement, dated as of March 20, 1991, between
Brush Wellman Inc. and Gordon D. Harnett (filed as Exhibit
10(a) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1990), incorporated herein by reference.
10(b) Form of Employment Agreement, dated as of February 20, 1989,
between Brush Wellman Inc. and Andrew J. Sandor (filed as
Exhibit 10(b) to Brush Wellman's Form 10-K Annual Report for
the year ended December 31, 1994), incorporated herein by
reference.
10(c) Form of Employment Agreement, dated as of March 2, 1999,
between Brush Wellman Inc. and each of Michael D. Anderson,
Jordan P. Frazier, John D. Grampa, Michael C. Hasychak,
Alfonso T. Lubrano and John J. Paschall (filed as Exhibit
10(c) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1998), incorporated herein by reference.
10(d) Form of Amendment to the February 20, 1989 Employment
Agreement, dated as of February 28, 1991, between Brush
Wellman Inc. and Andrew J. Sandor (filed as Exhibit 10(c) to
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1990), incorporated herein by reference.
10(e) Form of Employment Agreement between Brush Wellman Inc. and
each of Daniel A. Skoch, dated as of January 28, 1992, Stephen
Freeman, dated as of August 3, 1993, and Brian J. Derry, dated
as of May 6, 1997 (filed as Exhibit 10(d) to Brush Wellman's
Form 10-K Annual Report for the year ended December 31, 1991),
incorporated herein by reference.
10(f) Form of Employment Agreement, dated as of June 29, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(a) to Brush Wellman's
II-12
<PAGE> 98
Form 10-Q Quarterly Report for the quarter ended July 3,
1998), incorporated herein by reference.
10(g) Employment Arrangement, dated as of June 3, 1998, between
Brush Wellman Inc. and William R. Seelbach (filed as Exhibit
10(b) to Brush Wellman's Form 10-Q Quarterly Report for the
quarter ended July 3, 1998), incorporated herein by reference.
10(h) Addendum to Employment Arrangement, dated as of June 24, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(c) to Brush Wellman's Form 10-Q Quarterly Report
for the quarter ended July 3, 1998), incorporated herein by
reference.
10(i) Form of Indemnification Agreement, dated as of June 29, 1998,
between Brush Wellman Inc. and William R. Seelbach (filed as
Exhibit 10(d) to Brush Wellman's Form 10-Q Quarterly Report
for the quarter ended July 3, 1998), incorporated herein by
reference.
10(j) Form of Trust Agreement between Brush Wellman Inc. and Key
Trust Company of Ohio, N.A. (formerly Ameritrust Company
National Association) on behalf of Brush Wellman Inc.'s
executive officers (filed as Exhibit 10(e) to Brush Wellman's
Form 10-K Annual Report for the year ended December 31, 1994),
incorporated herein by reference.
10(k) Form of Indemnification Agreement entered into by Brush
Wellman Inc. and its executive officers (filed as Exhibit
10(g) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1994), incorporated herein by reference.
10(l) Form of Indemnification Agreement entered into by Brush
Wellman Inc. and its directors (filed as Exhibit 10(h) to
Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1994), incorporated herein by reference.
10(m) Directors' Retirement Plan, as amended January 26, 1993 (filed
as Exhibit 10(i) to Brush Wellman's Form 10-K Annual Report
for the year ended December 31, 1992), incorporated herein by
reference.
10(n) Deferred Compensation Plan for Nonemployee Directors,
effective January 1, 1992 (filed as Exhibit I to Brush
Wellman's Proxy Statement dated March 6, 1992, Commission File
No. 1-7006), incorporated herein by reference.
10(o) Form of Trust Agreement between Brush Wellman Inc. and
National City Bank, dated as of January 1, 1992, on behalf of
Nonemployee Directors of Brush Wellman Inc. (filed as Exhibit
10(k) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1992), incorporated herein by reference.
10(p) Incentive Compensation Plan adopted December 16, 1991,
effective January 1, 1992 (filed as Exhibit 10(l) to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1991), incorporated herein by reference.
II-13
<PAGE> 99
10(q) Supplemental Retirement Plan, as amended and restated December
1, 1992 (filed as Exhibit 10(n) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1992),
incorporated herein by reference.
10(r) Amendment Number 2, adopted January 1, 1996, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(o) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1995),
incorporated herein by reference.
10(s) Amendment Number 3, adopted May 5, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(s) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(t) Amendment Number 4, adopted December 1, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(t) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(u) Amendment Number 5, adopted December 31, 1998, to Supplemental
Retirement Benefit Plan, as amended and restated December 1,
1992 (filed as Exhibit 10(u) to Brush Wellman's Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
10(v) Form of Trust Agreement between Brush Wellman Inc. and Key
Trust Company of Ohio, N.A. (formerly Society National Bank),
dated as of January 8, 1993, pursuant to the December 1, 1992
amended Supplemental Retirement Benefit Plan (filed as Exhibit
10(p) to Brush Wellman's Form 10-K Annual Report for the year
ended December 31, 1992), incorporated herein by reference.
10(w) Key Employee Share Option Plan (filed on Form S-8 on May 5,
1998), incorporated herein by reference.
10(x) 1979 Stock Option Plan, as amended pursuant to approval of
shareholders on April 21, 1982 (filed as Exhibit 15A to
Post-Effective Amendment No. 3 to Registration Statement No.
2-64080), incorporated herein by reference.
10(y) 1984 Stock Option Plan as amended by the Board of Directors on
April 18, 1984 and February 24, 1987 (filed as Exhibit 4.4 to
Registration Statement No. 33-28605), incorporated herein by
reference.
10(z) 1989 Stock Option Plan (filed as Exhibit 4.5 to Registration
Statement No. 33-28605), incorporated herein by reference.
10(aa) 1990 Stock Option Plan for Nonemployee Directors (filed as
Exhibit 4.6 to Registration Statement No. 33-35979),
incorporated herein by reference.
10(bb) 1995 Stock Incentive Plan, as amended March 3, 1998 (filed as
Exhibit A to Brush Wellman's Proxy Statement, dated March 16,
1998, Commission File No. 1-7006), incorporated herein by
reference.
II-14
<PAGE> 100
10(cc) Lease, dated as of October 1, 1996, between Brush Wellman Inc.
and Toledo-Lucas County Port Authority (filed as Exhibit 10(v)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.
10(dd) Master Lease Agreement, dated as of December 30, 1996, between
Brush Wellman Inc. and National City Bank acting for itself
and as agent for certain participants (filed as Exhibit 10(w)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.
10(ee) First Amendment to Master Lease Agreement, dated as of
September 2, 1997, between Brush Wellman Inc. and National
City Bank acting for itself and as agent for certain
participants (filed as Exhibit 10(ee) to Brush Wellman's Form
10-K Annual Report for the year ended December 31, 1998).
10(ff) Second Amendment to Master Lease Agreement and Amendment to
Disbursement Schedules, dated as of January 26, 1999, between
Brush Wellman Inc. and National City Bank acting for itself
and as agent for certain participants (filed as Exhibit 10(ff)
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
10(gg) 1997 Stock Incentive Plan for Non-Employee Directors (filed as
Exhibit B to Brush Wellman's Proxy Statement dated March 16,
1998, Commission File No. 1-7006), incorporated herein by
reference.
13(a) Annual report on Form 10-K of Brush Wellman Inc. for the
fiscal year ended December 31, 1998 (incorporated herein by
reference to such report as filed with the Securities and
Exchange Commission by Brush Wellman Inc., Securities and
Exchange Commission File 1-7006.)
13(b) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended April 2, 1999 (incorporated herein by
reference to such report as filed with the Securities and
Exchange Commission by Brush Wellman Inc., Securities and
Exchange Commission File 1-7006.)
13(c) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended July 2, 1999 (incorporated herein by
reference to such report as filed with the Securities and
Exchange Commission by Brush Wellman Inc., Securities and
Exchange Commission File 1-7006.)
13(d) Brush Wellman's Quarterly Report on Form 10-Q for the
quarterly period ended October 1, 1999 (incorporated herein by
reference to such report as filed with the Securities and
Exchange Commission by Brush Wellman Inc., Securities and
Exchange Commission File 1-7006.)
21 Subsidiaries of the registrant.
23(a) Consent of Ernst & Young LLP, independent public accountants.
23(b) Form of opinion and consent of Jones, Day, Reavis & Pogue
(incorporated by reference to Exhibit 5 hereto).
24 Power of Attorney for each director and officer of Brush
Engineered Materials Inc. signing this registration statement.
II-15
<PAGE> 101
27(a) Financial Data Schedule 1998 (filed as Exhibit 27.1 to Brush
Wellman's Form 10-K Annual Report for the year ended December
31, 1998), incorporated herein by reference.
27(b) Financial Data Schedule 1997 Restated (filed as Exhibit 27.2
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
27(c) Financial Data Schedule 1996 Restated (filed as Exhibit 27.3
to Brush Wellman's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.
99(a) Form of proxy card of Brush Wellman Inc.
99(b)** Consents of prospective directors of Brush Engineered
Materials Inc.
- ---------------------------
* To be filed by amendment.
** John Sherwin, Jr.'s consent to be filed by amendment.
II-16
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF THE REGISTRANT
------------------------------
The Registrant has only one subsidiary, Brush Merger Co., an Ohio
corporation, which is wholly-owned by the Registrant.
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) of Brush Engineered Materials Inc. and
related proxy statement/prospectus of Brush Wellman Inc. and Brush Engineered
Materials Inc. for the registration of shares of common stock of Brush
Engineered Materials Inc. and to the incorporation by reference therein of our
report dated January 26, 1999, with respect to the consolidated financial
statements and schedule of Brush Wellman Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.
We also consent to the incorporation by reference therein of our report dated
March 29, 1999 with respect to the financial statement schedule of Brush
Wellman Inc. for the years ended December 31, 1998, 1997 and 1996 included in
the Annual Report (Form 10-K) for the year ended December 31, 1998 filed with
the Securities and Exchange Commission.
Ernst & Young LLP
Cleveland, Ohio
February 1, 2000
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
------------------
DIRECTOR AND/OR OFFICER OF
BRUSH ENGINEERED MATERIALS INC.
REGISTRATION STATEMENT ON FORM S-4
POWER OF ATTORNEY
The undersigned director and/or officer of Brush Engineered Materials
Inc., an Ohio corporation (the "Corporation"), hereby constitutes and appoints
Gordon D. Harnett and John D. Grampa, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney of the undersigned,
for him or her and in his or her name, place and stead, to sign and file under
the Securities Act of 1933 one or more Registration Statement(s) on Form S-4
relating to the registration for sale of the Corporation's common shares,
without par value, and any and all amendments, supplements and exhibits thereto,
including pre-effective and post-effective amendments or supplements, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining to such registration(s), with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the act of
said attorneys and any of them and any such substitute.
EXECUTED as of January 31, 2000.
/s/ Gordon D. Harnett
------------------------------------------
Gordon D. Harnett
Chairman, President and Chief Executive
Officer
<PAGE> 2
POWER OF ATTORNEY
-----------------
DIRECTOR AND/OR OFFICER OF
BRUSH ENGINEERED MATERIALS INC.
REGISTRATION STATEMENT ON FORM S-4
POWER OF ATTORNEY
The undersigned director and/or officer of Brush Engineered Materials
Inc., an Ohio corporation (the "Corporation"), hereby constitutes and appoints
Gordon D. Harnett and John D. Grampa, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney of the undersigned,
for him or her and in his or her name, place and stead, to sign and file under
the Securities Act of 1933 one or more Registration Statement(s) on Form S-4
relating to the registration for sale of the Corporation's common shares,
without par value, and any and all amendments, supplements and exhibits thereto,
including pre-effective and post-effective amendments or supplements, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining to such registration(s), with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the act of
said attorneys and any of them and any such substitute.
EXECUTED as of January 31, 2000.
/S/ Michael C. Hasychak
-------------------------------------
Michael C. Hasychak
Vice President, Secretary and Treasurer
<PAGE> 1
EXHIBIT 99(a)
DETACH CARD
- -------------------------------------------------------------------------------
BRUSH WELLMAN INC. -- PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Gordon D. Harnett, or if he is unable or unwilling to
act, then Michael C. Hasychak, with full power of substitution, to vote and act
for and in the name of the undersigned as fully as the undersigned could vote
and act if personally present at the annual meeting of shareholders of Brush
Wellman Inc. to be held on May 2, 2000 and at any adjournment or postponement
thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN
PROPOSAL 1 AND RECOMMENDS VOTES "FOR" PROPOSALS 2 AND 3.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below (except as indicated to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for the nominees listed below
Nominees: Gordon D. Harnett, William P. Madar and David H. Hoag
Instruction: To withhold authority to vote for any nominees, write
those nominees' names in the space provided below.
-----------------------------------------------------------------------
2. CONFIRMING THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF BRUSH WELLMAN INC. AND BRUSH
ENGINEERED MATERIALS INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. REORGANIZATION OF BRUSH WELLMAN INC.'S CORPORATE STRUCTURE.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In accordance with his judgment upon any other matter properly
presented.
(CONTINUED, AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 2
DETACH CARD
- -------------------------------------------------------------------------------
PROXY NO. SHARES
(CONTINUED FROM THE OTHER SIDE)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF
DIRECTIONS ARE NOT INDICATED, WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS AND "FOR" PROPOSALS 2 AND 3.
Dated , 2000
-------------------------
------------------------------------
Signature
------------------------------------
Signature
------------------------------------
Title
NOTE: Please sign exactly
as the name appears hereon.
When signing as attorney,
executor, administrator,
trustee or guardian, please
add your title as such.
PLEASE SIGN, DATE AND RETURN YOUR VOTING CARD PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
<PAGE> 3
DETACH CARD
- ------------------------------------------------------------------------------
CONFIDENTIAL VOTING INSTRUCTIONS TO THE NORTHERN TRUST COMPANY,
TRUSTEE UNDER THE BRUSH WELLMAN INC. PAYSOP
Pursuant to section 6.8 of the Brush Wellman Inc. Savings and Investment Plan,
the undersigned, as a participant in the Plan, hereby directs the Trustee to
vote (in person or by proxy) all shares of Common Stock of Brush Wellman Inc.
credited to the undersigned's PAYSOP Contribution Account under the Plan on the
record date for the annual meeting of shareholders of Brush Wellman Inc. to be
held on May 2, 2000 and at any adjournment or postponement thereof, on the
following matters as checked below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN
PROPOSAL 1 AND RECOMMENDS VOTES "FOR" PROPOSALS 2 AND 3.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below (except as indicated to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for the nominees listed below
Nominees: Gordon D. Harnett, William P. Madar and David H. Hoag
Instructions: To withhold authority to vote for any nominees, write
those nominees' names in the space provided below.
-----------------------------------------------------------------------
2. CONFIRMING THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF BRUSH WELLMAN INC. AND BRUSH
ENGINEERED MATERIALS INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. REORGANIZATION OF BRUSH WELLMAN INC.'S CORPORATE STRUCTURE.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In accordance with his judgment upon any other matter properly
presented.
(CONTINUED, AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 4
DETACH CARD
(CONTINUED FROM THE OTHER SIDE)
PLEASE SIGN EXACTLY AS THE NAME APPEARS BELOW. THE TRUSTEE SHALL
NOT VOTE SHARES OF THE COMPANY FOR WHICH IT DOES NOT RECEIVE
INSTRUCTIONS.
THIS CONFIDENTIAL VOTING INSTRUCTIONS CARD WILL BE SEEN ONLY BY
AUTHORIZED PERSONNEL OF THE TRUSTEE. THE SHARES REPRESENTED BY THIS
CARD WILL BE VOTED AS DIRECTED, OR IF DIRECTIONS ARE NOT INDICATED
BUT THIS CARD IS EXECUTED AND RETURNED, WILL BE VOTED "FOR" THE
ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3.
Dated , 2000
-------------------------
------------------------------------
Signature
------------------------------------
Signature
------------------------------------
Title
NOTE: Please sign exactly
as the name appears hereon.
When signing as attorney,
executor, administrator,
trustee or guardian, please
add your title as such.
PLEASE SIGN, DATE AND RETURN YOUR VOTING CARD PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
<PAGE> 5
DETACH CARD
- -------------------------------------------------------------------------------
CONFIDENTIAL VOTING INSTRUCTIONS TO THE NORTHERN TRUST COMPANY,
TRUSTEE UNDER THE BRUSH WELLMAN INC. SAVINGS AND INVESTMENT PLAN.
Pursuant to section 6.8 of the Brush Wellman Inc. Savings and Investment Plan,
the undersigned, as a participant in the Plan, hereby directs the Trustee to
vote (in person or by proxy) all shares of Common Stock of Brush Wellman Inc.
credited to the undersigned's account (other than shares credited under the
PAYSOP Contribution Account) under the Plan on the record date for the annual
meeting of shareholders of Brush Wellman Inc. to be held on May 2, 2000 and at
any adjournment or postponement thereof, on the following matters as checked
below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN
PROPOSAL 1 AND RECOMMENDS VOTES "FOR" PROPOSALS 2 AND 3.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below (except as indicated to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for the nominees listed below
Nominees: Gordon D. Harnett, William P. Madar and David H. Hoag
Instructions: To withhold authority to vote for any nominees, write
those nominees' names in the space provided below.
-----------------------------------------------------------------------
2. CONFIRMING THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF BRUSH WELLMAN INC. AND BRUSH
ENGINEERED MATERIALS INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. REORGANIZATION OF BRUSH WELLMAN INC.'S CORPORATE STRUCTURE.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In accordance with his judgment upon any other matter properly
presented.
(CONTINUED, AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 6
DETACH CARD
- -------------------------------------------------------------------------------
(CONTINUED FROM THE OTHER SIDE)
PLEASE SIGN EXACTLY AS THE NAME APPEARS BELOW. THE TRUSTEE SHALL
VOTE SHARES OF THE COMPANY FOR WHICH IT DOES NOT RECEIVE
INSTRUCTIONS IN THE SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH
IT RECEIVES VOTING INSTRUCTIONS.
THIS CONFIDENTIAL VOTING INSTRUCTIONS CARD WILL BE SEEN ONLY BY
AUTHORIZED PERSONNEL OF THE TRUSTEE. THE SHARES REPRESENTED BY THIS
CARD WILL BE VOTED AS DIRECTED, OR IF DIRECTIONS ARE NOT INDICATED
BUT THIS CARD IS EXECUTED AND RETURNED, WILL BE VOTED "FOR" THE
ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3.
Dated , 2000
-------------------------
------------------------------------
Signature
------------------------------------
Signature
------------------------------------
Title
NOTE: Please sign exactly
as the name appears hereon.
When signing as attorney,
executor, administrator,
trustee or guardian, please
add your title as such.
PLEASE SIGN, DATE AND RETURN YOUR VOTING CARD PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
<PAGE> 1
Exhibit 99(b)
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ William P. Madar
-------------------------------
William P. Madar, Director
<PAGE> 2
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ David H. Hoag
-------------------------------
David H. Hoag, Director
<PAGE> 3
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ Albert C. Bersticker
-------------------------------
Albert C. Bersticker, Director
<PAGE> 4
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ Dr. Charles F. Brush, III
-------------------------------
Charles F. Brush, Director
<PAGE> 5
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ David L.Burner
-------------------------------
David L. Burner, Director
<PAGE> 6
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ Joseph P. Keithley
-------------------------------
Joseph P. Keithley, Director
<PAGE> 7
BRUSH ENGINEERED MATERIALS INC.
Consent of Prospective Director
-------------------------------
The undersigned hereby consents to be named as a prospective director of
Brush Engineered Materials Inc. (the "Registrant") in the Registration
Statement on Form S-4 of the Registrant relating to the Registrant's common
stock, without par value, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
EXECUTED as of February 1, 2000
/s/ William R. Robertson
-------------------------------
William R. Robertson, Director
