Exhibit 99.1
[OREMET Titanium Letterhead]
October __, 1997
To Our Shareholders:
We are pleased to inform you that Oregon Metallurgical Corporation (the
"Company") adopted a Rights Agreement. After careful consideration, the Board of
Directors determined that adopting the Rights Agreement would preserve, for all
shareholders, the long-term value of their investment in the Company. The Rights
Agreement will not prevent a purchase of the Company on terms that are fair and
in the best interest of the shareholders but will discourage coercive or
inadequate takeover attempts. A number of U.S. companies have adopted share
purchase rights plans similar to the Rights Agreement in an effort to make sure
all shareholders receive a fair price and are treated equally in a takeover. The
Rights Agreement was not adopted in response to any takeover attempt directed at
the Company.
In connection with the Rights Agreement, on December 12, 1996, the
Board of Directors declared a dividend of a right to purchase one-fifth of a
share of common stock, par value $1.00 ("Common Share") and a note for each
Common Share of the Company outstanding on January 3, 1997. On April 24, 1997,
the Company's Restated Articles of Incorporation were amended to increase the
number of authorized Common Shares from 25 million to 80 million. On July 24,
1997, the Board of Directors amended the Rights Agreement to replace the right
with the right to purchase one Common Share (the "Right"). The Rights are issued
subject to the terms of the Rights Agreement dated December 12, 1996, and
amended July 24, 1997, between the Company and ChaseMellon Shareholder Services,
LLC, as Rights Agent.
Under the Rights Agreement, the Rights will initially be evidenced by
and traded with the common stock and will not be exercisable. In the absence of
further Board action, the Rights will generally become exercisable upon the
occurrence of certain hostile takeover-related events, including the acquisition
of 20% of the Company's outstanding common stock without approval of the Board
of Directors of the Company. Once exercisable, the Rights entitle holders to
purchase common stock of the Company at a 50% discount. The Rights held by
persons whose common stock ownership exceeds 20% (or 15% in some cases) will be
void. Under certain circumstances, the Rights will entitle the holder to
purchase shares of capital stock of an acquiring entity at a 50% discount.
The Rights are redeemable by the Board of Directors of the Company for
a price of $.01 per right at any time prior to the time they become exercisable.
The Rights will expire on December 11, 2006, unless redeemed, exchanged or
amended by the Board of Directors subsequent to that time.
The issuance of the Rights is not a taxable event to the Company or the
shareholders. A summary of the Rights is enclosed. We urge you to review the
summary carefully and to retain a copy for your records.
In adopting the Rights Agreement, the Board of Directors has determined
that you, our shareholders, be given every opportunity to participate fully in
the future of the Company. We look forward to our continued relationship with
you as a shareholder of Oregon Metallurgical Corporation.
Sincerely,
Xxxxxx X. Xxxxxxx
Chairman of the Board, President
and Chief Executive Officer
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