AEL INDUSTRIES, INC.
VOTING TRUST AGREEMENT
This AEL Industries, Inc. Voting Trust Agreement ("Voting Trust
Agreement") is made as of the 28th day of February, 1995 by and among AEL
Industries, Inc., a Pennsylvania corporation (the "Corporation"), Dr. Leon
Riebman and Claire E. Riebman (collectively the "Riebmans") and Francis J.
Dunleavy, Frederick R. Einsidler, Conrad J. Fowler and Leeam Lowin, as
voting trustees (collectively, the "Voting Trustees").
Background
A. This is the Voting Trust Agreement referred to in Section
II of an agreement dated the date hereof by and among the Corporation and
the Riebmans ("Agreement").
B. The sole purpose of this Voting Trust Agreement is to
enable the Voting Trustees (i) to vote the Existing Class A Shares and the
Class B Shares (as defined herein) in favor of a Qualifying Business
Combination which has been recommended by the LRPC and submitted in a
Proposal for Shareholder Approval and (ii) to vote for the election of
directors of the Company, all in accordance with the terms and provisions
of this Voting Trust Agreement.
C. All terms defined in the Agreement shall have the same
meaning when used herein and capitalized unless the context clearly
indicates otherwise.
NOW, THEREFORE, in consideration of the premises and for the
purposes set forth above and the covenants of the parties included herein
and intending to be legally bound hereby, the Corporation, the Riebmans and
the Voting Trustees agree as follows:
1. The Riebmans have concurrently deposited the certificates
representing (a) all of the shares of Class A Stock currently owned by them
and listed below their signatures at the end of this Voting Trust Agreement
(the "Existing Class A Shares"), and (b) the Contingent Shares (the
Existing Class A Shares and the Contingent Shares shall be collectively
referred to as the "Class A Shares"), with proper transfers thereof in
favor of the Voting Trustees, with the Voting Trustees and have received in
exchange therefor Voting Trust Certificates as provided below. The Class A
Shares represented by the stock certificates so deposited shall be trans-
ferred on the books of the Corporation to the name of the Voting Trustees
and shall be maintained by the Voting Trustees in the "Class A Voting
Trust."
2. The Riebmans have concurrently deposited the certificates
representing all of the shares of Class B Stock owned by them and listed
below their signatures at the end of this Voting Trust Agreement (the
"Class B Shares," and together with the Class A Shares, the "Shares"),
with proper transfers thereof in favor of the Voting Trustees, with the
Voting Trustees and have received in exchange therefor a Voting Trust
Certificate as provided below. The Class B Shares represented by the stock
certificates so deposited shall be transferred on the books of the
Corporation to the name of the Voting Trustees and shall be maintained by
the Voting Trustees in the "Class B Voting Trust."
3. The Voting Trustees shall be Voting Trustees with respect to
both the Class A Voting Trust and the Class B Voting Trust (collectively,
the "Voting Trusts").
4. Subject to the provisions of Paragraphs 5 and 6 hereof,
while this Voting Trust Agreement is in effect, the Voting Trustees shall
have the legal title to the Shares, and be entitled to exercise, in person
or by their nominee or proxy, all rights and powers in respect to any and
all such Shares by voting the shares and taking part in or consenting to
any action of Shareholders for the election of directors or in favor of a
Qualifying Business Combination which has been recommended by the LRPC and
submitted in a Proposal for Shareholder Approval. With respect to any
action of the Shareholders other than in connection with the election of
directors or a Qualifying Business Combination which has been recommended
by the LRPC and submitted in a Proposal for Shareholder Approval, the
Voting Trustees shall vote (which shall include action by written consent)
the Existing Class A Shares and the Class B Shares as directed in writing
by the Riebmans; provided, however, in no event shall the Voting Trustees
be required to vote (which shall include action by written consent) the
Existing Class A Shares or Class B Shares in a manner which is not consis-
tent with the effectuation of the purpose of this Voting Trust Agreement as
described in Paragraph B of the Background hereof.
5. The Voting Trustees agree that in connection with a Proposal
the Voting Trustees shall vote the Contingent Shares in the same proportion
as the votes cast with respect to the Proposal by the other holders of
shares of Class A Stock.
6. The Voting Trustees shall vote for the election of two (2)
persons nominated by Dr. Riebman or his personal representatives as
directors of the Company. The Voting Trustees shall vote for the
reelection as directors of the incumbent directors of the Company unless
one or more of them determines not to seek re-election, resigns or dies.
The Voting Trustees shall consult with the Riebmans prior to voting for the
election of any other person as a director of the Company. The Voting
Trustees shall respectively assure that at all times a majority of the
directors of the Company shall be "Independent Directors" (which term shall
for the purposes of the Agreement and this VT Agreement mean a person who
(i) is not an employee of or consultant to the Company; (ii) is not related
by blood or marriage to either of the Riebmans; and (iii) in the reasonable
determination of the LRPC, does not have a financial or other material
relationship with either of the Riebmans which might influence the
objectivity of his or her judgment as it relates to the best interests of
the Company and the Shareholders). The Riebmans in their capacity as
directors of the Company shall take such action as is appropriate to give
effect to the foregoing sentence. In no event shall the Voting Trustees
vote (which shall include action by written consent) the Shares in a manner
which is not consistent with the effectuation of the purpose of this Voting
Trust Agreement as described in Paragraph B of the Background hereof.
7. The Voting Trustees shall issue to the Riebmans Voting Trust
Certificates in respect of the Shares in substantially the form of Exhibits
1, 2 and 3 hereto. While this Voting Trust Agreement is in effect, the
holders of Voting Trust Certificates shall not have any right, either under
said Voting Trust Certificates or under this Voting Trust Agreement, or
under any agreement express or implied, or otherwise, with respect to any
Shares held by the Voting Trustees hereunder to vote such Shares or to take
part in or consent to any action of Shareholders, or to do or perform any
other act or thing relating to voting power which the holders of the
Corporation's Class A Stock or Class B Stock are now or may hereafter
become entitled to do or perform; provided, however, that the holders of
Voting Trust Certificates, excluding the holders of Voting Trust
Certificates issued with respect to the Contingent Shares, shall be enti-
tled to receive payments of all dividends other than pro rata distributions
of additional shares of capital stock of the Corporation declared by the
Corporation with respect to the Shares. With respect to the Contingent
Shares, the Voting Trustees shall take possession of all dividends other
than pro rata distributions of additional shares of capital stock of the
Corporation declared by the Corporation with respect to the Shares and
shall cause all such dividends to be distributed as provided in Paragraph
11 with respect to the distribution of the Contingent Shares. All stock
distributions shall be issued in the name of the Voting Trustees as
additional Existing Class A Shares, Contingent Shares and Class B Shares
hereunder and the Voting Trustees shall issue additional Voting Trust
Certificates therefor to the Riebmans.
8. Upon the declaration of any cash dividends by the Corpo-
ration with respect to the Existing Class A Shares or the Class B Shares
the Voting Trustees shall cause all such dividends to be distributed by the
Corporation to the holders of the voting trust certificates issued with
respect to the Existing Class A Shares or the Class B Shares as if such
holders themselves held the Shares represented by their Voting Trust
Certificates. Upon the declaration of any cash dividends by the Corpo-
ration with respect to the Contingent Shares, the Voting Trustees shall
take possession of all such dividends and shall cause all such dividends to
be distributed as provided in Paragraph 11 with respect to the distribution
of the Contingent Shares.
9. The term of this Voting Trust Agreement shall be coextensive
with the term of the Agreement.
10. During the term hereof, without the prior written consent of
the Corporation and the Voting Trustees, the Riebmans agree that they will
not transfer or agree to transfer (a) any interest in any Class A Stock or
Class B Stock owned by either of them or (b) their respective beneficial
interests evidenced by the Voting Trust Certificates; provided, however,
that the executors of the estate of either of the Riebmans may succeed to
such interests and shall be bound by this Voting Trust Agreement; and
provided further that the Riebmans may make donative transfers of such
interests to and among themselves or to their issue so long as the donee(s)
thereof agree(s) in writing to be bound by this Voting Trust Agreement.
During the term hereof, the Riebmans agree that neither of them will
acquire any additional shares of Class A Stock or Class B Stock except in
connection (i) with the exercise of options existing on the date hereof or
(ii) the beneficial ownership of shares of Class A Stock or Class B Stock
issued in respect of stock dividends or stock distributions hereafter de-
clared; the Riebmans shall deliver the certificates representing any such
additional shares so acquired to the Voting Trustees for deposit in the
applicable Voting Trust in exchange for Voting Trust Certificates.
11. Upon the termination of this Voting Trust Agreement certifi-
cates representing the Existing Class A Shares and Class B Shares deposited
hereunder shall be delivered by the Voting Trustees to the holder(s) of the
Voting Trust Certificates issued with respect to the Existing Class A
Shares and Class B Shares in the proportion of their respective holdings,
upon presentation and surrender to the Voting Trustees of the Voting Trust
Certificates therefor. Upon the earliest to occur of the following events,
certificates representing the Contingent Shares deposited hereunder shall
be delivered by the Voting Trustees to the person or persons designated
below:
(a) Immediately prior to the Closing under a Qualifying
Business Combination included in the Proposal as to which Shareholder
Approval has been obtained in which event the delivery shall be made to the
holder(s) of the Voting Trust Certificate(s) issued with respect to the
Contingent Shares in proportion to their respective holdings.
(b) The expiration or termination of the Agreement for a
reason other than as contemplated in subparagraph (a) of this Paragraph 11
in which event the delivery shall be made to the Corporation which shall
thereupon cancel the Contingent Shares without the payment of any consid-
eration therefor;
(c) The receipt by the Voting Trustees of joint written in-
structions from the Riebmans and the Corporation, in which event the
delivery shall be made to the person or persons designated in such in-
structions; or
(d) Receipt by the Voting Trustees of a certified copy of a
final non-appealable order by a court of competent jurisdiction providing
for the disposition thereof, in which event the delivery shall be made to
the person or persons designated therein.
12. The Voting Trustees may serve as directors, officers,
employees or consultants of the Corporation and be compensated therefor,
and may hold stock in the Corporation or become a creditor of the
Corporation or otherwise deal with it in good faith.
13. Except as provided in Paragraph 5, in voting the Shares
deposited hereunder, the Voting Trustees shall act by majority vote;
provided, however, if at any time there exist less than three (3) Voting
Trustees, all acts of the Voting Trustees shall require the unanimous vote
of the Voting Trustees. At such time as any of the Voting Trustees ceases
to be a member of the LRPC for any reason whatsoever, such Voting Trustee
thereupon shall cease to be a Voting Trustee hereunder. In the event any
substitute member or members of the LRPC shall be subsequently appointed by
the Board, such member or members shall thereupon become a Voting Trustee
or Trustees under this Voting Trust Agreement.
14. In voting the Shares deposited hereunder, the Voting Trust-
ees agree to perform their duties in good faith, in a manner each
reasonably believes to be in the best interests of the Corporation and the
Shareholders and with such care, including reasonable inquiry, skill and
diligence, as a person with ordinary prudence would use under similar
circumstances. No Voting Trustee shall be liable for any acts or omissions
taken or omitted in compliance with Paragraphs 5 and 6 and this Paragraph
13. No Voting Trustee shall be responsible for any act or omission by any
predecessor or successor Voting Trustee.
15. The Voting Trustees shall serve hereunder without compensa-
tion. The Voting Trustees shall have the right to incur and pay such
reasonable expenses and charges and to employ and pay such agents,
attorneys and counsel as they may deem necessary and proper. Any such
expenses or charges incurred by and due to the Voting Trustees will be paid
by the Corporation. The Corporation shall indemnify the Voting Trustees
against all costs, charges, expenses, loss, liability and damage incurred
by them in the administration of the Voting Trusts or in the exercise of
any power conferred upon the Voting Trustees by this Voting Trust Agree-
ment.
16. In the event of a breach or threatened breach of any
provision in this Voting Trust Agreement, in addition to any and all other
legal and equitable remedies which may be available, any party hereto may
specifically enforce the terms of this Voting Trust Agreement and may
obtain temporary or permanent injunctive relief without the necessity of
proving actual damage by reason of any such breach or threatened breach.
17. The term "Trustee" as used in this Voting Trust Agreement
shall apply equally to the Voting Trustees named herein and to their
successors hereunder.
18. The Voting Trustees by executing this Voting Trust Agreement
accept the Voting Trusts herein created.
19. The Corporation by executing this Voting Trust Agreement
consents to all the terms and conditions hereof, and agrees that it will
take all action necessary or appropriate for carrying out the terms hereof.
20. All communications provided for in this Voting Trust Agree-
ment shall be in writing and shall be sent to each party as follows:
To The Corporation:
AEL Industries, Inc.
305 Richardson Road
Lansdale, PA 19446
Attention: John R. Cox, Esquire
General Counsel
Fax 215-822-6056
To the Voting Trustees:
Francis J. Dunleavy
560 Morris Road, Box 208
Blue Bell, PA 19422
Fax 215-643-9275
Frederick R. Einsidler
99 South Park Avenue, Apt. 109
Rockville Centre, NY 11570
Fax 516-536-6505
Conrad J. Fowler
826 North Fairway Road
Glenside, PA 19038
Fax 215-887-3293
Leeam Lowin
21 Fox Run Lane
Greenwich, CT 06831
Fax 203-661-6258
With a copy to:
Vincent F. Garrity, Jr., Esquire
Duane, Morris & Heckscher
One Liberty Place
Philadelphia, PA 19103
Fax 215-979-1020
To the Riebmans
Dr. & Mrs. Leon Riebman
1380 Barrowdale Road
Rydal, PA 19046
Fax 215-885-2238 (telephone first)
With a copy to:
Abraham H. Frumkin, Esquire
Eckert Seamans Cherin & Mellott
1700 Market Street
Suite 3232
Philadelphia, PA 19103
Fax 215-575-6015
or to such other address as such party may hereafter specify in writing,
and shall be deemed given on the earlier of (a) physical delivery, (b) if
given by facsimile transmission, when such facsimile is transmitted to the
telephone number specified in this Voting Trust Agreement and telephone
confirmation of receipt thereof is received, (c) three days after mailing
by prepaid first class mail and (d) one day after transmittal by prepaid
overnight courier.
21. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision. A
court of competent jurisdiction may reduce or limit the scope or
application of any provision hereof in order to make such provision
enforceable.
22. This Voting Trust Agreement may be executed in several
counterparts each of which shall be deemed an original, but all of which
taken together shall constitute one and the same document.
23. This Voting Trust Agreement may be amended or rescinded only
by written instrument signed by the Corporation, the Riebmans and by the
same number of Voting Trustees whose vote would be required at the time
pursuant to Paragraph 13 hereof as if the Voting Trustees were voting the
shares deposited hereunder.
24. The Voting Trustees shall file a copy of this Voting Trust
Agreement in the registered office of the Corporation.
25. This Voting Trust Agreement supersedes any prior negotia-
tions and understandings and constitutes the entire agreement between the
parties with regard to its subject matter. The recitals contained in the
Background of this Voting Trust Agreement are an integral part of this
Voting Trust Agreement.
26. This Voting Trust Agreement shall be binding upon, and inure
to the benefit of, the Corporation and its successors and the Riebmans and
their heirs and personal representatives.
27. This Voting Trust Agreement shall be governed by, and
construed and enforced in accordance with the internal laws of the
Commonwealth of Pennsylvania without giving effect to conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed or caused
this Voting Trust Agreement to be executed as of the date first written
above.
AEL INDUSTRIES, INC.
By: /s/ George King
Name: George King
Title: Vice President
/s/ Francis J. Dunleavy /s/ Conrad J. Fowler
Francis J. Dunleavy, Conrad J. Fowler,
Voting Trustee Voting Trustee
/s/ Frederick R. Einsidler /s/ Leeam Lowin
Frederick R. Einsidler, Leeam Lowin,
Voting Trustee Voting Trustee
Signature of Shareholder
/s/ Dr. Leon Riebman
Dr. Leon Riebman
/s/ Claire E. Riebman
Claire E. Riebman
Number of Shares Deposited
Existing Class A Shares: 10,646
Class B Shares: 241,262
Contingent Shares: 180,947
EXHIBIT 1
AEL INDUSTRIES, INC.
Voting Trust Certificate
No. 1 10,646 Shares of
Class A Common Stock
This certifies that Dr. Leon and Mrs. Claire E. Riebman
have deposited 10,646 shares of Class A Common Stock of AEL
INDUSTRIES, INC. (the "Corporation"), a Pennsylvania corporation,
with the undersigned Voting Trustees, under the AEL Industries,
Inc. Voting Trust Agreement dated as of February __, 1995, among
the Corporation, the Voting Trustees and Dr. Leon Riebman and
Claire E. Riebman ("VT Agreement") a copy of which will be fur-
nished to the holder hereof without charge upon written request
therefor to the Voting Trustees.
This Certificate has not been registered under the
Securities Act of 1933, as amended, and may not be sold or other-
wise transferred unless (a) covered by an effective registration
statement under the Securities Act of 1933, as amended, or (b)
the Voting Trustees and the Corporation have been furnished with
an opinion of counsel satisfactory to them to the effect that no
registration is legally required for such transfer.
The holder of this Certificate takes the same subject to
all terms and conditions of the VT Agreement and is bound by and
entitled to the benefit of such Voting Trust Agreement.
THE TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED AS
PROVIDED IN THE VT AGREEMENT.
IN WITNESS WHEREOF, the Voting Trustees have signed this
Certificate as of this __ day of February, 1995.
______________________________________
Francis J. Dunleavy, Voting Trustee
______________________________________
Frederick R. Einsidler, Voting Trustee
______________________________________
Conrad J. Fowler, Voting Trustee
______________________________________
Leeam Lowin, Voting Trustee
EXHIBIT 2
AEL INDUSTRIES, INC.
Voting Trust Certificate
No. 2 241,262 Shares of
Class B Common Stock
This certifies that Dr. Leon and Mrs. Claire E. Riebman
have deposited 241,262 shares of Class B Common Stock of AEL
INDUSTRIES, INC. (the "Corporation"), a Pennsylvania corporation,
with the undersigned Voting Trustees, under the AEL Industries,
Inc. Voting Trust Agreement dated as of February __, 1995, among
the Corporation, the Voting Trustees and Dr. Leon Riebman and
Claire E. Riebman ("VT Agreement") a copy of which will be fur-
nished to the holder hereof without charge upon written request
therefor to the Voting Trustees.
This Certificate has not been registered under the
Securities Act of 1933, as amended, and may not be sold or other-
wise transferred unless (a) covered by an effective registration
statement under the Securities Act of 1933, as amended, or (b)
the Voting Trustees and the Corporation have been furnished with
an opinion of counsel satisfactory to them to the effect that no
registration is legally required for such transfer.
The holder of this Certificate takes the same subject to
all terms and conditions of the VT Agreement and is bound by and
entitled to the benefit of such Voting Trust Agreement.
THE TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED AS
PROVIDED IN THE VT AGREEMENT.
IN WITNESS WHEREOF, the Voting Trustees have signed this
Certificate as of this __ day of February, 1995.
______________________________________
Francis J. Dunleavy, Voting Trustee
______________________________________
Frederick R. Einsidler, Voting Trustee
______________________________________
Conrad J. Fowler, Voting Trustee
______________________________________
Leeam Lowin, Voting Trustee
EXHIBIT 3
AEL INDUSTRIES, INC.
Voting Trust Certificate
No. 3 180,947 Shares of
Class A Common Stock
This certifies that Dr. Leon and Mrs. Claire E. Riebman
have deposited 180,947 shares of Class A Common Stock of AEL
INDUSTRIES, INC. (the "Corporation"), a Pennsylvania corporation,
with the undersigned Voting Trustees, under the AEL Industries,
Inc. Voting Trust Agreement dated as of February __, 1995, among
the Corporation, the Voting Trustees and Dr. Leon Riebman and
Claire E. Riebman ("VT Agreement") a copy of which will be fur-
nished to the holder hereof without charge upon written request
therefor to the Voting Trustees.
This Certificate has not been registered under the
Securities Act of 1933, as amended, and may not be sold or other-
wise transferred unless (a) covered by an effective registration
statement under the Securities Act of 1933, as amended, or (b)
the Voting Trustees and the Corporation have been furnished with
an opinion of counsel satisfactory to them to the effect that no
registration is legally required for such transfer.
The holder of this Certificate takes the same subject to
all terms and conditions of the VT Agreement and is bound by and
entitled to the benefit of such Voting Trust Agreement.
THE TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED AS
PROVIDED IN THE VT AGREEMENT.
IN WITNESS WHEREOF, the Voting Trustees have signed this
Certificate as of this __ day of February, 1995.
______________________________________
Francis J. Dunleavy, Voting Trustee
______________________________________
Frederick R. Einsidler, Voting Trustee
______________________________________
Conrad J. Fowler, Voting Trustee
______________________________________
Leeam Lowin, Voting Trustee