<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission file number 0-663
OGLEBAY NORTON COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 34-0158970
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 Superior Avenue, Cleveland, Ohio 44114-2598
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code (216) 861-3300
Securities registered pursuant to Section 12(g) of the Act:
Common Stock Rights to Purchase
$1 Par Value Preferred Stock
------------ ---------------
Shares of Common Stock with associated Rights to Purchase Preferred Stock
outstanding at March 7, 1994: 2,498,776
The aggregate market value of voting stock held by non-affiliates of the
Registrant at March 7, 1994 (based upon excluding the total number of shares
reported under Item 12 hereof) was $37,584,984.
Portions of the following documents are incorporated by reference:
Proxy Statement for 1994 Annual Meeting of Stockholders (Part III)
The Exhibit Index is located herein beginning at sequential page _____.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No _______.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [x]
<PAGE> 2
PART I
ITEM 1. BUSINESS
A. GENERAL - INDUSTRY SEGMENTS
The Registrant, which was incorporated in Delaware in 1931, its
wholly owned subsidiaries and its predecessor organizations have been engaged
in the transportation, mining and sale of industrial minerals, iron ore and
coal since 1854. The principal offices of the Registrant are located at 1100
Superior Avenue, Cleveland, Ohio 44114-2598.
The information regarding the approximate amounts of consolidated
sales and revenues (including sales commissions, royalties and management
fees), consolidated profit from operations and consolidated identifiable assets
for the three years ended December 31, 1993, attributable to each of the
Registrant's industry segments, appears on pages 39 through 42 of this Annual
Report on Form 10-K.
B. PRINCIPAL PRODUCTS AND SERVICES
1. MARINE TRANSPORTATION
The Registrant, through its Columbia Transportation Division and
Pringle Transit Company, a wholly owned subsidiary, operates self-unloading
vessels engaged in the transportation of iron ore, coal, limestone and other
dry bulk cargo on the Great Lakes.
The self-unloader fleet consists of fifteen (15) vessels, of which
thirteen (13) are operated by the Columbia Transportation Division and two (2)
are operated by Pringle Transit Company. The Registrant has commenced steps to
transfer the Pringle operations to its Columbia Transportation Division and
anticipates the transfer to be completed early in the second quarter.
Twelve (12) of the vessels are owned by the Registrant and three (3)
are leased as described below. The vessels' cargo capacities range in size
from 13,500 tons to 60,000 tons. The newest vessel was commissioned in 1981
and the oldest in 1925. The relatively long life of Great Lakes vessels is due
to a scheduled program of regular winter maintenance and periodic rebuilding
and to the lack of corrosion because of freshwater operations.
One of the owned vessels, the "Columbia Star", a 1000-foot Great
Lakes self-unloading bulk carrier, has been financed through the use of bonds
issued pursuant to Title XI of the Merchant Marine Act of 1936, as amended.
See
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Note F of the Notes to Consolidated Financial Statements for disclosure of
financial data with respect to these bonds.
One leased vessel, the Wolverine, is leased and operated by the
Registrant under a bareboat charter agreement which expires in 1999 and is
renewable thereafter for up to ten years. The agreement provides an option to
purchase the equity position in the vessel on the charter hire payment date in
each year and an option to purchase the vessel at the end of the charter
period. The two other leased vessels, the Roesch and the Thayer, are leased
and operated by Pringle Transit Company under bareboat subcharter and charter
agreements which expire in 1998 and provide options to purchase the vessels at
the end of the subcharter and charter terms, respectively.
The standard annual Great Lakes vessel season of navigation is 260
days. In 1993, the Registrant operated eleven (11) vessels during the season.
The Registrant's fleet carried approximately 3% more tons of commodities than
in 1992.
2. INDUSTRIAL MINERALS
IRON ORE
The Registrant held iron ore mining rights located near Eveleth,
Minnesota, which were assigned in exchange for an overriding royalty to Eveleth
Taconite Company ("Taconite Company") and Eveleth Expansion Company ("Expansion
Com- pany"), in which the Registrant and its wholly owned subsidiary, ONCO
Eveleth Company, hold 15% and 20.5% interests, respectively ("Eveleth Mines").
The Eveleth Mines reserves are sufficient to support the normal level of
operations for 40 years. The Registrant also has a contract to serve, on a fee
basis, as Manager of the Eveleth Mines operations.
In addition to the mine, the Eveleth facility consists of a
concentrating and pellet production plant, located approximately eight miles
south of the mine. In 1993, 3,138,945 long tons of taconite pellets were
produced. The Registrant sold its share of Eveleth pellets, approximately
700,000 long tons, under contracts or on the open market.
Eveleth Mines is a cost-sharing operation. The basic agreements,
entered into as of December 1, 1974, govern the operation for the life of the
mine. Under the basic agreements, Eveleth Mines is required to operate at full
capacity, with participants sharing fixed and variable costs in proportion to
their respective equity interests. These agreements were modified, effective
as of January 1,
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1991, to permit the participants greater production flexibility and to alter
the cost-sharing arrangements through December 31, 1996. Under the modified
agreements, each of the participants pays fixed costs in proportion to its
equity interest and variable costs in proportion to the amount of iron ore
nominated by it.
Eveleth Mines reached agreement on a new labor contract with the
United Steelworkers of America in the fourth quarter of 1993. The agreement,
which has been ratified by the work force, will expire on August 1, 1999.
One of the participants, with a 35% equity interest, has not taken
any iron ore from Eveleth Mines since September 1992. That participant
continues to pay its share of fixed costs. Preliminary discussions have been
held regarding that participant's possible exit from Eveleth Mines. No
agreement has been reached regarding the terms or timing of any such exit.
Until those terms have been set, it is impossible to predict how any such exit
might affect the continued viability of Eveleth Mines.
INDUSTRIAL SANDS
The Registrant has three wholly owned subsidiaries engaged in the
production of industrial sands. These subsidiaries are listed in the
following table.
<TABLE>
<CAPTION>
Minimum
Subsidiary or Division Current Capacity Years of
Name and Location Products (tons in 1000's) Reserves(1)
- ---------------------- -------- ---------------- --------
<S> <C> <C> <C>
California Silica Construction, 550 17.4
Products Company Golf Course and
San Juan Capistrano, Stucco Sand
California
Central Silica Company Glass, Foundry 780 35.2(2)
Zanesville, Ohio and Pulverized
Sand
Texas Mining Company Fracture and 1,240 50.1(3)
Brady, Texas Pulverized Sand
<FN>
(1) Based on full production at current rated annual capacity.
(2) The increase in the minimum years of reserves from prior years is due to
acquisition of additional reserves.
(3) The decrease in the minimum years of reserves from prior years is due to a
recalculation of the ore deposit's recoverable tonnage.
</TABLE>
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<PAGE> 5
The Registrant's three silica sand subsidiaries produced
approximately 1,265,650 tons of sand in 1993.
The finished products produced by the Registrant's industrial sand
business move by truck and rail to consumers.
3. MANUFACTURING
The Registrant's manufacturing operations consist of the design,
manufacturing and marketing of hot topping products and continuous casting
refractories used in molten steel processing and the custom blending of
metallurgical powders used in the treatment of molten steel. The briquetting
plant produces fluorspar briquettes and dries fluorspar purchased from Mexico.
The following subsidiaries and two divisions make up the Registrant's
manufacturing operations.
Ferro Engineering Division(1)
Cleveland, Ohio
Canadian Ferro Hot Metal Specialties Limited(2)
Hamilton, Ontario, Canada
Indiana Manufacturing Company Inc.(2)
Dunkirk, Indiana
Tuscarawas Manufacturing Company(2)
Uhrichsville, Ohio
West Minerals Division
ONCO Minerals, Inc.(2)
Warren, Ohio
Brownsville Briquetting Plant(1)
Brownsville, Texas
(1) A division of the Registrant.
(2) A wholly owned subsidiary of the Registrant.
Canadian Ferro Hot Metal Specialties Limited, Indiana
Manufacturing Company Inc., ONCO Minerals, Inc. and Tuscarawas Manufacturing
Company own the plants and properties on which the plants are located. The
Registrant owns the Ferro Engineering Division plant site in Cleveland, Ohio.
The Brownsville plant is held under a lease which expires July 31, 1999.
4. OTHER
The Registrant owns a coal transfer facility at Ceredo, West
Virginia, on the Ohio River. This facility transferred 4,137,071 tons of coal
in 1993, which is approximately 27% less than 1992 due to a nine-month,
nationwide strike by the United Mine Workers of America
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<PAGE> 6
during 1993. The Registrant has entered into an agreement for the sale of this
facility which, subject to the fulfillment of certain conditions, will be
concluded in the third quarter of 1994.
The Registrant sold substantially all of the assets of its
Licking River Terminal facility located at Wilder, Kentucky, to Newport Steel
Corporation on December 31, 1993. This facility had not operated since July
1992.
The Registrant's wholly owned subsidiary, National Perlite
Products Company, became inactive as of January 31, 1994. Prior to the
cessation of operations, National Perlite had not been mining perlite ore from
its reserves near Malad City, Idaho. It had continued to expand perlite until
its closure.
C. COMPETITION
The Registrant experiences intense competition in all of its business
segments from both foreign and domestic companies with which it competes in
supplying products and services or which offer alternative choices as to modes
of transportation. Vessel rates are an important factor as to the ability of
the Registrant's Great Lakes fleet to compete with other independent and
captive fleets, railroads and other providers of surface transportation. The
Registrant believes that product quality, differentiation and customer service
are significant competitive considerations for all of its business segments.
D. ENVIRONMENTAL, HEALTH AND SAFETY CONSIDERATIONS
The Registrant is subject to various other environmental laws and
regulations imposed by federal, state and local governments. The Registrant
cannot reasonably estimate future costs, if any, related to compliance with
these laws and regulations. However, costs incurred to comply with
environmental regulations have not been significant in 1993 and prior years.
Although it is possible that the Registrant's future operating results could be
affected by future costs of environmental compliance, it is management's belief
that such costs will not have a material effect on the Registrant's
consolidated financial position. The Registrant is unable at this time to
predict the effects of recently enacted amendments to the Clean Air Act upon
its business.
E. PRINCIPAL CUSTOMERS
More than 10% of the Registrant's 1993 sales and revenues was
attributable to each of Armco Steel Company, L.P. and LTV Steel Company, Inc.
A long-term vessel transportation contract and a contract for iron ore pellets
were the primary sources of
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<PAGE> 7
revenues from Armco Steel Company, L.P. In the case of LTV Steel Company,
Inc., revenues were largely attributable to coal-loading and vessel
transportation services and manufactured products sold in 1993.
F. EMPLOYEES
At December 31, 1993, the Registrant and its subsidiaries employed
1,390 persons.
ITEM 2. PROPERTIES
The Registrant's principal operating properties are described in
response to Item 1. The Registrant's executive offices are located at 1100
Superior Avenue, Cleveland, Ohio, under a sublease expiring on March 31, 2003.
The total area involved is approximately 55,000 square feet.
ITEM 3. LEGAL PROCEEDINGS
(1) The suit filed by Ray W. Bauman to recover royalties and profits
and for punitive damages against Laxare, Inc. for allegedly unlawfully mining
coal was dismissed by the Circuit Court of Boone County, West Virginia, on
January 21, 1994.
(2) The Registrant's subsidiary, Laxare, Inc., was named in a
Complaint dated December 27, 1988, along with Cannelton Industries, Inc. and
Thomas G. Williams, Jr., a Lessor of Laxare, Inc., in the Circuit Court of
Boone County, West Virginia. The Plaintiffs, Mary Catherine Marks and
Josephine W. Luther, allege that defendant Thomas Williams has unlawfully
withheld royalties from coal mined from the leased premises and that Laxare,
Inc. was negligent in its verification of the title to the leased premises,
which has resulted in Plaintiffs not receiving royalties.
(3) On January 9, 1989, Laxare, Inc. was served with an Action for
Declaratory Judgment filed by Thomas G. Williams, Jr. and his sister, Sarah M.
Williams, against John Chesley Williams, Mary Catherine Marks, Josephine W.
Luther, Cannelton Industries, Inc. and Laxare, Inc. in the Circuit Court of
Kanawha County, West Virginia, in which Mr. Williams asked the Court to
interpret various documents related to the above-described suit.
Both actions have been combined in the Circuit Court of Kanawha
County, West Virginia.
On October 1, 1993, the Court denied Laxare, Inc.'s Motion for
Summary Judgment on the question of the leasehold's legal validity and required
it to submit briefs in support of all of its affirmative defenses. A joint
scheduling order is being drafted by the parties for submission to the Court.
Trial is anticipated for
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<PAGE> 8
later in 1994. The Registrant has not been able to assess the extent of
damages in the event of an adverse decision in this case.
(4) The Registrant; its wholly owned subsidiary, Oglebay Norton
Taconite Company; Eveleth Taconite Company; Eveleth Expansion Company and The
United Steel Workers of America, Local 6860, have been named Defendants in a
Complaint filed on August 16, 1988, in Federal District Court, 5th District of
Minnesota, by Lois E. Jenson and Patricia S. Kosmach, in their own behalf and
on behalf of all others similarly situated. The Complaint alleges both sexual
harassment and sexual discrimination under Title VII of the Civil Rights Act of
1964 (the Act), Title 42, United States Code, 2000e et seq., and under the
provision of the Minnesota Human Rights Act, Minnesota Statutes, Section 363.01
et seq.
(5) On November 22, 1988, Kathleen P. O'Brien Anderson, a former
employee of Eveleth Mines, filed a Notice of Charge of Discrimination with the
Equal Employment Opportunity Commission, alleging sexual harassment and sexual
discrimination. Ms. Anderson was issued, by the Equal Employment Opportunity
Commission, a Notice of Right to Sue, which has been consolidated with the
preceding Federal Court proceeding.
These proceedings have been certified as a class action. This
matter was tried in December 1992 and February 1993.
On May 14, 1993, the Court issued its decision, dismissing seven
of Plaintiffs' nine claims of discrimination and harassment against Defendants,
Oglebay Norton Taconite Company and the Registrant. In addition, it was
determined that as Eveleth Taconite Company, Eveleth Expansion Company and
Eveleth Expansion Financing Corporation were not "employers", as defined under
the Act, they were dismissed as parties defendant. This dismissal, however,
does not relieve them of their contractual obligations to the Registrant and
Oglebay Norton Taconite Company.
The Registrant and Oglebay Norton Taconite Company received
unfavorable decisions on the remaining two claims, one involving discrimination
in the promotion of hourly employees to step-up foreman and the other
harassment. Proceedings continue with regard to the two remaining counts
against the Registrant and its subsidiary. As final orders have not been
issued, the opportunity for appeal is not yet available. No assessment of
potential loss can be predicted at this time. All or a portion of any loss in
respect of this litigation may be covered by insurance, although at this time
no assessment can be made as to the ultimate scope of insurance coverage
available.
(6) On February 26, 1993, a Complaint was filed by Lois E. Jenson
and Kathleen O'Brien Anderson in the United States District Court, District of
Minnesota, Fifth Division, naming the Registrant; its wholly owned subsidiary,
Oglebay Norton Taconite Company; Eveleth Taconite Company; Eveleth Expansion
Company; and The United Steel
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<PAGE> 9
Workers of America, Local 6860, Defendants. The Complaint alleges violations
of Title VII of the Civil Rights Act of 1964, Title 42, United States Code,
Section 2000e et seq., as amended by the Civil Rights Act of 1991, and the
Minnesota Human Rights Act, Minnesota Statutes, Section 363.01 et seq. The
Plaintiffs seek injunctive relief, back pay, with triple damages, and
compensatory and punitive damages in unspecified amounts. This suit is
considered by counsel to be superfluous and barred by the doctrine of res
judicata due to the fact that these same Plaintiffs filed a related suit in
1988, which was tried in December 1992 and February 1993 and for which a ruling
was rendered on May 14, 1993. An answer has been filed to this Complaint. No
assessment of potential loss can be predicted at this time.
(7) The Registrant and certain of its subsidiaries are involved in
various other claims and ordinary routine litigation incidental to their
businesses, including claims relating to the exposure of persons to asbestos
and silica. The full impact of these claims and proceedings in the aggregate
continues to be unknown. The Registrant continues to monitor this situation.
(8) The Registrant, as Manager of Eveleth Mines, has received a
number of demands for arbitration with respect to management of Eveleth Mines
and the allocation of certain costs, including the right of the Registrant to
allocate the cost of the litigation referred to above in paragraphs (4) and (5)
among the participants, submitted by a participant with a 35% equity interest.
Arbitration panels have not been selected to date, and no discovery has taken
place. As noted above under the heading "Iron Ore" beginning on page 3, the
35% owner has not taken any iron ore from Eveleth Mines since September 1992
and has expressed an interest in exiting from Eveleth Mines.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Registrant's security
holders, through the solicitation of proxies or otherwise, during the fourth
quarter of the fiscal year covered by this report.
EXECUTIVE OFFICERS OF THE REGISTRANT
(Included pursuant to Instruction 3 to paragraph (b) of Item 401 of Regulation
S-K)
The executive officers of the Registrant as of March 7, 1994, unless
otherwise indicated, were as follows.
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<PAGE> 10
<TABLE>
<CAPTION>
Name Executive Office Age
- -------------------- -------------------------------- ---
<S> <C> <C>
R. Thomas Green, Jr. Chairman of the Board, President
and Chief Executive Officer
(since 1992); Executive Vice
President (1990-1992); Vice
President-Iron Ore Operations
(1984-1990); and Director 56
Thomas J. Croyle Vice President-General Manager of Ferro
Engineering Division (since 1988) 44
Edward G. Jaicks Vice President-Marketing (since
1992) 37
Richard J. Kessler Vice President-Finance (since 1981),
and Development (since February 23,
1994) and Treasurer (since 1974) 57
H. William Ruf Vice President-Administrative and
Legal Affairs (since February 23,
1994); Vice President-Human Resources
(1993-1994); Vice President-Employee
Relations (1992-1993); Vice President-
Personnel and Industrial Relations
(1978-1992) 59
John L. Selis Vice President-Iron Ore (since
February 23, 1994); Vice President-
Iron Ore Operations (1992 to
February 23, 1994); Vice President-
Administration (1981-1992) and Law
(1986-1992) 57
Stuart H. Theis Vice President-Marine Transportation
(since January 1, 1994); Assistant to
the President (December 28, 1992-
December 31,1993) 51
David A. Kuhn Secretary (since 1981) and General
Counsel (since March 1, 1992) 64
</TABLE>
Two executive officers, August F. Bradfish, Vice President-
Industrial Minerals, and Frank A. Castle, Vice President-General Manager of
Columbia Transportation Division, retired as of January 31, 1994, and
December 31, 1993, respectively.
Except as noted above, all executive officers of the Registrant have
served in the capacities indicated, respectively, during the past five years.
All executive officers serve at the pleasure of the Board of Directors, with no
fixed term of office.
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<PAGE> 11
Part II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's Common Stock, par value $1 per share, as reported by NASDAQ is
traded on the Over-The-Counter Market. The following is a summary of the
market ranges and dividends declared for each quarterly period in 1993 and 1992
for the Common Stock.
<TABLE>
<CAPTION>
Quarterly Dividends
Period High Low Declared
--------- ---- --- ---------
<S> <C> <C> <C> <C>
1993 4th $23 $19-1/4 $.20
3rd 22 18 .20
2nd 24-1/2 20 .20
1st 26-1/4 22-1/2 .20
1992 4th $29 $23 $.20
3rd 32-1/4 27-1/2 .40
2nd 36-1/2 31 .40
1st 35-1/2 28-1/2 .40
</TABLE>
As of December 31, 1993, there were 543 stockholders of record.
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<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
(Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
YEAR ENDED
1993 1992
------------------------------
<S> <C> <C>
OPERATIONS
Net sales and operating revenues $ 159,736 $ 148,690
Sales commissions, royalties and management fees 3,710 5,321
----------- -----------
Gross operating revenues $ 163,446 $ 154,011
=========== ===========
Income (loss) from continuing operations
before taxes $ 9,554 $ (49,761)
Income taxes 2,292 (17,612)
----------- -----------
Income (loss) from continuing operations 7,262 (32,149)
Discontinued operation 2,440
----------- -----------
Income (loss) before extraordinary provision and
cumulative effects of changes in accounting 7,262 (29,709)
Extraordinary provision1 (9,978)
Cumulative effects of changes in accounting2 (17,006)
----------- -----------
Net income (loss)3 $ 7,262 $ (56,693)
=========== ===========
Depreciation and amortization 13,432 16,165
Expenditures for properties and equipment 2,921 8,727
PER SHARE DATA
Continuing operations $ 2.89 $ (12.79)
Discontinued operation -0- .97
----------- -----------
Income (loss) before extraordinary provision and
cumulative effects of changes in accounting 2.89 (11.82)
Extraordinary provision1 (3.97)
Cumulative effects of changes in accounting2 (6.77)
----------- -----------
Net income (loss)3 $ 2.89 $ (22.56)
=========== ===========
Dividends $ .80 $ 1.40
=========== ===========
OTHER STATISTICS
Total assets $ 259,682 $ 263,974
Long-term debt 69,344 80,534
Other long-term liabilities 80,607 85,838
Dividends declared 2,009 3,518
Average shares of Common Stock outstanding 2,511,545 2,512,926
Shares of Common Stock outstanding at
year-end 2,503,926 2,512,926
<FN>
1 Extraordinary provision relates to the Coal Industry Retiree Health Benefit Act of 1992, as further described in Note I to the
consolidated financial statements.
2 Cumulative effects of changes in accounting are for postretirement benefits other than pensions and vessel inspection costs
in 1992, as further described in Note A to the consolidated financial statements.
</TABLE>
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<TABLE>
DECEMBER 31
<CAPTION>
1991 1990 1989
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 144,249 $ 159,951 $ 145,402
4,594 6,210 6,791
---------- ---------- ----------
$ 148,843 $166,161 $152,193
========== ========== ==========
$ 3,839 $ 7,006 $ 4,705
528 1,829 1,272
---------- ---------- ----------
3,311 5,177 3,433
1,816 1,773 1,574
---------- ---------- ----------
5,127 6,950 5,007
---------- ---------- ----------
$ 5,127 $ 6,950 $ 5,007
========== ========== ==========
15,878 13,691 12,970
3,506 63,894 3,030
$ 1.32 $ 2.03 $ 1.33
.72 .69 .61
---------- ---------- ----------
2.04 2.72 1.94
---------- ---------- ----------
$ 2.04 $ 2.72 $ 1.94
========== ========== ==========
$ 1.60 $ 1.60 $ 1.60
========== ========== ==========
$ 291,133 $ 303,862 $ 245,219
87,937 99,839 48,492
52,209 53,253 53,743
4,022 4,084 4,160
2,513,767 2,555,750 2,580,925
2,512,926 2,517,153 2,578,116
<FN>
3 The net loss for 1992 includes the effects of capacity rationalization, asset impairments, and a loss on the disposal of a
business as further described in Notes G and H to the consolidated financial statements.
</TABLE>
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<PAGE> 14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's operating activities provided cash of $7,764,000 in
1993 as compared to $22,109,000 in 1992 and $24,891,000 in 1991. The increased
cash provided from operations the past two years resulted from the timing of
certain transactions at the end of 1991 and 1990. At the end of 1991, the
Company sold its Licking River Terminal long-term coal dumping contract to a
third party for $12,500,000. The proceeds from the sale were collected at the
beginning of 1992 reducing accounts receivable, established at the time of the
sale, and increasing cash from operations. At the beginning of 1991, the
Company sold inventories and collected related accounts receivable for certain
iron ore transactions which occurred at the end of 1990, increasing cash from
operations by $14,295,000. In 1993, accounts receivable included $1,500,000
related to the sale of assets which caused a decline in cash provided by
operating activities.
In November 1993, the Company repaid $10,000,000 outstanding on its
revolving credit and reborrowed $10,000,000 in December 1993. The Company
repaid a total of $20,000,000 of borrowings under its revolving credit in
January and September 1992 and borrowed a total of $15,000,000 in February and
October 1992. In May 1991, the Company borrowed $6,000,000 under its revolving
credit for working capital purposes and repaid the amount borrowed in July and
August. In December 1993, the Company refinanced its Title XI Ship Financing
Bonds at a cost of $652,000, reducing the fixed interest rate from 9.65% to
5.3%. The reduction in interest will result in cumulative savings
approximating $3,200,000 over the life of the Bonds.
In 1993 and 1991, the Company purchased 9,000 and 4,227 shares,
respectively, of its Common Stock on the open market for $189,000 and $118,000,
respectively, and placed these shares in treasury. The Company declared and
paid dividends on a quarterly basis amounting to $.80 per share in 1993, $1.40
per share in 1992 and $1.60 per share in 1991. Dividends paid were $2,009,000
in 1993 compared to $3,518,000 and $4,022,000 in 1992 and 1991, respectively.
In the fourth quarter of 1992, the Company's Board of Directors approved a
reduction of the quarterly dividend from $.40 per share of Common Stock to $.20
per share. The equivalent dollars resulting from this action will be used to
help advance the Company's strategic businesses.
Expenditures for property and equipment amounted to $2,921,000 in
1993 compared to $8,727,000 and $3,506,000 in 1992 and 1991, respectively.
Vessel inspection costs of $364,000 and $2,782,000 are included in 1993 and
1992 expenditures, respectively, capitalized as a result of a change in
accounting for such costs, as further described in Note A to the consolidated
financial statements. Expenditures for 1992 also include $2,400,000 of
property and equipment acquired as a part of West Minerals, Inc. No
significant capital expenditures for 1994 are currently anticipated.
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<PAGE> 15
LTV Steel Company, Inc. (LTV) sought protection from its creditors
under Chapter 11 of the Bankruptcy Code in 1986; and the U. S. bankruptcy court
authorized LTV to reject the Company's long-term iron ore sales and vessel
transportation contracts. In 1991, an agreement with LTV regarding the
Company's unsecured bankruptcy claim was approved by the Court. In 1993, the
Company sold for cash its claim against LTV, resulting in a $2,653,000 pretax
gain after the retirement of $4,412,000 of long-term receivables. As
previously mentioned, the Company sold its Licking River Terminal long-term
dumping contract in 1991. In 1993, the Company sold the assets of the Terminal
resulting in a $1,326,000 pretax gain. The Company's wholly-owned subsidiary,
Saginaw Mining Company, ceased operation of its St. Clairsville, Ohio coal mine
and began the mine closing process in 1992. Operation of the mine was
discontinued as a result of a decision by a major public utility customer to
terminate its long-term contract with the Company which provided for the sale
of substantially all the mine's high-sulphur coal to that customer. Upon
termination of the contract, the utility customer paid the Company $1,952,000
which was recognized as a gain on shutdown of this discontinued operation.
Permanent closure of the mine was completed in 1993. Final settlement and
customer funding of the closure costs has been extended to July 31, 1994, at
the request of the customer. The Company's wholly-owned subsidiary, T & B
Foundry, was disposed of in 1992 resulting in a $3,300,000 pretax loss. The
above dispositions are further described in Note G to the consolidated
financial statements.
The Company is subject to various environmental laws and regulations
imposed by federal, state and local governments. Also, in the normal course of
business, the Company is involved in various pending or threatened legal
actions. The Company cannot reasonably estimate future costs, if any, related
to these matters. However, costs incurred to comply with environmental
regulations and to settle litigation have not been significant in 1993 and
prior years. Although it is possible that the Company's future operating
results could be affected by future costs of environmental compliance or
litigation, it is management's belief that such costs will not have a material
adverse effect on the Company's consolidated financial position.
Anticipated cash flows from operations and current financial
resources are expected to meet the Company's needs during 1994. As was
demonstrated by the Company's 1993 refinancing of its Title XI Bonds, all
financing alternatives are under constant review to determine their ability to
provide sufficient funding at the least possible cost.
RESULTS OF OPERATIONS
Net sales, operating revenues, sales commissions, royalties and
management fees from continuing operations amounted to $163,446,000 in 1993 as
compared to $154,011,000 and $148,843,000 in 1992 and 1991, respectively.
Income from continuing operations before taxes was $9,554,000 in 1993 as
compared to a loss from continuing operations of $49,761,000 in 1992 and income
of $3,839,000 in 1991. Net income for 1993 was $7,262,000 or $2.89 per share
on 2,511,545 average shares as compared to a net loss of $56,693,000 or $22.56
per share in 1992 on 2,512,926 average shares and net income of $5,127,000 or
$2.04 per share in 1991 on 2,513,767 average shares.
-15-
<PAGE> 16
Included in 1993 revenues is the $2,653,000 gain on the sale of the
Company's unsecured bankruptcy claim and the $1,326,000 gain on the sale of the
Company's Licking River Terminal assets. Notes G and K to the consolidated
financial statements further describe these 1993 transactions. Revenues
include a $1,544,000 gain in 1992 on the disposal of certain undeveloped Iron
Ore and Industrial Sands properties and a $5,777,000 gain in 1991 on the sale
of the Company's Licking River Terminal long-term coal dumping contract.
Included in interest, dividends and other income in 1991 is interest income of
$2,728,000 attributable to a federal income tax refund.
Income from continuing operations before taxes for 1993 was reduced
$1,700,000 as the result of a reserve against doubtful coal customer accounts
receivable and $652,000 related to the Company's refinancing of its Title XI
Bonds. The loss from continuing operations for 1992 was increased $47,912,000
for a provision for capacity rationalization, asset impairment charges and a
loss on the disposal of a business. Notes G, H and K to the consolidated
financial statements further describe these charges. In 1991, income from
continuing operations before taxes was reduced $1,593,000 related to asset
impairment charges, as further described in Note H to the consolidated
financial statements.
In 1992 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 106 "Employers' Accounting for Postretirement Benefits
Other than Pensions." As a part of adopting SFAS No. 106, the Company recorded
a one-time, non-cash charge of $17,541,000 or $6.98 per share in 1992. The
Company also changed its method of accounting for vessel inspection costs from
expensing such costs over one shipping season to deferring these costs and
amortizing them over five shipping seasons between required inspections. This
change in accounting has resulted in a cumulative adjustment which decreased
the 1992 net loss by $534,000 or $.21 per share. Note A to the consolidated
financial statements further describes these changes in accounting. The net
loss for 1992 was increased $9,978,000 or $3.97 per share for an extraordinary
provision for the Coal Industry Retiree Health Benefit Act of 1992. This 1992
legislation requires former coal mining companies to assume certain health care
benefit obligations for retired coal miners and their dependents, as further
described in Note I to the consolidated financial statements.
In 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," which the Company must adopt in 1994. Under the
new rules, the Company's marketable equity investments will be classified as
available-for-sale and carried at fair value. Unrealized holding gains and
losses on investments classified as available-for-sale are carried as a
separate component of stockholders' equity, net of taxes. Presently, the
Company reports such investments at the lower of cost or market and as
long-term in the consolidated balance sheet. The Company will adopt the new
standard in the first quarter of 1994, which will result in an approximate
$2,972,000 increase in stockholders' equity as of January 1, 1994.
In 1993, the Company reevaluated assumptions used in determining
postretirement pension and health care benefits. The weighted-average discount
rates were adjusted from 8.5% to 7.25% to better reflect market rates. The
assumed health care cost
-16-
<PAGE> 17
trend rate will decline by 1.25% and the expected long-term rate of return on
assets will be adjusted from 9.5% to 9% in 1994. The change in assumptions did
not affect 1993 net income and will not have a significant effect on net income
in 1994. Postretirement benefits are further described in Note D to the
consolidated financial statements.
Depressed economic conditions in the steel industry and the
previously mentioned charges adversely affected the Company's 1992 operating
results. In 1993, strong order levels experienced by the Company's steel
industry customers as well as effective cost management have contributed
significantly to 1993 operating results. The Company continues to stress
quality products, cost reductions and improved marketing practices for its
products and services in order to remain competitive within the industries
served.
The operating results of the Company's business segments for the
three years ended December 31, 1993 are discussed below. Segments were
redefined in 1993 resulting in an insignificant reclassification of prior
years' information. It is the policy of the Company to allocate certain
corporate general and administrative expenses to its business segments.
MARINE TRANSPORTATION - Operating revenues amounted to $73,143,000 in 1993
which was 4% greater than revenues of $70,654,000 in 1992, and was comparable
to revenues of $73,090,000 in 1991. Operating profit was $10,791,000 in 1993
which was a 13% and 26% increase over 1992 and 1991 levels of $9,538,000 and
$8,571,000, respectively. Income from continuing operations before taxes was
$5,492,000 in 1993 compared to $2,228,000 and $1,498,000 in 1992 and 1991,
respectively.
Revenues improved in 1993 for the Company's Great Lakes vessel fleet
as operating days increased 6% from an extended sailing season and a 1%
increase in the average rate per ton was realized due to a better commodity
mix, compared to 1992 levels. The 1993 average rate per ton declined 5%
compared to the 1991 rate. The fleet experienced 3% and 5% increases in
tonnage carried in 1993, representing a record level, compared to 1992 and 1991
tonnage, respectively. Transportation of iron ore increased, while coal and
stone shipments declined. Coal shipments were adversely affected by coal
industry labor disputes. Ten vessels sailed for the full season and one vessel
sailed for part of the season in 1993 compared to eleven and thirteen vessels
operating for almost full seasons in 1992 and 1991, respectively.
The 1993 operating profit improvement compared to prior years was
primarily the result of improved revenues and lower operating costs. Asset
impairment charges in 1992 relate primarily to adjusted carrying values of
certain vessels in the Company's fleet based on market conditions in this
industry. Depreciation expense declined in 1993 as a result of the prior year
asset impairment charges. Depreciation was greater in 1992 compared to 1991
expense due to the acquisition of two vessels at the end of 1990. Interest
expense declined in 1993 compared to prior years, as a result of lower interest
rates and reductions in outstanding debt. The Title XI Bonds fixed interest
rate reduction from 9.65% to 5.3% at the end of 1993, as further described in
Note F to the consolidated financial statements, will reduce interest expense
in 1994.
-17-
<PAGE> 18
A new four-year labor agreement was signed in the fourth quarter of
1993 covering the licensed officers and engineers in the Company's fleet. This
agreement helps assure uninterrupted operation of this important segment of the
Company's business.
INDUSTRIAL MINERALS
IRON ORE - Net sales, royalties and management fees for iron ore amounted to
$23,634,000 in 1993, a 26% and 24% increase over 1992 and 1991 levels of
$18,821,000 and $18,998,000, respectively. Operating profit contribution was
$4,031,000 compared to operating losses of $2,832,000 in 1992 and $1,741,000 in
1991. Income from continuing operations was $3,405,000 in 1993 compared to
losses of $38,206,000 in 1992 and $2,911,000 in 1991.
The Company, in addition to its sales to long-term contract
customers, attempts to sell the balance of its share of Eveleth Mines' iron ore
production each year on the open spot market to steel producers. Iron ore spot
market demand has been depressed the past three years; therefore, the Company
has not been successful in selling its iron ore at competitive prices. Price
pressure from the Company's customers continues as a result of excess capacity
in the iron ore industry. The Company is continuing its efforts in responding
to this pressure through increased productivity, managed cost reduction and
more aggressive marketing.
In 1992, the Company recorded a provision for capacity
rationalization of $34,694,000, and asset impairment charges of $330,000, as
disclosed in Note H to the consolidated financial statements. The charges
resulted from depressed economic conditions in the steel industry and Eveleth's
high costs, which caused certain partners in Eveleth Mines to continue to
acquire their iron ore requirements from other sources rather than produce them
at Eveleth. While the Company might conclude otherwise at a later date, the
treatment of its Eveleth investment should not be viewed as an abandonment of
its iron ore business. Preliminary discussions have been held regarding one of
the partners possible exit from Eveleth Mines. No agreement has been reached
regarding the terms or timing of any such exit. Until those terms have been
set, it is impossible to predict how this event may affect the continued
viability of Eveleth Mines.
Revenues increased in 1993 primarily due to a 65% and 74% increase in
iron ore pellet tonnage sold compared to 1992 and 1991, respectively. Spot
market sales to long-term contract customers and other new customers accounted
for the increase in 1993. Eveleth Mines was shut down for part of 1992. The
improvement was partially offset by a 14% and 21% decline in the average
selling price per ton in 1993 compared to 1992 and 1991 average prices,
respectively. Capacity rationalization steps taken in 1992 improved operating
profit in 1993 by $5,220,000. In addition, increased revenues and productivity
and reduced costs contributed to the 1993 improvement. A $550,000 gain on the
sale of certain undeveloped iron ore properties reduced the loss from
continuing operations in 1992. Interest expense declined in 1993, compared to
prior years, due to reductions in outstanding debt.
-18-
<PAGE> 19
Late in the fourth quarter of 1993, the Company reached a new
collective bargaining agreement with members of the United Steel Workers of
America at Eveleth Mines. Early in 1994, the six-year agreement was ratified
by the Eveleth work force.
INDUSTRIAL SANDS - Net sales for 1993 amounted to $26,606,000 compared to
$24,447,000 and $23,326,000 in 1992 and 1991, respectively. Operating profit
was $1,827,000 in 1993 compared to $944,000 and $910,000 in 1992 and 1991,
respectively. Income from continuing operations before taxes was $1,846,000 in
1993 compared to a loss of $2,699,000 in 1992 and income of $537,000 in 1991.
Included in 1992 is a gain on the sale of certain undeveloped sand properties
which reduced the loss by $993,000. Asset impairment charges of $4,640,000 and
$400,000 were recorded at the end of 1992 and 1991, respectively. These
charges resulted from changes in market conditions and circumstances that have
impaired certain asset carrying values at the Company's Texas Mining Company
and California Silica Products Company.
Central Silica Company, the Company's Ohio sand producer, experienced
13% and 29% increases in sales in 1993 compared to 1992 and 1991, respectively.
Central's 1993 operating profit improved 29% and 53% compared to 1992 and 1991,
respectively. Tonnage sold in 1993 declined 13% compared to 1992 and increased
10% compared to the 1991 level. The gross margin on sand products sold
improved in 1993 by 54% and 44% compared to 1992 and 1991, respectively. The
1993 sales and profit improvements were principally due to a magnetic
separation process implemented in the fourth quarter of 1992 which enabled
Central to obtain new business. The improvements were partially offset by
reductions in plant capacity for certain Central Silica customers in 1993.
Texas Mining Company sales in 1993 were comparable to 1992 sales,
while operating profit improved 21% in 1993, compared to 1992. Although
tonnage shipped decreased 6%, gross margin increased 44% in 1993 compared to
1992. The improvement was primarily the result of a better mix of products
sold, partially offset by greater health care costs. Sales in 1993 were 8%
less than in 1991; however, operating profit more than tripled in 1993 compared
to 1991. The sales decline reflects a lower level of oil well drilling due to
lower market prices, partially offset by improved sales in the gas extraction
market. The substantial profit improvement is the result of a 6% reduction in
the average operating cost per ton sold and the expiration of a non-compete
covenant, partially offset by greater health care costs.
California Silica Products sales improved by 20% and 27% in 1993
compared to 1992 and 1991, respectively. Operating profit in 1993 improved
$630,000 and $890,000 over 1992 and 1991 losses, respectively. The 1993 sales
improvement reflects a 20% and 24% increase in tonnage shipped compared to 1992
and 1991 levels, respectively, primarily to recreational markets. The 1993
operating profit improvement is attributable to increased sales and lower
depreciation expense due to asset impairment charges recognized in 1992.
-19-
<PAGE> 20
MANUFACTURING - Net sales for 1993 amounted to $35,756,000 which was 4% and 67%
greater than 1992 and 1991 levels of $34,422,000 and $21,363,000, respectively.
Operating profit was $2,809,000 in 1993 compared to a profit of $257,000 in
1992 and a loss of $1,154,000 in 1991. Income from continuing operations
before taxes was $2,608,000 in 1993 compared to losses of $4,077,000 and
$1,559,000 in 1992 and 1991, respectively. The loss from continuing operations
before taxes in 1992 includes a $3,300,000 loss on the disposal of T & B
Foundry, as disclosed in Note G to the consolidated financial statements.
Asset impairment charges of $755,000 and $411,000 are included in 1992 and
1991, respectively, representing changes in market conditions and circumstances
that impaired certain asset carrying values at the Company's Ferro Engineering
Division.
The increase in net sales in 1993 compared to 1992 is attributable to
new business in the tundish coatings, shapes, hot tops and metal powders
product lines. An 11% increase in net sales in 1993 related to this new
business was partially offset by the loss of T & B Foundry revenues which was
disposed of at the end of 1992. T & B Foundry accounted for 16% and 31% of the
Manufacturing segment net sales in 1992 and 1991, respectively. Fluorspar
product line net sales in 1993 were comparable to 1992, but declined 25%
compared to the 1991 sales level. The increase in net sales in 1992 compared
to 1991 is primarily attributable to the acquisition of the West Minerals metal
powders product line at the beginning of 1992. Operating profit improved in
1993 compared to 1992 as a result of the new business and cost reductions in
the tundish coatings, shapes and hot top product lines. Operating profit
improved in 1992 compared to 1991 as a result of the West Mineral acquisition
and improved tundish coatings and shapes revenues. Interest expense declined
in 1993 compared to 1992 due to lower interest rates and a reduction in
outstanding debt. Increases in depreciation, expenditures for properties and
equipment and interest expense in 1992 compared to 1991 were related
principally to the acquisition.
-20-
<PAGE> 21
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Oglebay Norton Company
We have audited the accompanying consolidated balance sheet of Oglebay Norton
Company and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. Our audits also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Oglebay Norton
Company and subsidiaries at December 31, 1993 and 1992, and the consolidated
results of its operations and cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
As discussed in Note A to the consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement benefits other than
pensions and vessel inspection costs.
ERNST & YOUNG
Cleveland, Ohio
February 18, 1994
-21-
<PAGE> 22
<TABLE>
CONSOLIDATED BALANCE SHEET
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
December 31
1993 1992
-------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 21,243,064 $ 23,332,342
Accounts receivable, less reserves for
doubtful accounts of $2,082,000 in
1993 and $730,000 in 1992 28,291,306 19,310,084
Inventories
Raw materials and finished products 4,354,120 3,642,800
Operating supplies 2,305,719 2,114,738
------------- -------------
6,659,839 5,757,538
Deferred income taxes 3,801,985 3,619,342
Prepaid insurance and other expenses 2,191,166 1,970,005
------------- -------------
TOTAL CURRENT ASSETS 62,187,360 53,989,311
INVESTMENTS AND LONG-TERM RECEIVABLES 14,867,623 19,905,104
PROPERTIES AND EQUIPMENT
Marine Transportation 239,999,642 239,760,249
Industrial Mining 49,911,250 49,016,019
Manufacturing 16,252,996 15,088,124
Other 13,197,688 29,293,167
------------- -------------
319,361,576 333,157,559
Less allowances for depreciation
and amortization 156,962,679 161,845,867
------------- -------------
162,398,897 171,311,692
PREPAID PENSION COSTS AND OTHER ASSETS 20,228,456 18,767,955
------------- -------------
$259,682,336 $263,974,062
============ ============
</TABLE>
-22-
<PAGE> 23
<TABLE>
<CAPTION>
December 31
1993 1992
---------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 11,189,664 $ 7,652,850
Accounts payable 4,005,475 4,498,281
Payrolls and other accrued compensation 4,828,016 3,549,066
Accrued taxes and other expenses 12,477,692 7,681,647
Income taxes 733,414 1,852,729
Reserve for capacity rationalization 6,312,600 6,312,600
Net liabilities of discontinued operation 311,490 2,189,862
------------ ------------
TOTAL CURRENT LIABILITIES 39,858,351 33,737,035
LONG-TERM DEBT, less current portion 69,344,025 80,533,718
RESERVE FOR CAPACITY RATIONALIZATION 9,812,596 16,125,200
POSTRETIREMENT BENEFITS OBLIGATION 30,285,278 28,260,913
OTHER LONG-TERM LIABILITIES 18,166,140 19,209,818
DEFERRED INCOME TAXES 19,398,153 18,768,310
NET LONG-TERM LIABILITIES OF DISCONTINUED
OPERATION 2,944,553 3,473,522
STOCKHOLDERS' EQUITY
Preferred Stock, without par value-authorized
5,000,000 shares; none issued -0- -0-
Common Stock, par value $1.00 per share-authorized
10,000,000 shares; issued 3,626,666 shares 3,626,666 3,626,666
Additional capital 8,988,043 8,946,541
Retained earnings 88,773,915 83,521,361
------------ ------------
101,388,624 96,094,568
Treasury Stock, at cost - 1,122,740 and
1,113,740 shares at respective dates (28,681,694) (28,492,454)
Unallocated Employee Stock Ownership
Plan shares ( 2,833,690) ( 3,736,568)
------------ ------------
69,873,240 63,865,546
------------ ------------
$259,682,336 $263,974,062
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
-23-
<PAGE> 24
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
Year Ended December 31
1993 1992 1991
-------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Net sales and operating revenues $159,736,471 $148,690,067 $144,249,390
Sales commissions, royalties and
management fees 3,709,687 5,321,222 4,594,140
Gain on sale of assets 4,116,906 1,560,218 5,827,280
Interest, dividends and other income 1,184,208 1,465,075 4,534,038
------------ ------------- ------------
168,747,272 157,036,582 159,204,848
COSTS AND EXPENSES
Cost of goods sold and operating expenses 133,335,772 133,827,997 129,073,261
General, administrative and selling expenses 15,854,049 16,564,471 15,088,353
Provision for capacity rationalization -0- 34,693,983 -0-
Asset impairment charges -0- 9,918,497 1,592,725
Loss on disposal of business -0- 3,300,000 -0-
Reserve for doubtful accounts 1,892,419 638,110 41,400
Interest expense 7,554,878 7,610,195 9,256,744
Other expense 556,119 244,048 313,660
------------ ------------- ------------
159,193,237 206,797,301 155,366,143
------------ ------------- ------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 9,554,035 (49,760,719) 3,838,705
INCOME TAXES
Current 233,000 2,330,000 (219,000)
Deferred 2,059,000 (19,942,000) 747,000
------------ ------------- ------------
2,292,000 (17,612,000) 528,000
------------ ------------- ------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 7,262,035 (32,148,719) 3,310,705
Discontinued operation:
Income from discontinued operation -0- 1,152,566 1,816,667
Gain on shutdown of discontinued operation -0- 1,287,791 -0-
------------ ------------- ------------
Income and gain from discontinued operation -0- 2,440,357 1,816,667
------------ ------------- ------------
INCOME (LOSS) BEFORE EXTRAORDINARY
PROVISION AND CUMULATIVE EFFECTS
OF CHANGES IN ACCOUNTING 7,262,035 (29,708,362) 5,127,372
Extraordinary provision for Coal Industry Retiree
Health Benefit Act of 1992 ( 9,977,900)
Cumulative effects of changes in accounting for
postretirement benefits other than pensions
and vessel inspection costs (17,006,415)
------------ ------------- ------------
NET INCOME (LOSS) $ 7,262,035 $ (56,692,677) $ 5,127,372
============ ============= ============
</TABLE>
-24-
<PAGE> 25
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS - (CONTINUED)
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
Year Ended December 31
1993 1992 1991
---------------------------------------------------------
<S> <C> <C> <C>
Income (loss) per share of common stock:
Continuing operations $ 2.89 $(12.79) $1.32
Discontinued operation -0- .97 .72
------- ------- -----
Before extraordinary provision and cumulative
effects of changes in accounting 2.89 (11.82) 2.04
Extraordinary provision ( 3.97)
Cumulative effects of changes in accounting ( 6.77)
------- ------- -----
NET INCOME (LOSS) PER SHARE $ 2.89 $(22.56) $2.04
======= ======= =====
<FN>
See notes to consolidated financial statements.
</TABLE>
-25-
<PAGE> 26
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
Year Ended December 31
1993 1992 1991
------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 7,262,035 $(32,148,719) $ 3,310,705
Adjustments to reconcile income (loss) from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization 13,431,957 16,165,164 15,878,251
Deferred income taxes 447,200 (19,968,342) 747,000
Gain on sale of assets (4,116,906) ( 1,560,218) (5,827,280)
Asset impairment charges -0- 9,918,497 1,592,725
Capacity rationalization -0- 34,693,983 -0-
Loss on disposal of business -0- 3,300,000 -0-
Prepaid pension costs and other assets (2,147,271) ( 1,921,313) (1,756,962)
Decrease (increase) in accounts
receivable (8,981,222) 11,315,860 15,274,129
Decrease (increase) in inventories ( 902,301) (422,785) 1,587,645
Increase (decrease) in accounts payable ( 492,806) 374,061 (1,044,829)
Other operating activities 3,263,529 2,363,080 (4,870,453)
----------- ------------ -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 7,764,215 22,109,268 24,890,931
INVESTING ACTIVITIES
Purchase of properties and equipment ( 2,557,011) ( 3,545,025) ( 3,505,599)
Vessel inspection costs ( 364,164) ( 2,781,565) -0-
Proceeds from sale of assets 8,656,012 2,269,306 111,776
Investments in iron ore mining ( 2,949,695) ( 2,925,167) ( 3,510,658)
Acquisition of West Minerals, Inc. -0- ( 6,000,000) -0-
Other investments 120,306 173,910 131,729
----------- ------------ -----------
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES 2,905,448 (12,808,541) (6,772,752)
FINANCING ACTIVITIES
Payment on short-term bank borrowings -0- -0- ( 6,000,000)
Additional short-term bank borrowings -0- -0- 6,000,000
Payments on long-term debt (18,152,879) (28,652,850) (10,250,000)
Additional long-term debt 10,000,000 21,000,000 -0-
Dividends paid ( 2,009,481) ( 3,518,096) ( 4,021,810)
Purchase of Treasury Stock ( 189,240) -0- ( 118,412)
----------- ------------ -----------
NET CASH USED FOR FINANCING ACTIVITIES (10,351,600) (11,170,946) (14,390,222)
----------- ------------ -----------
Increase (decrease) in cash and cash
equivalents from continuing operations 318,063 ( 1,870,219) 3,727,957
Cash (used for) provided by discontinued operation (2,407,341) 7,800,121 2,165,367
Cash and cash equivalents, January 1 23,332,342 17,402,440 11,509,116
----------- ------------ -----------
CASH AND CASH EQUIVALENTS, DECEMBER 31 $21,243,064 $ 23,332,342 $17,402,440
=========== ============ ===========
<FN>
See notes to consolidated financial statements.
</TABLE>
-26-
<PAGE> 27
<TABLE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
Unallocated
Common Employee Stock Total
Common Additional Retained Stock Ownership Stockholders'
Stock Capital Earnings in Treasury Plan Shares Equity
----- ------- -------- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance,
January 1, 1991 $3,626,666 $8,866,493 $142,626,572 $(28,374,042) $ (5,542,325) $121,203,364
Net Income 5,127,372 5,127,372
Dividends
$1.60 per share (4,021,810) (4,021,810)
Purchase of Treasury
Stock (118,412) (118,412)
Allocated ESOP shares 902,879 902,879
---------- ---------- ------------ ------------ ------------ ------------
Balance,
December 31, 1991 3,626,666 8,866,493 143,732,134 (28,492,454) (4,639,446) 123,093,393
Net Loss (56,692,677) (56,692,677)
Dividends
$1.40 per share ( 3,518,096) ( 3,518,096)
Tax benefit of unallocated
shares in ESOP 80,048 80,048
Allocated ESOP shares 902,878 902,878
---------- ---------- ---------- ---------- ---------- ----------
Balance,
December 31, 1992 3,626,666 8,946,541 83,521,361 (28,492,454) (3,736,568) 63,865,546
Net Income 7,262,035 7,262,035
Dividends
$ .80 per share (2,009,481) (2,009,481)
Tax benefit of unallocated
shares in ESOP 41,502 41,502
Purchase of Treasury
Stock (189,240) (189,240)
Allocated ESOP shares 902,878 902,878
--------- --------- ---------- --------- ---------- ---------
Balance,
December 31, 1993 $3,626,666 $8,988,043 $ 88,773,915 $(28,681,694) $(2,833,690) $69,873,240
========== ========== ============ ============ =========== ===========
</TABLE>
See notes to consolidated financial statements.
-27-
<PAGE> 28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
December 31, 1993, 1992, and 1991
NOTE A - ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and its majority owned subsidiaries. Intercompany
transactions and accounts have been eliminated upon consolidation.
CASH EQUIVALENTS: The Company considers all highly liquid investments with a
maturity of three months or less to be cash equivalents. Cash equivalents are
stated at cost which approximates market value.
INVENTORIES: Inventories are stated at the lower of average cost or market.
INVESTMENTS: The Company holds an investment in Eveleth Mines through a 15
percent interest in Eveleth Taconite Company (ETC) and a 20.5 percent interest
in Eveleth Expansion Company (EEC). Other long-term investments held by the
Company have a carrying value of $3,172,000 and a fair value, based on quoted
market prices, of $7,675,000 at December 31, 1993.
In 1993, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which the Company must adopt in 1994. Under the new rules,
the Company's marketable equity investments will be classified as
available-for-sale and carried at fair value. Unrealized holding gains and
losses on investments classified as available-for-sale are carried as a
separate component of stockholders' equity, net of taxes. Presently, the
Company reports such investments at the lower of cost or market and as
long-term in the consolidated balance sheet. The Company will adopt the new
standard in the first quarter of 1994, which will result in an approximate
$2,972,000 increase in stockholders' equity as of January 1, 1994.
PROPERTIES AND EQUIPMENT: Properties and equipment are carried at cost.
DEPRECIATION AND AMORTIZATION: The Company provides depreciation on the
straight-line method over the estimated useful lives of the assets. The
amortization of advances to Eveleth Mines equivalent to the Company's share of
depreciation of the underlying plant is computed on the units-of-production
method adjusted for levels of operation. Such adjustment provides for a
minimum of 75% of depreciation calculated on a straight-line basis.
INCOME TAXES: Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
-28-
<PAGE> 29
NOTE A - ACCOUNTING POLICIES - (CONTINUED)
NET INCOME (LOSS) PER SHARE: Net income (loss) per share of Common Stock is
based on the average number of shares outstanding.
ACCOUNTING CHANGES AND RECLASSIFICATION: In 1992, the Company adopted the
accounting provisions of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions." This
standard requires that the expected cost of retiree health benefits be charged
to expense during the years that employees render service rather than
recognizing these costs on a cash basis. As a part of adopting the standard,
the Company recorded a one-time, non-cash charge of $17,540,830 (net of income
taxes of $9,037,000), or $6.98 per share. This cumulative adjustment
represents the discounted present value of expected future retiree health
benefits attributed to employees' service rendered prior to that date.
In 1992, the Company changed its method of accounting for vessel inspection
costs from expensing such costs over one shipping season to deferring these
costs and amortizing them over the five shipping seasons between required
inspections. This change results in a better matching of these expenses with
revenues generated during the periods benefited and improves financial
reporting. This change in accounting has been applied retroactively to vessel
inspection costs incurred in prior years and has resulted in a cumulative
adjustment of $534,415 (net of income taxes of $275,000), or $.21 per share.
Pro forma effects of the accounting change are not significant.
Consolidated financial statements for years prior to 1992 have not been
restated for the above accounting changes. Certain amounts in prior years have
been reclassified to conform with the 1993 consolidated financial statement
presentation.
NOTE B - STOCKHOLDERS' EQUITY
The Preferred Stock is issuable in series and the Board of Directors is
authorized to fix the number of shares and designate the terms of each issue.
Certain shares of Series C $10.00 Preferred Stock and Common Stock have been
reserved for issuance upon exercise of Rights under a Stockholders' Rights
Plan. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors, because the Board, at its
option, may redeem the Rights at their redemption price.
The Company has a noncontributory Employee Stock Ownership Plan (ESOP) and
Trust for the benefit of certain salaried employees. In prior years, the Trust
financed the purchase of 250,000 shares of the Company's Common Stock. The
Company has guaranteed the financing and is obligated to make annual
contributions to enable the Trust to repay the loans, including interest. The
Company, as guarantor, has recorded the loans as long-term debt and a like
amount as a reduction of stockholders' equity.
-29-
<PAGE> 30
NOTE C - INCOME TAXES
<TABLE>
Total income tax expense (benefit) from continuing operations differs from the
tax computed by applying the U.S. federal corporate income tax statutory rate
for the following reasons (in thousands):
<CAPTION>
1993 1992 1991
---------------------------------------------------
<S> <C> <C> <C>
Income (loss) from continuing
operations before taxes $9,554 $(49,761) $3,839
====== ======== ======
Computed income tax expense (benefit)
at statutory rate - 34% $3,248 $(16,919) $1,305
Tax differences due to:
Percentage depletion (751) (696) (459)
State & local income taxes ( 22) 87 264
Reinstatement of investment
tax credits -0- -0- (483)
Other (183) (84) (99)
------- ------- -------
Total income tax expense (benefit)
from continuing operations $2,292 $(17,612) $ 528
====== ======== ======
</TABLE>
The Company made income tax payments of $40,000, $2,483,000, and $2,641,000
during 1993, 1992 and 1991, respectively. The Company received income tax
refunds of $222,000, $106,000, and $1,377,000 during those same periods. The
1991 refund, representing prior years' minimum taxes paid, allowed the Company
to reinstate and use investment tax credits previously reduced under the Tax
Reform Act of 1986. In addition, the Company received $2,728,000 of interest
income on the 1991 tax refund. The U.S. current tax liability was reduced in
1991 by $821,000, reflecting the use of investment tax credits previously
utilized for financial accounting purposes. The Company has no remaining
investment tax credit carryforward.
-30-
<PAGE> 31
NOTE C - INCOME TAXES (CONTINUED)
<TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets are as follows (in
thousands):
<CAPTION>
December 31
1993 1992
---------------------------------
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation $43,106 $43,555
Pension benefits 4,323 3,449
Other 2,776 5,441
------- -------
Total deferred tax liabilities 50,205 52,445
Deferred tax assets:
Capacity rationalization and asset
impairment 13,575 15,579
Postretirement benefits other than
pensions 9,459 9,610
Coal Act liability 4,869 5,140
Other 6,706 6,967
------ ------
Total deferred tax assets 34,609 37,296
------ -------
Net deferred tax liabilities $15,596 $15,149
======= =======
</TABLE>
-31-
<PAGE> 32
NOTE D - POSTRETIREMENT BENEFITS
The Company has a number of noncontributory defined benefit pension plans
covering certain employees. The plans provide benefits based on the
participants' years of service and compensation or stated amounts for each year
of service. The Company's funding policy is to contribute amounts to the plans
sufficient to meet the minimum funding required by applicable regulations.
<TABLE>
A summary of the components of the net periodic pension credit for defined
benefit plans follows (in thousands):
<CAPTION>
1993 1992 1991
----------------------------------------------
<S> <C> <C> <C>
Service cost-benefits earned
during the period $ 1,261 $ 1,156 $ 1,275
Interest cost on projected
benefit obligation 4,644 4,574 4,163
Actual return on plan assets (7,558) (5,975) (12,371)
Net amortization and deferral ( 575) (2,086) 5,227
------- -------- --------
Net pension credit $(2,228) $(2,331) $ (1,706)
======= ======= ========
</TABLE>
<TABLE>
Assumptions used in the accounting for defined benefit plans as of December 31
were:
<CAPTION>
1993 1992 1991
------------------------------------------------
<S> <C> <C> <C>
Weighted-average discount rate 7 1/4% 8 1/2% 9%
Rate of increase in compensation levels 4% 5% 6%
Expected long-term rate of return on assets 9 1/2% 9 1/2% 9 1/2%
</TABLE>
-32-
<PAGE> 33
NOTE D - POSTRETIREMENT BENEFITS - (CONTINUED)
<TABLE>
The following table sets forth the funded status and amounts recognized in the
consolidated balance sheet for the Company's defined benefit pension plans (in
thousands):
<CAPTION>
December 31
1993 1992
---------------------------------
<S> <C> <C>
Actuarial present value of
benefit obligations
Vested benefit obligation $(55,720) $(48,451)
Accumulated benefit ======== ========
obligation $(60,162) $(52,021)
Projected benefit ======== ========
obligation $(64,431) $(56,407)
Plan assets at fair value 84,854 81,372
--------- ---------
Plan assets in excess of
projected benefit obligation 20,423 24,965
Unrecognized net gain ( 2,432) ( 7,914)
Unrecognized prior service cost 2,473 1,714
Unrecognized initial net assets ( 6,772) ( 7,417)
---------- --------
Prepaid pension costs recognized $ 13,692 $ 11,348
========== ========
Plan assets consist primarily of stocks and bonds.
</TABLE>
Defined contribution plans are maintained for certain employees and Company
contributions are based on specified percentages of employee contributions,
except for the ESOP. The expense for these plans was $1,434,000, $1,321,000
and $1,333,000 for 1993, 1992 and 1991, respectively. The Company also pays
into certain defined benefit multi-employer plans under various union
agreements which provide pension and other benefits for various classes of
employees. Payments are based upon negotiated contract rates and the expense
amounted to $1,348,000, $1,088,000, and $1,397,000 for 1993, 1992 and 1991,
respectively.
In addition to providing pension benefits, the Company provides health care and
life insurance benefits for certain retired employees. Substantially all of
the Company's employees are eligible for these benefits when they reach normal
retirement age. The Company's policy is to fund these postretirement benefit
costs principally on a cash basis as claims are incurred. In 1992, the Company
adopted Statement of Financial Accounting Standards No. 106, as further
disclosed in Note A. Postretirement benefit costs for 1991 were recorded on a
cash basis and have not been restated.
-33-
<PAGE> 34
NOTE D - POSTRETIREMENT BENEFITS - (CONTINUED)
<TABLE>
Net periodic postretirement benefits cost includes the following components (in
thousands):
<CAPTION>
1993 1992 1991
---------------------------------------------------
<S> <C> <C> <C>
Service cost $ 826 $ 691
Interest cost 2,228 2,180
Net amortization (13) -0-
----- -----
Net periodic postretirement
benefit cost $3,041 $2,871 $1,385
====== ====== ======
</TABLE>
<TABLE>
Components of the unfunded postretirement benefits obligation are as follows
(in thousands):
<CAPTION>
December 31
1993 1992
---------------------------------
<S> <C> <C>
Retirees $14,478 $17,360
Fully eligible active plan participants 2,728 2,291
Other active plan participants 10,255 8,610
-------- -------
Accumulated postretirement benefits obligation 27,461 28,261
Unrecognized prior service credit 1,962 -0-
Unrecognized net gain 862 -0-
------- ------
Postretirement benefits obligation recognized $30,285 $28,261
======= =======
</TABLE>
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% and 8.5% at December 31, 1993 and
1992, respectively.
The weighted-average annual assumed rate of increase in the health care cost
trend rate for 1994 is 9% (11% in 1993) for retirees age 65 and over and 12%
(14% in 1993) for retirees under age 65, and both are assumed to decrease
gradually to 5.25% in 2001 and 2007, respectively, (6% in 1993) and remain at
that level thereafter. The health care cost trend rate assumption has a
significant effect on the amounts reported. For example, increasing the
assumed health care cost trend rate by 1% in each year would increase the
accumulated postretirement benefits obligation as of December 31, 1993 by
approximately $2,791,000 and the aggregate of the service and interest cost
components of net periodic postretirement benefits cost for 1993 by
approximately $534,000.
-34-
<PAGE> 35
NOTE E - COMMITMENTS
Future minimum payments at December 31, 1993, under noncancellable operating
leases, primarily vessel charters, are $4,530,000 in 1994, $4,440,000 in 1995,
$4,218,000 in 1996, $4,035,000 in 1997, $3,996,000 in 1998, $1,790,000 in 1999
and $1,938,000 thereafter.
Rental expense was $5,162,000, $5,181,000 and $5,337,000 in 1993, 1992 and 1991
respectively. In general, the leases are renewable or contain purchase options
at the end of the lease term. The purchase price or renewal lease payment is
based on the fair market value of the asset at the date of purchase or renewal.
The Company and its partners in Eveleth Mines have guaranteed to reimburse ETC
and EEC for all costs incurred in production of iron ore pellets, including
EEC's debt service. Each partner of Eveleth Mines pays its share of costs
based upon its share of production or ownership interest, whichever is
applicable. Purchases by the Company under a take-or-pay contract, associated
with Eveleth Mines long-term debt, amounted to $24,800,000, $21,764,000 and
$19,166,000 for the years ended December 31, 1993, 1992 and 1991, respectively.
Maturities on the long-term debt are $2,813,000 in 1994 and 1995 and are
included in the reserve for capacity rationalization on the consolidated
balance sheet. Accrued taxes and other expenses on the consolidated balance
sheet include $4,955,000 and $146,000 payable in 1993 and 1992, respectively,
for ETC's working capital requirements.
NOTE F - LONG-TERM DEBT
<TABLE>
Long-term debt is as follows (in thousands):
<CAPTION>
December 31
1993 1992
---------------------------------
<S> <C> <C>
Title XI Ship Financing Bonds
Fixed rate, 5.3% $18,700 $19,450
Term Loan, Variable rate, 4.88% 44,750 49,750
Revolving Credit, Variable rate, 4.81% 10,000 10,000
Term Loan, Variable rate, 4.44%
due in equal quarterly installments
through January 31, 1998 4,250 5,250
Guaranteed ESOP Loans
Variable rate, 3.32%
due in equal quarterly
installments through May 31, 1994 213 640
Variable rate, 3.42%, and 971 1,147
Fixed rate, 8.88%
due in equal quarterly
installments through May 31, 1999 1,650 1,950
------ ------
80,534 88,187
Less current portion 11,190 7,653
------ ------
$69,344 $80,534
====== ======
</TABLE>
-35-
<PAGE> 36
NOTE F - LONG-TERM DEBT (CONTINUED)
The Title XI Ship Financing Bonds are guaranteed by the U.S. Government under
the Federal Ship Financing Program. During the fourth quarter of 1993 the
Company refinanced the Title XI Bonds at a cost of $652,000, reducing the fixed
interest rate from 9.65% to 5.3%. The reduction in interest will result in
cumulative savings approximating $3,200,000 over the life of the Bonds. The
Bonds mature in 2001 and require sinking fund redemptions of $1,250,000
semiannually.
In connection with the Title XI Bonds and a vessel charter agreement, the
Company may be required, under certain conditions, to make deposits to a Title
XI reserve fund, maintain specified levels of stockholders' equity or obtain
prior written consent from the Maritime Administrator, U.S. Department of
Transportation, for certain designated financial transactions. No approval was
required through 1993 and the Company does not anticipate any such consent will
be required in the future.
The Company has mandatory payments under the Term Loan of $7,000,000 in 1994,
$8,000,000 in 1995, 1996 and 1997 and $13,750,000 in 1998. The Revolving
Credit terminates on December 31, 1996 subject to annual renewals to December
31, 1998 under certain conditions. The Company has an additional $24,000,000
of borrowing available under the Revolving Credit at December 31, 1993.
Collateral for the Title XI Ship Financing Bonds and the Term Loan is in the
form of first preferred ship mortgages on five of the Company's vessels with a
net book value of $111,953,000.
The Company, in separate agreements which expire in 1995, entered into interest
rate swaps with major financial institutions to substitute fixed rates for
LIBOR-based interest rates on notional amounts totaling $32,684,000 at December
31, 1993. The interest rate differential is recognized over the lives of the
agreements as an adjustment to interest expense. The weighted average interest
rate was 10.1% on the amounts covered by the swap agreements during 1993.
Market risks associated with the swap agreements are mitigated since increased
interest payments under the agreements resulting from a decrease in LIBOR-based
interest rates are effectively offset by decreased variable rate interest
payments under the debt obligations.
The Company's debt agreements, as amended, contain various covenants with the
most restrictive covenant requiring the Company to maintain specified levels of
tangible net worth during each year. The Company's tangible net worth was
$65,231,000 at December 31, 1993, compared to a minimum specified level of
$60,631,000.
Long-term debt maturities are $11,190,000 in 1994, $11,976,000 in 1995, 1996
and 1997 and $26,976,000 in 1998. The Company made interest payments of
$7,973,000, $7,279,000 and $9,069,000 during 1993, 1992 and 1991, respectively.
The fair value of the Company's long-term debt and interest rate swap
liabilities is estimated to be $80,000,000 and $1,100,000, respectively, at
December 31, 1993. Such fair values were estimated using discounted cash flow
analysis based on the Company's current incremental borrowing rates for similar
types of arrangements.
-36-
<PAGE> 37
NOTE G - DISPOSITIONS
In July 1986, LTV Steel Company, Inc. (LTV) sought protection from its
creditors under Chapter 11 of the Bankruptcy Code and the U.S. Bankruptcy
Court authorized LTV to reject the Company's long-term iron ore sales and
vessel transportation contracts. In May 1991, an agreement with LTV regarding
the Company's unsecured bankruptcy claim was approved by the Court. During the
second quarter of 1993 the Company sold for cash its claim against LTV,
resulting in a $2,653,000 pretax gain after the retirement of $4,412,000 of
long-term receivables.
During the fourth quarter of 1991, the Company sold a long-term coal dumping
contract held by its wholly owned subsidiary, Licking River Terminal (LRT) for
$12,500,000. Since this contract represented the majority of LRT's business,
the Company recorded asset impairment charges of $6,723,000 in 1991. This
transaction, including the net gain on the sale of the contract of $5,777,000,
is reflected in the 1991 consolidated financial statements. During the second
quarter of 1992, the Company determined that the facility no longer served the
objectives of the Company's strategic goals and was shut down. Amounts accrued
in 1991 adequately covered shutdown costs incurred in 1992. During the fourth
quarter of 1993, the Company sold its LRT assets resulting in a $1,326,000
pretax gain.
The Company's wholly owned subsidiary, Saginaw Mining Company, ceased operation
of its St. Clairsville, Ohio coal mine in August 1992 and began the mine
closing process. The decision to terminate the operation of the mine followed
a decision by a major public utility customer to terminate its long-term
contract with the Company which provided for the sale of substantially all the
mine's high-sulphur coal to that customer. Upon termination of the contract,
the utility customer paid the Company $1,951,791 which was recognized as a gain
on shutdown of discontinued operation of $1,287,791 (net of income taxes of
$664,000), or $.51 per share. The contract was due to expire in 1994.
<TABLE>
Results of the discontinued operation are as follows (in thousands):
<CAPTION>
1992 1991
---------------------------------
<S> <C> <C>
Total revenues $19,365 $24,232
======= =======
Income before income taxes $ 1,603 $ 2,282
Income taxes 450 465
------- -------
Income from discontinued
operation $ 1,153 $ 1,817
======= =======
</TABLE>
-37-
<PAGE> 38
NOTE G - DISPOSITIONS - (CONTINUED)
Permanent closure of the mine was completed in 1993. Closure costs of this
discontinued operation are being funded by the public utility customer, as
required by the contract. Final settlement and funding of the closure costs
has been extended to July 31, 1994, at the request of the customer. Remaining
net liabilities of the discontinued operation consist primarily of employee
benefit costs.
The Company's wholly owned subsidiary, T & B Foundry, was disposed of effective
December 31, 1992 resulting in a $3,300,000 pretax loss. The Foundry is
included in the Company's Manufacturing segment in 1992 and 1991.
NOTE H - ASSET IMPAIRMENTS AND RESERVES
During the fourth quarter of 1992, the Company recorded a $34,693,983 provision
for capacity rationalization. The charge includes a $12,256,183 write down of
the Company's investment in Eveleth Mines and the establishment of a
$22,437,800 reserve for certain fixed obligations, including the Company's
share of Eveleth's long-term debt. The charge resulted from economic
conditions in the steel industry and Eveleth's high costs, which caused certain
partners in Eveleth Mines to continue to acquire their iron ore requirements
from other sources rather than produce them at Eveleth.
During the fourth quarter of 1992 and 1991, the Company recorded asset
impairment charges of $9,918,497 and $1,592,725, respectively. These charges
relate primarily to changed market conditions and circumstances that have
impaired certain asset carrying values. The Company has established reserves
and written down several under performing assets at its Ferro Engineering
Division, National Perlite Products Company and Texas Mining Company in both
1992 and 1991. In addition, certain under performing assets primarily at the
Company's Columbia Transportation Division and California Silica Products
Company were written down in 1992. Ferro is included in the Company's
Manufacturing segment, while Columbia is included in the Marine Transportation
segment. Texas Mining and California Silica are included in the Company's
Industrial Sands segment.
-38-
<PAGE> 39
NOTE I - EXTRAORDINARY PROVISION
During the fourth quarter of 1992, the Coal Industry Retiree Health Benefit Act
of 1992 was enacted by the U.S. Congress. This legislation requires coal
mining companies to assume certain health care benefit obligations for retired
coal miners and their dependents. Some of these coal miners never worked for
the companies now required by this law to pay these health care benefits. In
other cases, the companies have had no relationship or obligation to these
miners for decades. While the exact amount of the liability is difficult to
determine, the Company recorded a, non-cash, extraordinary charge of $9,977,900
(net of income taxes of $5,140,000), or $3.97 per share, to accrue for this
obligation in 1992. At December 31, 1993 and 1992, the Coal Act liability
amounted to $14,320,000 and $15,117,900, respectively. The change in the
liability in 1993 is a result of interest accretion, changes in actuarial
assumptions and payments of $379,000. In 1994, interest accretion is expected
to reduce net income by approximately $685,000.
NOTE J - INDUSTRY SEGMENTS AND MAJOR CUSTOMERS
Oglebay Norton Company is a Cleveland-based raw materials and Great Lakes
marine transportation company serving the steel, ceramic, chemical, electric
utility and oil-and gas-well service industries with industrial minerals and
supplying manufactured products used in hot metal processing. The Company's
major industry segments are as follows:
MARINE TRANSPORTATION
Through its Columbia Transportation Division, the Company operates a fleet
of vessels engaged in the transportation of iron ore, coal, limestone and
other dry bulk cargoes on the Great Lakes.
INDUSTRIAL MINERALS
IRON ORE
The Company owns interests in and manages the taconite mining and
pelletizing operations of Eveleth Mines owned by Eveleth Taconite Company
and Eveleth Expansion Company located on the Mesabi Range near Eveleth,
Minnesota.
INDUSTRIAL SANDS
Company subsidiaries engaged in natural resource operations include: Central
Silica Company, headquartered in Zanesville, Ohio, which produces silica
sand for the glass, paint, ceramic and foundry industries; Texas Mining
Company which produces sand products at Brady, Texas and Riverside,
California for the oil-well service, construction and foundry industries;
and California Silica Products Company near San Juan Capistrano, California,
which produces silica products for the construction, recreation and other
industries.
-39-
<PAGE> 40
MANUFACTURING
The Ferro Engineering Division of the Company in Cleveland, Ohio, and the
Company's Canadian, Indiana and Ohio subsidiaries, Canadian Ferro Hot Metal
Specialties Limited, Indiana Manufacturing Company and Tuscarawas
Manufacturing Company, produce a wide variety of ingot and tundish
refractory products used in iron and steel making. West Minerals, whose
assets were acquired by the Company's ONCo Minerals, Inc., retained its
recognized name, continuing to engineer and custom blend metallurgical
powders for the treatment of molten steel and steel making slags. The
Company also operates a plant at Brownsville, Texas, which processes
fluorspar for the fiberglass, glass, ceramics and steel industries.
<TABLE>
Accounts receivable of $15,036,000 at December 31, 1993 are due from companies
in steel related industries. Credit is extended based on an evaluation of a
customer's financial condition, and generally collateral is not required.
Credit losses have, historically, been insignificant. Sales to two major steel
producers exceeded 10% of consolidated net sales and operating revenues and are
summarized as follows (in thousands):
<CAPTION>
Marine Iron
Customer Transportation Ore Manufacturing Other Total
- -------- ---------------- --- ------------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1993
A $14,523 $ 8,935 $ 752 $ 68 $24,278
B 19,384 -0- 6,698 1,513 27,595
------ --- ----- ----- ------
$33,907 $ 8,935 $7,450 $1,581 $51,873
======= ======= ====== ====== =======
1992
A $14,462 $10,090 $ 572 $ 105 $25,229
B 23,700 -0- 6,428 1,464 31,592
------ ------- ----- ----- ------
$38,162 $10,090 $7,000 $1,569 $56,821
======= ======= ====== ====== =======
1991
A $13,419 $11,074 $ 52 $ -0- $24,545
B 30,483 -0- 1,706 1,511 33,700
------ ------- ----- ----- ------
$43,902 $11,074 $1,758 $1,511 $58,245
======= ======= ====== ====== =======
</TABLE>
-40-
<PAGE> 41
<TABLE>
INDUSTRY SEGMENT DATA1
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
INDUSTRY
- -------------------------------------------------------------------------------------------------------------
<CAPTION> Marine Iron
Transportation Ore
------------------ ----
1993
<S> <C> <C>
Identifiable assets $ 146,918 $ 16,022
Depreciation and amortization expense 8,157 1,086
Expenditures for properties and equipment 364 137
Net sales, operating revenues, sales commissions,
royalties and management fees 73,143 23,634
Income (loss) from continuing operations before taxes:
Operating profit (loss) contribution $ 10,791 $ 4,031
Gain on sale of assets 10 4
Company's proportionate share in interest
expense of Eveleth Mines ( 630)
Interest expense (5,309)
---------- ---------
$ 5,492 $ 3,405
========== =========
1992
Identifiable assets $ 149,830 $ 12,649
Depreciation and amortization expense 8,677 2,627
Expenditures for properties and equipment 3,359 231
Net sales, operating revenues, sales commissions,
royalties and management fees 70,654 18,821
Income (loss) from continuing operations before taxes:
Operating profit (loss) contribution $ 9,538 $( 2,832)
Provision for capacity rationalization (34,694)
Asset impairment charges (1,492) ( 330)
Gain on sale of assets 550
Loss on disposal of business
Company's proportionate share in interest
expense of Eveleth Mines ( 900)
Interest expense ( 5,818)
---------- ---------
$ 2,228 $ (38,206)
========== =========
1991
Identifiable assets $ 157,393 $ 25,029
Depreciation and amortization expense 7,966 2,676
Expenditures for properties and equipment 889
Net sales, operating revenues, sales commissions,
royalties and management fees 73,090 18,998
Income (loss) from continuing operations before taxes:
Operating profit (loss) contribution $ 8,571 $( 1,741)
Asset impairment charges
Gain on sale of assets 3
Company's proportionate share in interest
expense of Eveleth Mines ( 1,170)
Interest expense ( 7,076)
---------- ---------
$ 1,498 $( 2,911)
========== =========
<FN>
1 Segments were redefined in 1993 resulting in an insignificant reclassification of prior years data.
2 Consists primarily of cash and cash equivalents, investments and prepaid pension costs.
</TABLE>
-41-
<PAGE> 42
<TABLE>
SEGMENTS (In Thousands)
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Industrial Total Corporate
Sands Manufacturing Segments and Other Consolidated
- ---------- ------------- -------- --------- ------------
<S> <C> <C> <C> <C>
$ 25,682 $ 21,807 $ 210,429 $ 49,253(2) $ 259,682
2,055 1,657 12,955 477 13,432
943 1,202 2,646 412 3,058
26,606 35,756 159,139 4,307 163,446
$ 1,827 $ 2,809 $ 19,458 $ (5,836)(3) $ 13,622
19 33 4,084 4,117
( 630) ( 630)
( 201) ( 5,510) (2,045) (7,555)
- --------- --------- --------- --------- ---------
$ 1,846 $ 2,608 $ 13,351 $ (3,797) $ 9,554
========= ========= ========= ========= =========
$ 27,532 $ 20,304 $ 210,315 $ 53,659(2) $ 263,974
2,504 1,906 15,714 451 16,165
1,545 3,622 8,757 201 8,958
24,447 34,422 148,344 5,667 154,011
$ 944 $ 257 $ 7,907 $ (2,806)(3) $ 5,101
(34,694) (34,694)
( 4,640) ( 755) ( 7,217) (2,701) ( 9,918)
997 5 1,552 8 1,560
(3,300) ( 3,300) ( 3,300)
( 900) ( 900)
( 284) ( 6,102) ( 1,508) ( 7,610)
- --------- --------- --------- --------- ---------
$ ( 2,699) $ (4,077) $ (42,754) $ ( 7,007) $ (49,761)
========= ========= ========= ========= =========
$ 31,997 $ 14,397 $ 228,816 $ 62,317(2) $ 291,133
2,912 858 14,412 1,466 15,878
1,880 1,140 3,909 486 4,395
23,326 21,363 136,777 12,066 148,843
$ 910 $ (1,154) $ 6,586 $ 3,446(3) $ 10,032
( 400) ( 411) ( 811) ( 782) ( 1,593)
27 6 36 5,791 5,827
( 1,170) ( 1,170)
( 7,076) ( 2,181) ( 9,257)
- --------- --------- --------- --------- ---------
$ 537 $ (1,559) $ ( 2,435) $ 6,274 $ 3,839
========= ========= ========= ========= =========
<FN>
3 Includes other operations, certain corporate expenses, net of dividends, interest and other income, and in 1993 a $1,700,000
reserve against doubtful coal customer accounts receivable and $652,000 of debt refinancing costs.
</TABLE>
-42-
<PAGE> 43
NOTE K - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
Unaudited quarterly results of operations for the years ended December 31, 1993 and 1992 are summarized as follows (in thousands,
except per share amounts):
<CAPTION>
Income (Loss)
Income (Loss) Before Extra-
Net Before Extra- ordinary Provision Net
Sales and ordinary Provision and Changes Income
Three Months Operating Gross and Changes Net Income In Accounting (Loss)
Ended Revenues Profit In Accounting (Loss) Per Share Per Share
- -------------- -------- ------ ------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1993
December 31 $48,281 $8,703 $ 4,229 $ 4,229 $ 1.68 $ 1.68
September 30 47,946 8,215 2,311 2,311 .92 .92
June 30 47,004 7,632 2,810 2,810 1.12 1.12
March 31 16,505 1,850 ( 2,088) ( 2,088) ( .83) ( .83)
1992
December 31 $40,429 $5,603 $(30,272) $(40,250) $(12.05) $(16.02)
September 30 43,958 4,322 2,978 2,978 1.18 1.18
June 30 45,596 5,343 711 711 .28 .28
March 31 18,707 (406) ( 3,126) (20,132) ( 1.24) ( 8.01)
</TABLE>
Per share amounts are based on the average number of shares outstanding during
each quarter. Certain quarterly amounts for 1992 are different from amounts
reported in the prior year as a result of reallocations made for postretirement
benefit costs and reserves for doubtful accounts.
Second quarter income before extraordinary provision and changes in accounting
and net income for 1993 increased $1,751,000 ($.70 per share) related to the
sale of an unsecured bankruptcy claim, as further disclosed in Note G, and
declined $792,000 ($.32 per share) as a result of a reserve against doubtful
coal customer accounts receivable.
Fourth quarter income before extraordinary provision and changes in accounting
and net income for 1993 increased $875,000 ($.35 per share) related to the sale
of assets, as further disclosed in Note G, and declined $760,000 ($.30 per
share) related to bond refinancing costs, as further disclosed in Note F, and
an additional reserve against remaining doubtful coal customer accounts
receivable.
The fourth quarter loss before extraordinary provision and changes in
accounting and the net loss for 1992 was increased $31,622,000 ($12.58 per
share) for a provision for capacity rationalization, asset impairment charges
and a loss on the disposal of a business. See Notes G and H for further
disclosure. The fourth quarter net loss for 1992 was also increased $9,978,000
($3.97 per share) for an extraordinary provision for the Coal Industry Retiree
Health Benefit Act of 1992 as further disclosed in Note I.
-43-
<PAGE> 44
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
Information in this Part III required by Item 10 ("Directors and Officers of
the Registrant"), Items 11 and 13 ("Executive Compensation" and "Certain
Relationships and Related Transactions"), and Item 12 ("Security Ownership of
Certain Beneficial Owners and Management") is incorporated herein by reference
to the information contained in the Registrant's definitive Proxy Statement for
its 1994 Annual Meeting of Stockholders under the captions "Nominees for Board
of Directors" on page 3, "Ownership of Voting Securities" on pages 6 and 7 and
"Compensation of Executive Officers" on pages 9 through 17, respectively. A
definitive Proxy Statement will be filed with the Securities and Exchange
Commission on or before March 31, 1994.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a)(1) LIST OF FINANCIAL STATEMENTS: The response to this portion
of Item 14 is submitted as a separate section of this Annual Report on Form
10-K.
(a)(2) LIST OF FINANCIAL STATEMENT SCHEDULES: The response to this
portion of Item 14 is submitted as a separate section of this Annual Report on
Form 10-K.
(a)(3) LIST OF EXHIBITS: See the Exhibit Index beginning at
sequential page of this Annual Report on Form 10-K.
(b) REPORTS ON FORM 8-K: The Registrant did not file any reports
on Form 8-K in 1993.
(c) EXHIBITS: The response to this portion of Item 14 is
submitted as a separate section of this Annual Report on Form 10-K beginning at
sequential page .
(d) FINANCIAL STATEMENT SCHEDULES: The response to this portion
of Item 14 is submitted as a separate section of this Annual Report on Form
10-K beginning at sequential page .
- 44 -
<PAGE> 45
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned thereunto duly authorized.
OGLEBAY NORTON COMPANY
/S/ Richard J. Kessler
--------------------------
Richard J. Kessler
Vice President-Finance and
Development and Treasurer
March 29, 1994
- 45 -
<PAGE> 46
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the Principal Executive Officer, the
Principal Financial Officer, the Principal Accounting Officer and a majority of
the Directors of the Registrant on March 29, 1994.
Chairman of the Board,
/S/ R. Thomas Green, Jr. President and Chief Executive
- ------------------------ Officer and Director; Principal
R. Thomas Green, Jr. Executive Officer
Vice President-Finance and
/S/ Richard J. Kessler Development and Treasurer;
- ------------------------ Principal Financial and
Richard J. Kessler Accounting Officer
/S/ Brent D. Baird
- ------------------------
Brent D. Baird Director
/S/ Malvin E. Bank
- ------------------------
Malvin E. Bank Director
/S/ William G. Bares
- ------------------------
William G. Bares Director
/S/ Albert C. Bersticker
- ------------------------
Albert C. Bersticker Director
/S/ John J. Dwyer
- ------------------------
John J. Dwyer Director
/S/ Ralph D. Ketchum
- ------------------------
Ralph D. Ketchum Director
/S/ Herbert S. Richey
- ------------------------
Herbert S. Richey Director
/S/ Renold D. Thompson
- ------------------------- Vice Chairman of the Board and
Renold D. Thompson Director
/S/ John D. Weil
- ------------------------
John D. Weil Director
/S/ Fred R. White, Jr.
- ------------------------
Fred R. White, Jr. Director
<PAGE> 47
ANNUAL REPORT ON FORM 10-K
ITEM 14(a) (1) AND (2), 14(c) AND 14(d)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1993
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CLEVELAND, OHIO
<PAGE> 48
FORM 10-K
ITEM 14(a) (1) AND (2)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
The following consolidated financial statements of the Registrant and
its subsidiaries are included in Item 8:
Consolidated Balance Sheet - December 31, 1993 and 1992
Consolidated Statement of Operations - Years ended December 31, 1993, 1992,
and 1991
Consolidated Statement of Cash Flows - Years ended December 31, 1993, 1992
and 1991
Consolidated Statement of Stockholders' Equity - Years ended December 31,
1993, 1992 and 1991
Notes to Consolidated Financial Statements
The following consolidated financial statement schedules of the
Registrant and its subsidiaries are included in Item 14(d):
Schedule I - Marketable Securities - Other Investments
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation, Depletion and Amortization of
Property, Plant and Equipment
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
Schedule X - Supplementary Income Statement Information
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
<PAGE> 49
<TABLE>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
Year Ended December 31, 1993
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- ------------------- -----------------
Number of Shares
or Units-Principal
Amount of Bonds and Cost of
NAME OF ISSUER AND TITLE OF EACH ISSUE Notes Each issue
- -------------------------------------- ------------------- -----------------
<S> <C> <C>
Short-term money market investments:
Society National Bank, time deposit
2.9% due January 3, 1994 $18,150,000 $18,150,000
Society National Bank, weekly put
Meadowridge Investment Co. adjustable
rate note 3.25% due January 3, 1994 1,000,000 1,000,000
Society National Bank, weekly put
Atlantic Tool & Die adjustable
rate note 3.25% due January 3, 1994 850,000 850,000
Society National Bank, weekly put
Center Ridge Joint Venture adjustable
rate note 3.25% due January 3, 1994 1,000,000 1,000,000
Society National Bank, weekly put
The Perlmuter Printing Co. adjustable
rate note 3.25% due January 3, 1994 675,000 675,000
Cattlemen's State Bank, certificate of
deposit 3.0% due May 10, 1994 320,000 320,000
Toronto Dominion Bank, Bankers Acceptances
3.35% due January 27, 1994 264,389 263,689
</TABLE>
<TABLE>
<CAPTION>
COLUMN A COLUMN D COLUMN E
-------- ---------------------- ----------------------------------
Amount at Which Each
Market Value of Portfolio of Equity Security
Each issue at Issues and Each Other Security
NAME OF ISSUER AND TITLE OF EACH ISSUE Balance Sheet Date Issue Carried in the Balance Sheet
- -------------------------------------- --------------------- ----------------------------------
<S> <C> <C>
Short-term money market investments:
Society National Bank, time deposit
2.9% due January 3, 1994 $18,150,000 $18,150,000
Society National Bank, weekly put
Meadowridge Investment Co. adjustable
rate note 3.25% due January 3, 1994 1,003,028 1,000,000
Society National Bank, weekly put
Atlantic Tool & Die adjustable
rate note 3.25% due January 3, 1994 852,574 850,000
Society National Bank, weekly put
Center Ridge Joint Venture adjustable
rate note 3.25% due January 3, 1994 1,003,028 1,000,000
Society National Bank, weekly put
The Perlmuter Printing Co. adjustable
rate note 3.25% due January 3, 1994 677,043 675,000
Cattlemen's State Bank, certificate of
deposit 3.0% due May 10, 1994 321,341 320,000
Toronto Dominion Bank, Bankers Acceptances
3.35% due January 27, 1994 263,762 263,689
</TABLE>
<PAGE> 50
<TABLE>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
Year Ended December 31, 1993
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- ------------------ -----------------
Number of Shares
or Units-Principal
Amount of Bonds and Cost of
NAME OF ISSUER AND TITLE OF EACH ISSUE Notes Each issue
- -------------------------------------- ------------------ -----------------
<S> <C> <C>
Warrants 1,220 ea. -0-
Preferred Stock 250 sh. -0-
Various Common Stocks 3,708 sh. 3,918
-----------
SHORT-TERM MONEY MARKET INVESTMENTS/OTHER $22,262,607
===========
Accrued Interest
TOTAL
Other Security Investments - carried as investments
Great Northern Iron Ore Properties, rights of
beneficial interest certificates 190,100 units $ 3,172,496
============
</TABLE>
<TABLE>
<CAPTION>
COLUMN A COLUMN D COLUMN E
-------- ---------------------- ----------------------------------
Amount at Which Each
Market Value of Portfolio of Equity Security
Each issue at Issues and Each Other Security
NAME OF ISSUER AND TITLE OF EACH ISSUE Balance Sheet Date Issue Carried in the Balance Sheet
- -------------------------------------- ---------------------- ----------------------------------
<S> <C> <C>
Warrants 1,830 -0-
Preferred Stock -0- -0-
Various Common Stocks 1,917 3,918
----------- ------------
SHORT-TERM MONEY MARKET INVESTMENTS/OTHER $22,294,523 22,262,607
===========
Accrued Interest 12,135
-----------
TOTAL $ 22,274,742
============
Other Security Investments - carried as investments
Great Northern Iron Ore Properties, rights of
beneficial interest certificates $ 7,675,288 $ 3,172,496
============ ============
<FN>
NOTE: The short-term securities are carried in the consolidated balance sheet at cost.
</TABLE>
<PAGE> 51
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
Balance at Balance at
Beginning Additions Retirements Other Charges End of
Classification of Period at Cost or Sales Add (Deduct) Period
-------------- --------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993:
Marine Transportation $239,760,249 $ 364,164(1) $ 124,771 $ -0- $ 239,999,642
Industrial Mining 49,016,019 943,125(2) 47,894 -0- 49,911,250
Manufacturing 15,088,124 1,201,844(3) 36,972 -0- 16,252,996
Other 29,293,167 412,042(4) 16,507,521(5) -0- 13,197,688
------------ ----------- ----------- ------------- -------------
$333,157,559 $ 2,921,175 $16,717,158 $ -0- $ 319,361,576
============ =========== =========== ============= =============
YEAR ENDED DECEMBER 31, 1992:
Marine Transportation $235,747,307 $ 3,358,178(6) $ 52,677 $ 707,441 (6) $ 239,760,249
Industrial Mining 48,087,922 1,545,379(7) 710,127(9) 92,845 49,016,019
Manufacturing 17,797,992 3,622,162(8) 378,026 ( 5,954,004)(11) 15,088,124
Other 43,652,920 200,871 910,948(10) (13,649,676)(12) 29,293,167
------------ ----------- ----------- ------------ -------------
$345,286,141 $ 8,726,590 $ 2,051,778 $(18,803,394) $ 333,157,559
============ =========== =========== ============ =============
YEAR ENDED DECEMBER 31, 1991:
Marine Transportation $235,752,360 $ -0- $ -0- $ (5,053) $ 235,747,307
Industrial Mining 47,487,212 1,880,064(13) 887,040(16) ( 392,314)(17) 48,087,922
Manufacturing 16,737,633 1,139,630(14) 16,271 ( 63,000) 17,797,992
Other 43,368,904 626,702(15) 314,348 ( 28,338) 43,652,920
------------ ----------- ----------- ------------ -------------
$343,346,109 $ 3,646,396 $ 1,217,659 $ ( 488,705) $ 345,286,141
============ =========== =========== ============ =============
</TABLE>
<PAGE> 52
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
Years Ended December 31, 1993, 1992 and 1991
Note 1 - Capitalization of the Registrant's five year vessel inspection costs.
Note 2 - Expansion and replacement of equipment at the Registrant's Texas
Mining Company, California Silica Products Company and Central Silica
Company.
Note 3 - Expansion and replacement of equipment at the Registrant's Ferro
Engineering Plant, ONCo Minerals, Inc., Indiana Manufacturing Company
and Tuscarawas Manufacturing Company.
Note 4 - Leasehold improvements and equipment replacement at the Registrant's
corporate offices.
Note 5 - Sale of Registrant's Licking River Terminal assets and the sale of
the property owned by the Registrant in Ohio.
Note 6 - Capitalization of Registrant's five year vessel inspection costs and
boiler rework to one of Registrant's vessels.
Note 7 - Expansion and replacement of equipment at the Registrant's Texas
Mining Company, Central Silica Company, and California Silica
Company.
Note 8 - Purchase of West Minerals and expansion and replacement at the
Registrant's Ferro Engineering Plant, T & B Foundry Company, Indiana
Manufacturing Company and the Brownsville Briquetting Plant.
Note 9 - Retirement of equipment primarily at Registrant's Central Silica
Company.
Note 10 - Sale of North Carolina sand property and retirement of equipment and
furniture at the Registrant's corporate offices.
Note 11 - Write-off of properties and equipment in connection with the disposal
of the Registrant's T & B Foundry Company and write down of
equipment principally at the Registrant's Canadian Ferro Hot Top
Specialty LTD.
Note 12 - Reclassification of properties and equipment of the Registrant's
discontinued operation, Saginaw Mining Company, amounting to
$13,381,675 and the write-off of land owned by the Registrant in
Tennessee and Minnesota.
Note 13 - Expansion and replacement of equipment at the Registrant's Texas
Mining Company, California Silica Products Company and Central Silica
Company.
<PAGE> 53
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
Years Ended December 31, 1993, 1992 and 1991
Note 14 - Expansion and replacement of equipment principally at the
Registrant's Ferro Engineering Plant, Indiana Manufacturing Company,
Tuscarawas Manufacturing Company and T & B Foundry Company.
Note 15 - Expansion and replacement of equipment and furniture at Registrant's
corporate offices, National Perlite Products Company and Ceredo Dock
Note 16 - Retirement of equipment at the Registrant's Texas Mining Company, and
Central Silica Company.
Note 17 - Write-down of equipment principally at the Registrant's Texas Mining
Company.
<TABLE>
Note 18 - The annual provisions for depreciation have been computed principally
in accordance with the following ranges of lives:
<S> <C>
Vessels 10 - 50 years
Buildings 12 - 40
Dock and dock equipment 5 - 20
Machinery 3 - 15
Mining properties and equipment 3 - 15
Autos and trucks 2 1/2 - 4
Office furniture and fixtures 10 - 15 years
Leasehold improvements Term of Lease
</TABLE>
<PAGE> 54
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
Balance at Additions Balance at
Beginning Charged to Costs Other Charges End of
Classification of Period and Expenses Retirements Add (Deduct) Period
-------------- --------- ------------ ----------- ------------ ------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993:
Marine Transportation $ 99,023,901 $ 8,157,275 $ 124,771 $ -0- $107,056,405
Industrial Mining 29,964,790 2,054,865 47,696 -0- 31,971,959
Manufacturing 7,466,338 1,019,565 36,971 -0- 8,448,932
Other 25,390,838 427,067 16,332,522(1) -0- 9,485,383
------------- ------------ ------------- ----------- ------------
$ 161,845,867 $ 11,658,772 $ 16,541,960 $ -0- $156,962,679
============= ============ ============= =========== ============
YEAR ENDED DECEMBER 31, 1992:
Marine Transportation $ 89,035,845 $ 8,676,694 $ 52,677 $ 1,364,039(2) $ 99,023,901
Industrial Mining 24,350,696 2,346,041 606,582 3,874,635(3) 29,964,790
Manufacturing 10,301,529 1,321,239 378,026 (3,778,404)(4) 7,466,338
Other 34,764,129 441,638 312,905 (9,502,024)(5) 25,390,838
------------- ------------ ------------- ----------- ------------
$ 158,452,199 $ 12,785,612 $ 1,350,190 $(8,041,754) $161,845,867
============= ============ ============= =========== ============
YEAR ENDED DECEMBER 31, 1991:
Marine Transportation $ 81,069,665 $ 7,966,180 $ -0- $ -0- $ 89,035,845
Industrial Mining 22,781,985 2,422,739 854,028 -0- 24,350,696
Manufacturing 9,459,898 857,902 16,271 -0- 10,301,529
Other 26,854,264 1,837,566 306,772 6,379,071(6) 34,764,129
------------- ------------ ------------- ----------- ------------
$ 140,165,812 $ 13,084,387 $ 1,177,071 $ 6,379,071 $158,452,199
============= ============ ============= =========== ============
</TABLE>
<PAGE> 55
SCHEDULE VI - ACCUMULATED DEPRECIATION,
DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT - CONTINUED
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
Years Ended December 31, 1993, 1992 and 1991
Note 1 - Sale of Registrant's Licking River Terminal assets.
Note 2 - Write down of vessels and related equipment of the Registrant's
Columbia Transportation Division.
Note 3 - Write down of assets principally at the Registrant's California
Silica Company and Texas Mining Company.
Note 4 - Disposal of T & B Foundry Company assets.
Note 5 - Reclassification of properties and equipment of the Registrant's
discontinued operation, Saginaw Mining Company, amounting to
$13,133,003 and write down of assets principally at the Registrant's
Saginaw Mining Company and National Perlite Products Company.
Note 6 - Write down of assets at the Registrant's Licking River Terminal
Division and National Perlite Products Company.
<PAGE> 56
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------------------- ----------------------------------- ---------- -----------
Additions
-----------------------------------
Balance at Beginning Charged to Costs Charged to Other Deductions- Balance at
Description of Period and Expenses Accounts-Describe Describe of Period
-------------------- ---------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Deducted from asset accounts:
Allowance for doubtful accounts $ 729,608 $ 1,892,419 $ 539,619(1) $ 2,082,408
Reserves:
Reserve for capacity rationalization 22,437,800 -0- 6,312,600(2) 16,125,200
------------- ----------- ----------- -----------
$ 23,167,408 $ 1,892,419 $ 6,852,219 $18,207,608
============= =========== =========== ===========
Year Ended December 31, 1992:
Deducted from asset accounts:
Allowance for doubtful accounts $ 260,160 $ 593,520 $ 124,072(1) $ 729,608
Reserves:
Reserve for capacity rationalization -0- 22,437,800 -0- 22,437,800
------------- ----------- ----------- -----------
$ 260,160 $23,031,320 $ 124,072 $23,167,408
============= =========== =========== ===========
Year Ended December 31, 1991:
Deducted from asset accounts:
Allowance for doubtful accounts $ 286,186 $ 41,400 $ 67,426(1) $ 260,160
============= =========== =========== ===========
<FN>
Note 1 - Uncollectible accounts written off, net of recoveries.
Note 2 - Payment of the Company's share of Eveleth Mines fixed obligations, including long-term debt.
</TABLE>
<PAGE> 57
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ----------- ----------- ------------ ------------- -------------- --------------
Maxium Average Weighted
Category of Weighted Amount Amount Average
Aggregate Balance at Average Outstanding Outstanding Interest Rate
Short-Term End of Interest During the During the During the
Borrowings Period Rate Period Period (2) Period (3)
- ------------ ------------ ------------ ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Year Ended
December 31, 1993 -0- -0- -0- -0- -0-
Year Ended
December 31, 1992 -0- -0- -0- -0- -0-
Year Ended
December 31, 1991
Notes Payable to
Bank (1) -0- 6.876% $6,000,000 $1,250,000 9.755%
<FN>
(1) Notes payable to Bank represent borrowings under lines of credit borrowing arrangements.
(2) The average amount outstanding during the period was computed by dividing the total of month-end outstanding principal
balances by 12.
(3) The weighted average interest rate during the period was computed by dividing the actual interest expense by average
short-term debt outstanding.
</TABLE>
<PAGE> 58
<TABLE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<CAPTION>
COLUMN A COLUMN B
- ---------------------------------------------- -------------------------------------------------
ITEM CHARGED TO COSTS AND EXPENSES
- ---------------------------------------------- -------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Maintenance and repairs $10,922,116 $11,333,700 $12,852,041
Taxes, other than payroll and
income taxes 1,260,576 1,529,279 1,405,259
<FN>
Amounts for depreciation and amortization of intangible assets, preoperating costs and similar deferrals, as well as royalties and
advertising costs are not presented as such amounts are less than 1% of total sales and operating revenues.
</TABLE>
<PAGE> 59
<TABLE>
Item 14 (a) 3
EXHIBIT INDEX
<CAPTION>
SEC Location or
Exhibit No. Description Sequential Page
----------- ----------- ---------------
<S> <C>
3 (a) Restated Certificate of
Incorporation
(b) By-Laws
4 (a) The Registrant is a party
to instruments, copies of
which will be furnished to the
Securities and Exchange
Commission upon request,
defining the rights of holders
of its long-term debt
identified in Note F of Notes
to Consolidated Financial
Statements
(b) Form of Rights Agreement
10 (a) Form of Supplemental
Pension Agreements with
selected former officers
(b) Agreement with Brent D.
Baird
(c) Trust Agreement for
Oglebay Norton Company
Incentive Savings Plan and
Trust (January 1, 1991
Restatement)
</TABLE>
<PAGE> 60
<TABLE>
<CAPTION>
SEC Location or
Exhibit No. Description Sequential Page
----------- ----------- ---------------
<S> <C> <C>
(d) Form of Change in Control
Agreements with Nine Executive
Officers
(e) Form of Right of First
Refusal Agreements with seven
Directors
(f) Agreement with John D.
Weil
(g) Employment
Agreement with
Chairman, Pres-
ident and Chief
Executive Officer
11 Statement re: Computation of Not Applicable
Per Share Earnings
12 Statement re: Computations of Not Applicable
Ratios
13 1993 Annual Report to Not Applicable
Stockholders
18 Letter re: Change in Not Applicable
Accounting Principles
21 Subsidiaries of the Registrant
22 Published Report Regarding Not Applicable
Matters Submitted to Vote of
Security Holders
23 Consent of Independent
Auditors
24 Power of Attorney Not Applicable
28 Information from reports Not Applicable
furnished to state insurance
regulatory authorities
</TABLE>
<PAGE> 61
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------------------- ----------------------------------- ---------- -----------
Additions
-----------------------------------
Balance at Beginning Charged to Charged to Other Deductions- Balance at
Description of Period CostsandExpenses Accounts-Describe Describe of Period
-------------------- ---------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Deducted from asset accounts:
Allowance for doubtful accounts $ 729,608 $ 1,892,419 $ 539,619(1) $ 2,082,408
Reserves:
Reserve for capacity rationalization 22,437,800 -0- 6,312,600(2) 16,125,200
------------- ----------- ----------- -----------
$ 23,167,408 $ 1,892,419 $ 6,852,219 $18,207,608
============= =========== =========== ===========
Year Ended December 31, 1992:
Deducted from asset accounts:
Allowance for doubtful accounts $ 260,160 $ 593,520 $ 124,072(1) $ 729,608
Reserves:
Reserve for capacity rationalization -0- 22,437,800 -0- 22,437,800
------------- ----------- ----------- -----------
$ 260,160 $23,031,320 $ 124,072 $23,167,408
============= =========== =========== ===========
Year Ended December 31, 1991:
Deducted from asset accounts:
Allowance for doubtful accounts $ 286,186 $ 41,400 $ 67,426(1) $ 260,160
============= =========== =========== ===========
<FN>
Note 1 - Uncollectible accounts written off, net of recoveries.
Note 2 - Payment of the Company's share of Eveleth Mines fixed obligations, including long-term debt.
</TABLE>
<PAGE> 62
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
Balance at Balance at
Beginning Additions Retirements Other Charges End of
Classification of Period at Cost or Sales Add (Deduct) Period
-------------- --------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993:
Marine Transportation $239,760,249 $ 364,164(1) $ 124,771 $ -0- $ 239,999,642
Industrial Mining 49,016,019 943,125(2) 47,894 -0- 49,911,250
Manufacturing 15,088,124 1,201,844(3) 36,972 -0- 16,252,996
Other 29,293,167 412,042(4) 16,507,521(5) -0- 13,197,688
------------ ----------- ----------- ------------- -------------
$333,157,559 $ 2,921,175 $16,717,158 $ -0- $ 319,361,576
============ =========== =========== ============= =============
YEAR ENDED DECEMBER 31, 1992:
Marine Transportation $235,747,307 $ 3,358,178(6) $ 52,677 $ 707,441(6) $ 239,760,249
Industrial Mining 48,087,922 1,545,379(7) 710,127(9) 92,845 49,016,019
Manufacturing 17,797,992 3,622,162(8) 378,026 ( 5,954,004)(11) 15,088,124
Other 43,652,920 200,871 910,948(10) (13,649,676)(12) 29,293,167
------------ ----------- ----------- ------------ -------------
$345,286,141 $ 8,726,590 $ 2,051,778 $(18,803,394) $ 333,157,559
============ =========== =========== ============ =============
YEAR ENDED DECEMBER 31, 1991:
Marine Transportation $235,752,360 $ -0- $ -0- $ (5,053) $ 235,747,307
Industrial Mining 47,487,212 1,880,064(13) 887,040(16) ( 392,314)(17) 48,087,922
Manufacturing 16,737,633 1,139,630(14) 16,271 ( 63,000) 17,797,992
Other 43,368,904 626,702(15) 314,348 ( 28,338) 43,652,920
------------ ----------- ----------- ------------ -------------
$343,346,109 $ 3,646,396 $ 1,217,659 $ ( 488,705) $ 345,286,141
============ =========== =========== ============ =============
</TABLE>
<PAGE> 1
Exhibit 3(a)
RESTATED CERTIFICATE OF INCORPORATION
OF
OGLEBAY NORTON COMPANY
[with amendments approved by the
stockholders on May 4, 1988 and on April 19, 1989]
FIRST. The name of the Corporation is "Oglebay
Norton Company."
SECOND. The principal office and place of business
of the Corporation in the State of Delaware is located at 100 West 10th Street,
Wilmington, County of New Castle, and the name of the resident agent in charge
thereof is The Corporation Trust Company.
THIRD. The nature of the business to be transacted
by the Corporation and the objects and purposes to be promoted and carried on
by it are:
(a) To explore for, mine, process and merchandise
ores, minerals, and metals of any and every kind, and to develop,
manufacture, and merchandise their products, by-products, and
derivatives;
(b) To engage in the transportation of persons and
property by water, and, in connection therewith, to engage in the
docking, repairing, altering, storing, and salvaging of water craft of
any and every kind, and in lighterage, wharfage, and the loading,
unloading, elevating, storing, and warehousing of products and
commodities of any and every kind;
(c) To develop, manufacture, and merchandise
machinery, equipment, apparatus, tools, accessories, and supplies for
use in the mining or processing of ores, minerals, and metals or in
the manufacture of their products, by-products, and derivatives, and,
generally and without limitation by reason of the foregoing, to engage
in the development, manufacturing, and merchandising of products and
commodities of any and every kind;
(d) To render managerial and advisory services with
reference to the mining, processing, and merchandising of ores,
minerals,
<PAGE> 2
and metals, the development, manufacturing, and merchandising
of their products, by-products, and derivatives, the
transportation of persons and property by water, and the development,
manufacturing, and merchandising of products and commodities of any
and every kind;
(e) To purchase, lease, charter, construct, erect,
or otherwise acquire, to own, hold, use, trade or deal in or with,
develop, maintain, improve, manage, or operate, and to sell, lease,
grant, charter, assign, transfer, convey, mortgage, pledge, or
otherwise dispose of or encumber property of any and every kind, real,
personal, or mixed, including, but without limitation upon the
generality of the foregoing, mines, mine plants and facilities,
manufacturing plants and facilities, town sites, commercial and
residential buildings, and buildings and structures of any and every
kind, machinery and equipment of any and every kind, ships, barges,
scows, tugs, and water craft of any and every kind, docks, piers,
wharves, elevators, warehouses, terminals, and transportation and
storage facilities of any and every kind, and the stock, bonds, and
other obligations of any corporation, domestic or foreign, any
government, or any governmental agency or subdivision, and including
rights and interests in property and powers, privileges, and
franchises of any and every kind;
(f) To engage in scientific and other research, to
develop or otherwise acquire, own, hold, use, and dispose of
inventions, devices, formulae, processes, and designs of any and every
kind, and to apply for, register, take licenses in respect of, or
otherwise acquire, own, hold, use, sell, assign, grant licenses and
sublicenses under, or otherwise dispose of or encumber letters patent,
patent rights, patent licenses, and privileges, copyrights,
trademarks, trade names, and rights analogous thereto of any and every
kind;
(g) To issue storage, dock, and warehouse receipts,
negotiable and non-negotiable, covering goods, wares, merchandise, or
any commercial commodity or thing of value, to collect and receipt for
dockage, wharfage, and storage dues and other compensation, and to
make
-2-
<PAGE> 3
advances to cover freights, duties, fire and marine insurance, and
liens of any and every kind on goods, wares, merchandise, or other
property received for storage or for the purpose of being warehoused
or forwarded, and to lend money or make advances on the pledge of
goods, wares, merchandise, or other property or on the pledge of
storage, dock, or warehouse receipts therefor;
(h) To enter into and perform contracts of any and
every kind with any person, firm, association, corporation,
government, or any governmental agency or subdivision, without
limitation as to amount;
(i) To lend its uninvested funds to any person,
firm, association, corporation, government, or governmental agency or
subdivision in such amounts, for such periods of time, upon such
terms, and with such security, if any, as it may determine;
(j) To borrow money or otherwise use its credit for
its corporate purposes, without limitation as to amount, to execute,
accept, endorse, issue, and deliver promissory notes, bills of
exchange, bonds, debentures, and other obligations and evidences of
indebtedness, and to secure the payment of any such obligations by
mortgage, pledge, deed of trust, or otherwise;
(k) To guarantee or become surety for the
performance of the obligations or undertakings of any person, firm,
association, or corporation in which it may have an interest;
(l) To carry on any lawful business whatsoever in
connection with or incidental to the foregoing, or which has for its
object the promotion, directly or indirectly, of the interests of the
Corporation, to do any and all lawful acts and things which it may
deem necessary, suitable, or convenient for the accomplishment of any
of its purposes, the promotion of its interests, or the enhancement of
the value of its property, and to exercise any and all powers, rights,
and privileges which a corporation may now or hereafter be organized
to exercise under the laws of the State of Delaware or any law
amendatory thereof, supplemental thereto, or in substitution therefor;
and
-3-
<PAGE> 4
(m) To carry out any of its purposes or exercise any
of its powers either as principal or as agent or in any other lawful
capacity, in any state of the United States, in any territory or
possession thereof, or in any foreign country, and to carry out such
purposes and exercise such powers either alone or as a participant
with others in any lawful transaction, venture, combination, or
organization. The foregoing clauses shall be construed both as
objects and as powers, and each as an independent right and power, and
it is hereby expressly provided that the enumeration herein of
specific objects and powers shall not be held to limit or restrict in
any manner the general powers of the Corporation.
FOURTH. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is
15,000,000, of which 5,000,000 shares shall be Preferred Stock without par
value, and 10,000,000 shares shall be Common Stock with a par value of $1 per
share. The Preferred Stock may be issued from time to time in one or more
series. Each series shall consist of the number of shares and shall have such
designation, such voting powers, full or limited, or no voting powers, and such
preferences and relative, participating, optional, or other special rights and
qualifications, limitations, or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
series adopted by the Board of Directors of the Corporation. Authority is
granted to the Board of Directors of the Corporation, subject to the provisions
of this Article FOURTH, to authorize the issue of shares of Preferred Stock in
one or more series and, with respect to each such series, to fix, by such
resolution or resolutions, the number of shares of which it shall consist and
its designation, voting powers, preferences, and relative, participating,
optional, or other special rights and any qualifications, limitations, or
restrictions thereof; provided, however, that (i) the aggregate number of
shares of Common Stock of the Corporation into which all shares of Preferred
Stock shall at any time be convertible shall not exceed 5,000,000, subject to
appropriate adjustment in the event of any stock dividend, stock split-up, or
other change in the Corporation's Common Stock; and (ii) the price at which
shares of Preferred Stock of any series shall at any time be convertible into
shares of Common Stock shall be not less than the fair market value, as
determined by the directors, of the Company's Common Stock on the date on which
the conversion rights of the shares of Preferred Stock of such series are fixed
by
-4-
<PAGE> 5
resolution or resolutions adopted by the Board of Directors, subject to
appropriate adjustment in the event of any stock dividend, stock split- up, or
other change in the Corporation's Common Stock. All shares of any series of
Preferred Stock issued at different times may differ as to the dates of issue
and the dates from which dividends thereon shall accumulate.
DIVISION A
EXPRESS TERMS
OF
5-1/2% CUMULATIVE CONVERTIBLE
PREFERRED STOCK, SERIES A
There is hereby established a first series of
Preferred Stock; the designation, number, voting powers, preferences and rights
and the qualifications, limitations, or restrictions thereof are as follows:
Section 1. Designation of Series. The series shall
be designated "5-1/2% Cumulative Convertible Preferred Stock, Series A"
("Series A Preferred Stock").
Section 2. Number of Shares. The number of shares
of Series A Preferred Stock is 148,950, which number the Board of Directors may
increase or decrease (but not below the number of shares of the series then
outstanding).
Section 3. Dividends. (a) The holders of shares of
Series A Preferred Stock shall be entitled to receive, when and as declared by
the Board of Directors out of any funds legally available for the declaration
of dividends, cumulative dividends at the annual rate of $2.75 per share, and
no more, payable quarterly in cash, on the fifteenth day of March, June,
September, and December of each year, hereinafter referred to as the "quarterly
dividend date," to stockholders of record on such dates respectively preceding
the payment thereof as may be fixed by the Board of Directors in declaring any
such dividends. Such dividends shall be cumulative from the date of issuance,
and the first such dividend shall be prorated from the date of issuance.
Accumulations of dividends on shares of Series A Preferred Stock shall not bear
interest.
(b) So long as any shares of Series A Preferred
Stock shall remain outstanding, no dividends or other distributions (other than
dividends payable in shares ranking junior to the Series A Preferred Stock,
both as to dividends and in liquidation) shall be paid upon or set apart for or
distributed with respect to any shares ranking
-5-
<PAGE> 6
junior to the Series A Preferred Stock (either as to dividends or assets) at
any time when there exists a default with respect to the payment of dividends
with respect to outstanding shares of Series A Preferred Stock.
Section 4. Liquidation Preference. (a) In the
event of any liquidation, dissolution, or winding up of the Corporation, or any
distribution of its capital, the holders of shares of the Series A Preferred
Stock shall be entitled to receive, from the assets of the Corporation, payment
in cash of an amount equal to $50 per share, plus a further amount equal to all
accrued and unpaid cumulative dividends on the Series A Preferred Stock to the
date of payment of the amount due pursuant to such liquidation, dissolution, or
winding up of the Corporation, before any distribution of assets shall be made
to the holders of any class of shares ranking junior to the Series A Preferred
Stock, either as to dividends or assets. If, upon such liquidation,
dissolution, winding up, or distribution of capital, the assets thus
distributable to the holders of shares of Series A Preferred Stock shall be
insufficient to permit the payment to such holders of the preferential amounts
aforesaid, then such assets or the proceeds thereof shall be distributed
ratably among the holders of shares of Series A Preferred Stock according to
the number of such shares held by each. After such payment to the holders of
shares of Series A Preferred Stock, the remaining assets and funds of the
Corporation shall be divided and distributed among the holders of shares
ranking junior to the Series A Preferred Stock, then outstanding, according to
their respective interests.
(b) The liquidation, dissolution, winding up, or
distribution of capital, as such terms are used in the foregoing paragraph,
shall not be deemed to include any consolidation or merger of the Corporation
with another corporation or any transfer substantially as an entirety of the
property and assets of the Corporation to another corporation.
Section 5. Redemption and Purchase. (a) At the
election of the Corporation, to be exercised by resolution adopted by its Board
of Directors, all or any part of the shares of Series A Preferred Stock may be
redeemed, at any time and from time to time subsequent to December 31, 1976, on
any quarterly dividend payment date upon not less than 30 days nor more than 60
days' previous notice given by first-class mail, postage prepaid, to the
holders of record thereof at their addresses as the same appear on the records
of the Corporation and by (i) paying $50 for each share thereof called for
redemption, plus a
-6-
<PAGE> 7
further amount equal to all accrued and unpaid cumulative dividends on the
Series A Preferred Stock to the date fixed for redemption, or, in lieu of such
payment, by (ii) depositing the redemption price in cash on or prior to said
redemption date with such bank or trust company in the City of Cleveland, Ohio,
as may be designated by the Board of Directors of the Corporation in trust for
payment on the redemption date to the holders of the shares of Series A
Preferred Stock so to be redeemed. In case of the redemption of less than all
of the outstanding shares of Series A Preferred Stock, the shares to be
redeemed may be selected by lot or pro rata, or by call of all or any part of
the shares owned by one or more holders of such shares, or by such other method
as the Board of Directors in its discretion may determine, and notice, as above
provided, shall be given to the holders of record whose shares have been so
selected for redemption. On and after the date fixed in any such notice as the
date of redemption of the shares of Series A Preferred Stock, unless default
shall be made by the Corporation in the payment and/or deposit of the
redemption price pursuant to such notice and to the provisions hereof, all
dividends on the shares of Series A Preferred Stock so called for redemption
shall cease to accrue, and on such date or on deposit in trust as aforesaid of
funds sufficient for such redemption (notice of redemption having been given as
aforesaid), whether said deposit shall have been made on said redemption date
or prior thereto, all rights of the holders of said shares of Series A
Preferred Stock as stockholders of the Corporation shall cease and determine
except the right to receive the redemption price and no more from the
Corporation or from a depositary as above described, upon surrender of their
certificates properly endorsed. If the holders of the shares of Series A
Preferred Stock which shall have been called for redemption shall not, within
six years after such deposit, claim the amount deposited for the redemption of
their shares, 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.
(b) The Corporation may also, from time to time,
purchase or otherwise acquire outstanding shares of Series A Preferred Stock.
(c) Any shares of Series A Preferred Stock which are
redeemed or purchased by the Corporation or which are converted into Common
Stock of the Corporation pursuant to the conversion privilege shall have the
status of
-7-
<PAGE> 8
authorized but unissued shares of Preferred Stock without designation of any
series.
Section 6. Conversion Privilege. (a) Subject to
and upon compliance with the provisions of this Section 6, the shares of Series
A Preferred Stock may, at the option of the holder, at any time (in the case of
shares called for redemption, then until and including the close of business on
the date fixed for redemption but not thereafter if payment of the redemption
price has been duly provided for by the date fixed for redemption), be
converted into shares of Common Stock (as such shares shall be constituted at
the conversion date) at the conversion price in effect at the conversion date.
(b) The holder of each share of Series A Preferred
Stock may exercise the conversion privilege in respect thereof by delivering to
any transfer agent of the shares of Series A Preferred Stock the certificate
for the share to be converted accompanied by written notice that the holder
elects to convert such share. Conversion shall be deemed to have been effected
immediately prior to the close of business on the date when such delivery is
made, and such date is referred to in this Section 6 as the "conversion date."
On the conversion date or as promptly thereafter as practicable, the
Corporation shall issue and deliver to the holder of the shares of Series A
Preferred Stock surrendered for conversion, or on his written order, a
certificate for the number of full shares of Common Stock, issuable upon the
conversion of such shares of Series A Preferred Stock and a check or cash in
respect of any fraction of a share as provided in paragraph (c) of this Section
6. The person in whose name the stock certificate is to be issued shall be
deemed to have become a holder of shares of Common Stock of record on the
conversion date. No adjustment shall be made for any dividends accrued on
shares of Series A Preferred Stock surrendered for conversion or for dividends
on the shares of Common Stock issued on conversion.
(c) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of Series A Preferred Stock.
If more than one share of Series A Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares so surrendered. If any fractional interest in a
share of Common Stock would otherwise be delivered upon the conversion of any
shares of Series A Preferred Stock, the Corporation shall in lieu of
-8-
<PAGE> 9
delivering a fractional share therefor make an adjustment therefor in cash at
the current market value thereof, computed (to the nearest cent) on the basis
of the mean between the highest and lowest prices at which the shares of Common
Stock are traded on any exchange on which they may be listed on the last
business day before the conversion date or, if no sale of shares of Common
Stock shall have been made on such exchange on that day, the mean between the
bid and asked prices on such exchange at the close of the market on such day;
if the shares of Common Stock are not listed on any exchange, the basis for
determining the current market value thereof shall be the mean between the
highest and lowest prices at which the shares of Common Stock are traded on the
Cleveland over-the-counter market on such day or, if no sale of shares of
Common Stock shall have been made on such a day, then the mean between the bid
and asked prices at the close of the market on such day.
(d) Unless and until an adjusted conversion price is
required to be computed as hereinafter provided, the conversion price per share
of Common Stock shall be $50. The number of shares of Common Stock issuable
upon conversion of one share of Series A Preferred Stock shall be determined by
dividing $50 by the conversion price then in effect.
(e) The conversion price shall be adjusted from time
to time as follows:
(1) If the Corporation splits or combines the
outstanding shares of Common Stock, the conversion price shall be
proportionately decreased in the case of a split or increased in the
case of a combination, so as appropriately to reflect the same, in
each case as of the opening of business on the day following the day
on which such split or combination became effective. For this
purpose, any stock dividend shall be considered a split of the
outstanding shares as of the close of business on the dividend record
date.
(2) If the Corporation shall issue rights or
warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the current average market price per share of Common Stock
at the record date mentioned below, the conversion price shall be
reduced by a price determined by multiplying the conversion
-9-
<PAGE> 10
price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered would purchase
at such current average market price and the denominator of which
shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase. Such
adjustments shall be made whenever such rights or warrants are issued
and shall become effective retroactively immediately after the opening
of business on the day following the record date for the determination
of stockholders entitled to receive such rights or warrants.
For purposes of the foregoing, the current average
market price of a share of Common Stock on any day shall be deemed to
be the average of the daily current market value per share of Common
Stock (computed on the basis outlined in paragraph (c) of this Section
6) for the ten consecutive business days commencing 25 business days
before the day in question.
(3) Whenever the conversion price is adjusted as
herein provided, the Corporation shall forthwith place on file with
the transfer agents for the Series A Preferred Stock a statement
signed by the President or a Vice President of the Corporation and by
its Treasurer or its Secretary or an Assistant Treasurer showing in
detail the facts requiring such adjustment and the conversion price
after such adjustment and shall exhibit the same from time to time to
any holder of shares of Series A Preferred Stock desiring an
inspection thereof.
(f) In case of any reclassification or change of
outstanding shares of Common Stock (except a split or combination, or a change
from no par value to par value, or a change in par value, or a change from par
value to no par value), provision shall be made as part of the terms of such
reclassification or change that the holder of each share of Series A Preferred
Stock then outstanding shall have the right to receive upon the conversion of
such share, at the conversion price which otherwise would be in effect at the
time of conversion, with the same protection
-10-
<PAGE> 11
against dilution as herein provided, the same kind and amount of stock and
other securities and property as he would own or be entitled to receive upon
the happening of any of the events described above had such share been
converted immediately prior to the happening of the event.
(g) In case the Corporation shall be consolidated
with or shall merge into any other corporation, provision shall be made as a
part of the terms of such consolidation or merger whereby the holder of any
share of Series A Preferred Stock outstanding immediately prior to such event
shall thereafter be entitled to such conversion privilege with respect to
securities of the Corporation resulting from such consolidation or merger as
shall be substantially equivalent to the conversion privilege herein specified.
(h) The issuance of stock certificates on
conversions of shares of Series A Preferred Stock shall be without charge to
the converting stockholder for any tax in respect to the issuance thereof. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect to any transfer involved in the issuance and delivery of shares in
any name other than that of the holder of the shares of Series A Preferred
Stock converted, and the Corporation shall not be required to issue or deliver
any such stock certificates unless and until the person or persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.
(i) The Corporation hereby reserves and shall at all
times reserve and keep available, free from pre-emptive right, out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the shares of Series A Preferred Stock, such number of its duly authorized
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series A Preferred Stock.
(j) In case at any time:
(1) the Corporation shall split or combine its
outstanding shares of Common Stock or pay any dividend upon its shares
of Common Stock payable in its shares of Common Stock and such
dividend shall be in excess of 5%; or
(2) the Corporation shall authorize the granting to
the holders of its shares of
-11-
<PAGE> 12
Common Stock of rights to subscribe for or purchase any shares of any
class or of any other rights; or
(3) the Corporation shall authorize the distribution
to all holders of its shares of Common Stock of evidences of
indebtedness or other assets (other than cash dividends);
then, in any of such cases, the Corporation shall give written notice, by
first-class mail, postage prepaid, to the transfer agent for the Series A
Preferred Stock and to each holder of record of shares of Series A Preferred
Stock, at his address then appearing upon the records of the Corporation, of
the record date or of the date on which the transfer books of the Corporation
shall close with respect to such action. Such notice shall be given at least
20 days prior to the action in question and not less than ten days prior to the
record date on which the Corporation's transfer books are closed with respect
thereto.
Section 7. Voting Rights. Each holder of shares of
Series A Preferred Stock shall be entitled to one vote for each share held and
except as otherwise by law provided, the holders of Series A Preferred Stock
and the holders of Common Stock of the Corporation shall vote together as one
class.
DIVISION B
EXPRESS TERMS
OF
5% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OGLEBAY NORTON COMPANY
There is hereby established a second series of
Preferred Stock; the designation, number, voting powers, preferences and rights
and qualifications, limitations, or restrictions thereof are as follows:
Section 1. Designation of Series. The series shall
be designated "5% Cumulative Convertible Preferred Stock, Series B" ("Series B
Preferred Stock").
Section 2. Number of Shares. The number of shares
of Series B Preferred Stock is 40,000, which number the Board of Directors may
increase or decrease (but not below the number of shares of the series then
outstanding).
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Section 3. Dividends. (a) The holder of shares of
Series B Preferred Stock shall be entitled to receive, when and as declared by
the Board of Directors out of any funds legally available for the declaration
of dividends, cumulative dividends at the annual rate of $2.50 per share, and
no more, payable quarterly in cash, on the fifteenth day of March, June,
September, and December of each year, hereinafter referred to as the "quarterly
dividend date," to stockholders of record on such dates respectively preceding
the payment thereof as may be fixed by the Board of Directors in declaring any
such dividends. Such dividends shall be cumulative from the date of issuance,
and the first such dividend shall be prorated from the date of issuance.
Accumulatives of dividends on shares of Series B Preferred Stock shall not bear
interest.
(b) So long as any shares of Series B Preferred
Stock shall remain outstanding, no dividends or other distributions (other than
dividends payable in shares ranking junior to the Series B Preferred Stock,
both as to dividends and in liquidation) shall be paid upon or set apart for or
distributed with respect to any shares ranking junior to the Series B Preferred
Stock (either as to dividends or assets) at any time when there exists a
default with respect to the payment of dividends with respect to outstanding
shares of Series B Preferred Stock.
Section 4. Liquidation Preference. (a) In the
event of any liquidation, dissolution, or winding up of the Corporation, or any
distribution of its capital, the holders of shares of the Series B Preferred
Stock shall be entitled to receive, from the assets of the Corporation, payment
in cash of an amount equal to $50 per share, plus a further amount equal to all
accrued and unpaid cumulative dividends on the Series B Preferred Stock to the
date of payment of the amount due pursuant to such liquidation, dissolution, or
winding up of the Corporation, before any distribution of assets shall be made
to the holders of any class of shares ranking junior to the Series B Preferred
Stock, either as to dividends or assets. If, upon such liquidation,
dissolution, winding up, or distribution of capital, the assets thus
distributable to the holders of shares of Series B Preferred Stock shall be
insufficient to permit the payment to such holders of the preferential amounts
aforesaid, then such assets or proceeds thereof shall be distributed ratably
among the holders of shares of Series B Preferred Stock according to the number
of such shares held by each. After such payment to the holders of shares of
Series B Preferred Stock, the remaining assets and funds of the Corporation
shall be divided and distributed among the holders of shares ranking junior to
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<PAGE> 14
the Series B Preferred Stock, then outstanding, according to their respective
interests.
(b) The liquidation, dissolution, winding up, or
distribution of capital, as such terms are used in the foregoing paragraph,
shall not be deemed to include any consolidation or merger of the Corporation
with another corporation or any transfer substantially as an entirety of the
property and assets of the Corporation to another corporation.
Section 5. Redemption and Purchase. (a) At the
election of the Corporation, to be exercised by resolution adopted by its Board
of Directors, all or any part of the shares of Series B Preferred Stock may be
redeemed, at any time and from time to time subsequent to December 31, 1976, on
any quarterly dividend payment date upon not less than 30 days nor more than 60
days' previous notice given by first-class mail, postage prepaid, to the
holders of record thereof at their addresses as the same appear on the records
of the Corporation and by (a) paying for each share thereof called for
redemption $50, plus a further amount equal to all accrued and unpaid
cumulative dividends on the Series B Preferred Stock to the date fixed for
redemption, or, in lieu of such payment, by (b) depositing the redemption price
in cash on or prior to said redemption date with such bank or trust company in
the City of Cleveland, Ohio, as may be designated by the Board of Directors of
the Corporation in trust for payment on the redemption date to the holders of
the shares of Series B Preferred Stock so to be redeemed. In case of the
redemption of less than all of the outstanding shares of Series B Preferred
Stock, the shares to be redeemed may be selected by lot or pro rata, or by call
of all or any part of the shares owned by one or more holders of such shares,
or by such other method as the Board of Directors in its discretion may
determine, and notice, as above provided, shall be given to the holders of
record whose shares have been so selected for redemption. On and after the
date fixed in any such notice as the date of redemption of the shares of Series
B Preferred Stock, unless default shall be made by the Corporation in the
payment and/or deposit of the redemption price pursuant to such notice and to
the provisions hereof, all dividends on the shares of Series B Preferred Stock
so called for redemption shall cease to accrue, and on such date or on deposit
in trust as aforesaid of funds sufficient for such redemption (notice of
redemption having been given as aforesaid), whether said deposit shall have
been made on said redemption date or prior thereto, all rights of the holders
of said shares of Series B Preferred Stock as stockholders of the Corporation
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<PAGE> 15
shall cease and determine except the right to receive the redemption price and
no more from the Corporation or from a depositary as above described, upon
surrender of their certificates properly endorsed. If the holders of the
shares of Series B Preferred Stock which shall have been called for redemption
shall not, within six years after such deposit, claim the amount deposited for
the redemption of their shares, 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.
(b) The Corporation may also, from time to time,
purchase or otherwise acquire outstanding shares of Series B Preferred Stock.
(c) Any shares of Series B Preferred Stock which are
redeemed or purchased by the Corporation or which are converted into Common
Stock of the Corporation pursuant to the conversion privilege shall have the
status of authorized but unissued shares of Preferred Stock without designation
of any series.
Section 6. Conversion Privilege. (a) Subject to
and upon compliance with the provisions of this Section 6, the shares of Series
B Preferred Stock may, at the option of the holder, at any time (in the case of
shares called for redemption, then until and including the close of business on
the date fixed for redemption but not thereafter if payment of the redemption
price has been duly provided for by the date fixed for redemption), be
converted into shares of Common Stock (as such shares shall be constituted at
the conversion date) at the conversion price in effect at the conversion date.
(b) The holder of each share of Series B Preferred
Stock may exercise the conversion privilege in respect thereof by delivering to
any transfer agent of the shares of Series B Preferred Stock the certificate
for the share to be converted accompanied by written notice that the holder
elects to convert such share. Conversion shall be deemed to have been effected
immediately prior to the close of business on the date when such delivery is
made, and such date is referred to in this Section 6 as the "conversion date."
On the conversion date or as promptly thereafter as practicable the Corporation
shall issue and deliver to the holder of the shares of Series B Preferred Stock
surrendered for conversion, or on his written order, a certificate for the
number of full shares of Common Stock issuable upon the conversion of such
shares of Series B
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Preferred Stock and a check or cash in respect of any fraction of a share as
provided in paragraph (c) of this Section 6. The person in whose name the
stock certificate is to be issued shall be deemed to have become a holder of
shares of Common Stock of record on the conversion date. No adjustment shall
be made for any dividends accrued on shares of Series B Preferred Stock
surrendered for conversion or for dividends on the shares of Common Stock
issued on conversion.
(c) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of Series B Preferred Stock.
If more than one share of Series B Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares so surrendered. If any fractional interest in a
share of Common Stock would otherwise be delivered upon the conversion of any
shares of Series B Preferred Stock, the Corporation shall in lieu of delivering
a fractional share therefor make an adjustment therefor in cash at the current
market value thereof, computed (to the nearest cent) on the basis of the mean
between the highest and lowest prices at which the shares of Common Stock are
traded on any exchange on which they may be listed on the last business day
before the conversion date or, if no sale of shares of Common Stock shall have
been made on such exchange on that day, the mean between the bid and asked
prices on such exchange at the close of the market on such day; if the shares
of Common Stock are not listed on any exchange, the basis for determining the
current market value thereof shall be the mean between the highest and lowest
prices at which the shares of Common Stock are traded on the Cleveland
over-the- counter market on such day, or, if no sale of shares of Common Stock
shall have been made on such day, then the mean between the bid and asked
prices at the close of the market on such day.
(d) Unless and until an adjusted conversion price is
required to be computed as hereinafter provided, the conversion price per share
of Common Stock shall be $50. The number of shares of Common Stock issuable
upon conversion of one share of Series B Preferred Stock shall be determined by
dividing $50 by the conversion price then in effect.
(e) The conversion price shall be adjusted from time
to time as follows:
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<PAGE> 17
(1) If the Corporation splits or combines the
outstanding shares of Common Stock, the conversion price shall be
proportionately decreased in the case of a split or increased in the
case of a combination, so as appropriately to reflect the same, in
each case as of the opening of business on the day following the day
on which such split or combination became effective. For this
purpose, any stock dividend shall be considered a split of the
outstanding shares as of the close of business on the dividend record
date.
(2) If the Corporation shall issue rights or
warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the current average market price per share of Common Stock
at the record date mentioned below, the conversion price shall be
reduced to a price determined by multiplying the conversion price by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at such
current average market price and the denominator of which shall be the
number of shares of Common Stock outstanding on the date of issuance
of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustments
shall be made whenever such rights or warrants are issued and shall
become effective retroactively immediately after the opening of
business on the day following the record date for the determination of
stockholders entitled to receive such rights or warrants.
For purposes of the foregoing, the current average
market price of a share of Common Stock on any day shall be deemed to
be the average of the daily current market value per share of Common
Stock (computed on the basis outlined in paragraph (c) of this Section
6) for the ten consecutive business days commencing 25 business days
before the day in question.
(3) Whenever the conversion price is adjusted as
herein provided, the Corporation
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<PAGE> 18
shall forthwith place on file with the transfer agents for the Series
B Preferred Stock a statement signed by the President or a Vice
President of the Corporation and by its Treasurer or its Secretary or
an Assistant Treasurer showing in detail the facts requiring such
adjustment and the conversion price after such adjustment and shall
exhibit the same from time to time to any holder of shares of Series B
Preferred Stock desiring an inspection thereof.
(f) In case of any reclassification or change of
outstanding shares of Common Stock (except a split or combination, or a change
from no par value to par value, or a change in par value, or a change from par
value to no par value), provision shall be made as part of the terms of such
reclassification or change that the holder of each share of Series B Preferred
Stock then outstanding shall have the right to receive upon the conversion of
such share, at the conversion price which otherwise would be in effect at the
time of conversion, with the same protection against dilution as herein
provided, the same kind and amount of stock and other securities and property
as he would own or be entitled to receive upon the happening of any of the
events described above had such share been converted immediately prior to the
happening of the event.
(g) In case the Corporation shall be consolidated
with or shall merge into any other corporation, provision shall be made as a
part of the terms of such consolidation or merger whereby the holder of any
share of Series B Preferred Stock outstanding immediately prior to such event
shall thereafter be entitled to such conversion privilege with respect to
securities of the corporation resulting from such consolidation or merger as
shall be substantially equivalent to the conversion privilege herein specified.
(h) The issuance of stock certificates on
conversions of shares of Series B Preferred Stock shall be without charge to
the converting stockholder for any tax in respect to the issuance thereof. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect to any transfer involved in the issuance and delivery of shares in
any name other than that of the holder of the shares of Series B Preferred
Stock converted, and the Corporation shall not be required to issue or deliver
any such stock certificates unless and until the person or persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax
or
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<PAGE> 19
shall have established to the satisfaction of the Corporation that such tax has
been paid.
(i) The Corporation hereby reserves and shall at all
times reserve and keep available, free from pre-emptive right, out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the shares of Series B Preferred Stock, such number of its duly authorized
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series B Preferred Stock.
(j) In case at any time:
(1) the Corporation shall split or combine its
outstanding shares of Common Stock or pay any dividend upon its shares
of Common Stock payable in its shares of Common stock and such
dividend shall be in excess of 5%; or
(2) the Corporation shall authorize the granting to
the holders of its shares of Common Stock of rights to subscribe for
or purchase any shares of any class or of any other rights; or
(3) the Corporation shall authorize the distribution
to all holders of its shares of Common Stock of evidences of
indebtedness or other assets (other than cash dividends);
then, in any of such cases, the Corporation shall give written notice, by
first-class mail, postage prepaid, to the transfer agent for the Series B
Preferred Stock and to each holder of record of shares of Series B Preferred
Stock, at his address then appearing upon the records of the Corporation, of
the record date or of the date on which the transfer books of the Corporation
shall close with respect to such action. Such notice shall be given at least
20 days prior to the action in question and not less than ten days prior to the
record date on which the Corporation's transfer books are closed with respect
thereto.
Section 7. Voting Rights. Each holder of shares of
Series B Preferred Stock shall be entitled to one vote for each share held and,
except as otherwise by law provided, the holders of Series B Preferred Stock
and the holders of Common Stock of the Corporation shall vote together as one
class.
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<PAGE> 20
DIVISION C
EXPRESS TERMS
OF
SERIES C $10 PREFERRED STOCK
There is hereby established a third series of
Preferred Stock; the designation, number, voting powers, preferences and rights
and the qualifications, limitation, or restrictions thereof are as follows:
Section 1. Designation. The shares of such series
are designated as the "Series C $10.00 Preferred Stock" (the "Series C
Preferred Stock").
Section 2. Authorized Number of Shares; Fractional
Shares. The authorized number of shares constituting the Series C Preferred
Stock is 100,000. Series C Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series
C Preferred Stock.
Section 3. Dividends and Distributions. (A)
Subject to any prior and superior rights of the holders of any series of
Preferred Stock ranking prior and superior to the shares of Series C Preferred
Stock with respect to dividends that may be authorized by the Restated
Certificate of Incorporation, the holders of shares of Series C Preferred Stock
shall be entitled prior to the payment of any dividends on shares ranking
junior to the Series C Preferred Stock to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June, September
and December 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 share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $10.00 or (b) subject to the provisions 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 shares of
Common Stock, by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend
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<PAGE> 21
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series C
Preferred Stock. In the event the Corporation shall at any time after August
26, 1987 (the "Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series
C Preferred Stock were entitled immediately prior to such event under clause
(b) 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) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share
on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
C Preferred Stock, 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 C Preferred Stock 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.
(D) Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such
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<PAGE> 22
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series C Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.
(E) Dividends in full shall not be declared or paid
or set apart for payment on the Series C Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full
have been declared or paid or set apart for payment on the Preferred Stock of
all series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective dividend
periods terminating on such dividend date. When the dividends are not paid in
full on all series of the Preferred Stock, the shares of all series shall share
ratably in the payment of dividends, including accumulations, if any, in
accordance with the sums which would be payable on such shares if all dividends
were declared and paid in full.
Section 4. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock unless, prior thereto, the holders of shares of Series
C Preferred Stock shall have received $10.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series C Liquidation Preference").
Following the payment of the full amount of the Series C Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series C Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series C Liquidation
Preference by (ii) 100 (as appropriately adjusted in accordance with
subparagraph C below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii) is hereinafter referred to as the "Adjustment Number"). Following the
payment of the full amount of the Series C Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series C Preferred
Stock and Common Stock, respectively, holders of Series C Preferred Stock and
holders of shares of Common Stock shall receive
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their ratable and proportionate share, on a per share basis of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Stock and Common Stock, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the Series C
Liquidation Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series C Preferred
Stock, then such remaining assets shall be distributed ratably to the holders
of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number 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.
Section 5. Conversion on Merger, Consolidation, etc.
In case the Corporation shall enter into any merger, consolidation, combination
or other transaction in which the shares of Common Stock are exchanged or
changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series C Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence
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<PAGE> 24
with respect to the exchange or change of shares of Series C Preferred Stock
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.
Section 6. Redemption. The outstanding shares of
Series C Preferred Stock shall not be redeemable.
Section 7. Voting Rights. Each holder of shares of
Series C Preferred Stock shall be entitled to one hundred votes for each share
held, and except as otherwise by law provided, the holders of Series C
Preferred Stock and the holders of Common Stock of the Corporation shall vote
together as one class.
Section 8. Condition to Issuance of any other
Series. The Restated Certificate of Incorporation of the Corporation shall not
be further amended to provide for the issuance of any other series of Preferred
Stock without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series C Preferred Stock, voting separately as one voting
group.
FIFTH. The existence of the Corporation shall be
perpetual.
SIXTH. The private property of the stockholders of
the Corporation shall not be subject to the payment of corporate debts to any
extent whatever.
SEVENTH. Provisions for the management of the
business and conduct of the affairs of the Corporation, and to define and
regulate the powers of the Corporation, the directors and the stockholders, are
as follows:
(a) The number of directors of the Corporation shall
be fixed from time to time, as may be provided in its bylaws, but shall never
be less than three. In the case of an increase in the number of directors at
any time, the additional directors may be elected by the directors then in
office, unless otherwise provided in the bylaws. The directors shall be
divided into three classes as nearly equal in number as possible. At the 1987
Annual Meeting, one class, consisting of four directors, shall be elected to
serve until the 1988 Annual Meeting of stockholders and their successors are
elected, a second class, consisting of four directors, shall be elected to
serve until the 1989 Annual Meeting of stockholders and
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their successors are elected, and a third class, consisting of three directors,
shall be elected to serve until the 1990 Annual Meeting of stockholders and
their successors are elected. Thereafter, at each annual meeting of
stockholders, successors to the class of directors whose term expires at the
annual meeting shall be elected for a three-year term. The number of directors
in each of these classes shall be fixed at the number stated in the preceding
sentence unless and until otherwise fixed or changed as may be provided in the
bylaws.
Notwithstanding the foregoing, whenever the holders
of any class or series of preferred stock issued by the Corporation has the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, classification, term of office,
filling of vacancies, and other features of such directorships shall be
governed by the terms of such preferred stock.
(b) The Board of Directors shall have power to make,
alter, and repeal bylaws of the Corporation; but bylaws made by the directors
may be altered or repealed by the stockholders.
(c) The Board of Directors may from time to time
determine whether and to what extent and at what times and places and under
what conditions and regulations the accounts and books of the Corporation shall
be open to the inspection of the stockholders, and no stockholder shall have
any right to inspect any document, book, or account of the Corporation, except
as conferred by law, unless authorized by resolution of the Board of Directors.
(d) The stockholders and directors shall have power,
if the bylaws so provide, to hold their meetings and to have one or more
offices within or without the State of Delaware and, subject to the provisions
of the laws of Delaware, to keep the books, documents, and papers of the
Corporation outside the State of Delaware at such places as may be from time to
time designated by the Board of Directors.
(e)(1) Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director,
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trustee, officer, employee, or agent of another corporation or of a
partnership, joint venture, trust, or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, trustee, officer,
employee, or agent or in any other capacity while serving as a director,
trustee, officer, employee, or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense,
liability, and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties, and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of his or
her heirs, executors, and administrators: provided, however, that, except as
provided in Subsection (2) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Subparagraph (e) shall be a contract right
and shall include the right to be paid by the Corporation the expenses incurred
in defending any such proceeding in advance of its final disposition:
provided, however, that, if the Delaware Corporation Law requires, the payment
of such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification
to employees and agents of the Corporation with the same scope and effect as
the foregoing indemnification of directors and officers.
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(e)(2) If a claim under Subsection (1) is not paid
in full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred
in defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the Corporation)
that the claimant has not met the standards of conduct which make it
permissible under the Delaware Corporation Law for the Corporation to indemnify
the claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the Delaware
Corporation Law, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
(e)(3) The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Subparagraph (e) shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise.
(e)(4) The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, or
employee of the Corporation, or is or was serving at the request of the
Corporation as a director, trustee, officer, or employee of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Subparagraph (e) or of the Delaware Corporation
Law.
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(f) A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit.
(g) Any action required or permitted to be taken by
the holders of the Common Stock of the Corporation may be taken only at a duly
called annual or special meeting of such holders and not by the consent in
writing of such holders, unless the consent in writing is signed by all such
holders. Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75% of the voting power of all the stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class,
shall be required to alter, amend, or repeal this Subparagraph (g) or to adopt
any provision inconsistent herewith.
(h) The Corporation may in its bylaws confer powers
upon its directors in addition to those conferred herein and in addition to the
powers and authorities expressly conferred upon them by statute.
(i) No stockholder of the Corporation shall have any
pre-emptive right to subscribe for any additional issues of stock of the
Corporation.
EIGHTH. At all elections of directors of the
Corporation, each stockholder shall be entitled to as many votes as shall equal
the number of votes which, except for this provision, he would be entitled to
cast for the election of directors with respect to his shares of stock
multiplied by the number of directors to be elected, and he may cast all such
votes for a single director or may distribute them among the number to be voted
for or for any two or more of them as he may see fit.
NINTH. The affirmative vote of the holders of shares
entitling them to exercise at least two-thirds of the voting power of the
Company shall be required:
(a) To approve (1) the merger of the Company into or
its consolidation with another corporation, or (2) the merger into the Company
of another corporation
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if, under the Delaware Corporation Law, the affirmative vote of holders of
shares of capital stock of the Company would be required to effect the merger,
or (3) the sale, lease, exchange, or other disposition by the Company of all,
or substantially all, of its property and assets to another corporation; or
(b) To approve any agreement, contract, or other
arrangement providing for any of the transactions described in subparagraph (a)
above.
No amendment to the Certificate of Incorporation of
the Company shall amend, alter, change, or repeal any of the provisions of this
Article NINTH, unless the amendment effecting such amendment, alteration,
change, or repeal shall receive the affirmative vote or consent of the holders
of shares entitling them to exercise at least two-thirds of the voting power of
the Company.
TENTH. (a) Voting Requirement for Certain Business
Combinations. Unless both the fair price requirement set forth in this
Subparagraph (a) and the other conditions set forth in Subparagraph (c) below
have been satisfied, the affirmative vote of the holders of 75% of all
outstanding stock of the Corporation entitled to vote in elections of
directors, voting together as a single class, shall be required for the
authorization or approval of any of the following transactions:
(a)(1) The merger or consolidation of the
Corporation or any of its subsidiaries with or into an interested stockholder
(as hereinafter defined).
(a)(2) The sale, lease, pledge, or other
disposition, in one transaction or in a series of transactions, from the
Corporation or any of its subsidiaries to an interested stockholder, or from an
interested stockholder to the Corporation or any of its subsidiaries, of assets
having an aggregate fair market value (as hereinafter defined) equal to or
exceeding 20% of the fair market value, as determined by the continuing
directors (as hereinafter defined), of the consolidated assets of the
Corporation and its subsidiaries.
(a)(3) The issuance, sale, or other transfer, in one
transaction or in a series of transactions, by the Corporation or any of its
subsidiaries to an interested stockholder, or by an interested stockholder to
the Corporation or any of its subsidiaries, of securities for cash or other
consideration having an aggregate fair market value equal to or exceeding 20%
of
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the fair market value, as determined by the continuing directors, of the
consolidated assets of the Corporation and its subsidiaries.
(a)(4) The liquidation or dissolution of the
Corporation proposed by an interested stockholder.
(a)(5) The reclassification of securities,
recapitalization of the Corporation, or other transaction that has the effect
of increasing the proportionate share of any class or series of outstanding
securities of the Corporation or any of its subsidiaries beneficially owned (as
hereinafter defined) by an interested stockholder or of otherwise diluting the
position of any stockholder of the Corporation in comparison with the position
of an interested stockholder.
(a)(6) Any other transaction or series of
transactions that is similar in purpose or effect to those referred to in
Subsections (1) through (5) of this Subparagraph (a).
This voting requirement shall apply even though no vote, or a lesser percentage
vote, may be required by law, by any other provision of this Certificate of
Incorporation, or otherwise. The term "business combination," as used in this
Article, means any of the transactions referred to in Subsections (1) through
(6) of this Subparagraph (a).
(b) Fair Price Requirement. The fair price
requirement will be satisfied if the consideration to be received in the
business combination by the holders of the Corporation's Common Stock or
Preferred Stock, and by the Corporation or any of its subsidiaries, as the case
may be, meets the following tests:
(b)(1) If any holder of the Corporation's Common
Stock or Preferred Stock, other than an interested stockholder, is to receive
consideration in the business combination for any of the stock, the aggregate
amount of cash and fair market value of any other consideration to be received
per share may not be less than the sum of:
(i) the greater of (A) the highest per share price,
including commissions, paid by the interested stockholder for any
stock of the same class or series during the two-year period ending on
the date of the most recent purchase by the interested stockholder of
any stock of the same class or series, (B) the highest per share sales
price reported for stock of the same class or
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series traded on a national securities exchange or in the
over-the-counter market during the one-year period preceding the first
public announcement of the proposed business transaction, or (C) in
the case of Preferred Stock, the amount of the per share liquidation
preference; plus
(ii) interest on the per share price calculated at
the prime rate for unsecured short-term loans in effect at AmeriTrust
Company, Cleveland, Ohio, on the date on which the interested
stockholder became an interested stockholder, compounded annually from
that date until the business combination is consummated, less the per
share amount of cash dividends payable to holders of record on record
dates from that date until the business combination is consummated, up
to the amount of such interest.
For purposes of this Subsection (1), per share amounts will be
adjusted for any stock dividend, stock split, or similar transaction.
(b)(2) The consideration to be received by holders
of the Corporation's Common Stock or Preferred Stock must be paid in cash or in
the same form as was previously paid by the interested stockholder for stock of
the same class or series; if the interested stockholder previously paid for
such stock with different forms of consideration, the consideration to be
received by the holders of the stock must be in cash or in the same form as was
previously paid by the interested stockholder for the greatest number of shares
of the stock previously acquired by it. The provisions of this Subsection (2)
are not intended to diminish the aggregate amount of cash and fair market value
of any other consideration that any holder of the Corporation's Common Stock or
Preferred Stock is otherwise entitled to receive upon the liquidation or
dissolution of the Corporation, under the terms of any contract with the
Corporation or an interested stockholder, or otherwise.
If the Corporation or any of its subsidiaries is to
receive consideration in the business combination, the consideration to be
received must be fair to the Corporation or its subsidiaries, as determined by
the continuing directors.
(c) Other Conditions. The other conditions will be
satisfied if, from the time the interested
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stockholder became an interested stockholder until the completion of the
business combination, each of the following has at all times been and continues
to be true:
(c)(1) The Corporation's Board of Directors has
included at least a majority of continuing directors. The term "continuing
director," as used in this Article TENTH, means an individual who (i) either
was a director of the Corporation at the time the interested stockholder became
an interested stockholder or whose nomination was subsequently approved by the
other continuing directors and (ii) is not an affiliate or associate (as
hereinafter defined) of the interested stockholder. All actions required or
permitted to be taken by the continuing directors under this Article TENTH
shall be taken by the unanimous written consent of all continuing directors or
by the vote of a majority of the continuing directors then in office at a
meeting convened upon such notice as would be required for a meeting of the
full Board of Directors.
(c)(2) The interested stockholder has not become the
beneficial owner (as hereinafter defined) of any additional shares of Common
Stock or Preferred Stock of the Corporation, except (i) as part of the
transaction that resulted in the interested stockholder becoming an interested
stockholder, (ii) upon conversion of securities previously acquired by it, or
(iii) pursuant to a stock dividend or stock split.
(c)(3) The interested stockholder has not received,
directly or indirectly, the benefit (except proportionately as a stockholder)
of any loan, advance, guaranty, pledge, or other financial assistance, tax
credit or deduction, or other benefit from the Corporation or any of its
subsidiaries.
(c)(4) A proxy or information statement describing
the business combination and complying with the requirements of the Securities
and Exchange Act of 1934, as amended, and the rules and regulations under it
(or any subsequent provisions replacing that Act and the rules and regulations
under it) has been mailed at least 30 days prior to the completion of the
business combination to the holders of all stock of the Corporation entitled to
vote in elections of directors, whether or not stockholder approval of the
business combination is required. If deemed advisable by the continuing
directors, the proxy or information statement shall contain a recommendation by
the continuing directors as to the advisability (or inadvisability) of the
business combination or an opinion by an investment banking firm, selected by
the continuing
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directors and retained at the expense of the Corporation, as to the fairness
(or unfairness) of the business combination to holders of the Corporation's
Common Stock or Preferred Stock other than the interested stockholder.
(c)(5) Except to the extent approved by the
continuing directors, there has been no (i) failure to pay in full, when and as
due, any dividends on the Corporation's Preferred Stock or (ii) failure to pay
or reduction in the annual rate of dividends on the Corporation's Common Stock,
whether directly or indirectly through a reclassification, recapitalization, or
otherwise.
(c)(6) Except to the extent approved by the
continuing directors, there has been no material change in (i) the nature of
the business conducted by the Corporation and its subsidiaries or (ii) the
capital structure of the Corporation, including but not limited to any change
in the number of outstanding shares of Common Stock, the number and series of
any outstanding Preferred Stock, and the types and aggregate principal amount
of any outstanding debt securities, except for changes resulting from the
exercise of previously issued options, warrants, or other rights, the
conversion of previously issued stock or other instruments, the issuance of
previously authorized debt securities, or the mandatory redemption or
retirement of debt securities in accordance with their terms.
(d) Definitions: As used in this Article TENTH:
(d)(1) "Affiliate" and "Associates." The terms
"affiliate" and "associate" have the meanings ascribed to them in Rule 12b-2 of
the General Rules and Regulations under the Securities and Exchange Act of
1934, as amended, as in effect on the date of the adoption of this Restated
Certificate of Incorporation.
(d)(2) "Beneficial Ownership." A person or entity is
deemed to "beneficially own" stock if, directly or indirectly through any
contract, understanding, arrangement, relationship, or otherwise, that person
or entity has or shares (i) the power to vote or to dispose of, or to direct
the voting or disposition of, the stock or (ii) the right to acquire the stock
pursuant to any contract or arrangement, upon the exercise of any option,
warrant, or right, upon the conversion of any stock or other instrument, upon
revocation of a trust, or otherwise. The person or entity is also deemed to
"beneficially own" stock that is beneficially owned by affiliates and
associates of that person or entity.
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(d)(3) "Business Combination." The term "business
combination" has the meaning ascribed to it in Subparagraph (a) of this Article
TENTH.
(d)(4) "Continuing Directors." The term "continuing
directors" has the meaning ascribed to it in Subsection (1) of Subparagraph (c)
of this Article TENTH.
(d)(5) "Fair Market Value." The term "fair market
value" means, (i) in the case of securities listed on a national securities
exchange or quoted in the National Association of Securities Dealers Automated
Quotation Systems (NASDAQ), the highest sales price reported for securities of
the same class or series traded on the national securities exchange or in the
over-the-counter market during the preceding 30-day period, or if no such
report or quotation is available, the value determined by the continuing
directors, and (ii) in the case of other securities and of consideration or
assets other than securities or cash, the value determined by the continuing
directors.
(d)(6) "Interested stockholder." The term
"interested stockholder" means any person or entity that, together with its
affiliates and associates, is at the time of, or has been within the two-year
period immediately prior to, the consummation of a business combination the
beneficial owner of stock having at least 25% of the aggregate voting power of
all outstanding stock of the Corporation entitled to vote in elections of
directors. The term "interested stockholder," for purposes of the requirements
and conditions of this Article TENTH, also includes the affiliates and
associates of the interested stockholder. Notwithstanding the foregoing, the
Corporation and its subsidiaries, and any profit-sharing, employee stock
ownership, employee pension, or other employee benefit plan of the Corporation
or any subsidiary, are not deemed to be "interested stockholders."
(e) Nothing contained in this Article TENTH shall be
construed to relieve any interested stockholder from any fiduciary obligations
imposed by law.
(f) Notwithstanding any other provision of this
Certificate of Incorporation or the bylaws of the Corporation (and
notwithstanding the fact that a lesser percentage may be required by law, this
Certificate of Incorporation, or the bylaws of the Corporation), the
affirmative vote of the holders of 75% of the outstanding stock of the
Corporation entitled to vote in elections of directors, voting together as a
single class, shall be
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required to amend or repeal, or adopt any provisions inconsistent with, this
Article TENTH.
ELEVENTH. (a) Foreign Ownership of Stock, etc.
(a)(1) Notwithstanding anything to the contrary in
this Restated Certificate of Incorporation, it is the policy of the Corporation
that, consistent with law, Foreigners shall not own or control more than the
Permitted Percentage of the shares of any class of stock of the Corporation at
any time outstanding, and, if Foreigners nevertheless at any time do own more
than the Permitted Percentage of such shares, shares owned by Foreigners may be
purchased by the Corporation, or the voting and the dividend and other
distribution rights of shares owned by Foreigners may be suspended, and the
issuance of stock certificates and the transfer of stock ownership on the books
of register of the Corporation to Foreigners may be denied, all to the extent
necessary to prevent the loss by the Corporation (or any Subsidiary or
Controlled Person) of, or to reinstate, its right to be a United States
Maritime Company or to have any license or franchise from a governmental agency
that is conditioned upon some or all of the holders of stock of the Corporation
possessing prescribed qualifications.
(a)(2) The Board of Directors is generally
authorized to adopt all such bylaws and resolutions and to take any and all
other lawful measures reasonably necessary, appropriate, or desirable to carry
out the policy set forth in Subparagraph (a)(1).
(a)(3) Without in any way limiting the general
powers and authority set forth in Subparagraph (a)(2), the Board of Directors
is specifically authorized to take any or all of the actions specified below
and, in that regard, is authorized to take all such action and make all such
determinations as it deems necessary, appropriate, or desirable and as are in
accordance with law and not inconsistent with this Article ELEVENTH, including
making changes in any of the definitions contained in Subparagraph (i) to
accord with changes in applicable law or the rules, regulations, and practices
of any relevant governmental agency.
(b) Restrictions on Transfer. Any transfer, or
attempted or purported transfer, of any shares of stock issued by the
Corporation that would result in the ownership by one or more Foreigners of an
aggregate percentage of the shares of any class of stock of the
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Corporation in excess of the Permitted Percentage shall, to the full extent
permitted by law and for so long as such excess exists, be ineffective as
against the Corporation, and the Corporation shall not recognize the purported
transferee as a stockholder of the Corporation for any purpose whatsoever
except for the purpose of making a further transfer to a person not a Foreigner
and for purposes of the purchase or redemption of such shares by the
Corporation, effecting any other remedy available to the Corporation, or
otherwise carrying out the provisions of this Article ELEVENTH.
(c) No Voting Rights; Temporarily Withholding
Payments of Dividends and Other Distributions. If at any time (including the
time of any record date) ownership by Foreigners of the outstanding stock of
any class of the Corporation is in excess of the Permitted Percentage, the
Corporation may, to the full extent permitted by law, determine which shares
owned by Foreigners are deemed to be included in such excess (to be selected in
a manner consistent with the provisions of Subsection (d)(3) below), and the
shares deemed to be included in such excess shall (so long as such excess
exists) not have any voting rights, and the Corporation may (so long as such
excess exists) temporarily withhold the payment of dividends and the sharing in
any other distribution (upon liquidation or otherwise) in respect of the shares
deemed to be included in such excess; provided, however, that any such dividend
or distribution shall be set aside for payment to the owners of such shares (or
their transferees) when, as, and if such excess no longer exists or such shares
are no longer owned by Foreigners.
(d) Redemption of Stock. Notwithstanding any other
provision of this Restated Certificate of Incorporation and without limiting
the power of the Board of Directors to purchase stock pursuant to Subparagraph
(f), outstanding stock of any class of the Corporation shall be subject to
redemption by the Corporation (by action of the Board of Directors, if in the
judgment of the Board such action should be taken) pursuant to Section 151(b)
of the Delaware General Corporation Law (or any other provision of law) to the
extent necessary to reduce the percentage of shares of such stock owned by
Foreigners to the Permitted Percentage. The terms and conditions of such
redemption shall be as follows:
(1) the redemption price shall be the Fair Market
Value of such stock;
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(2) the redemption price for shares owned by
Foreigners in excess of the Permitted Percentage at the time of the
merger of ON Corp. into Oglebay Norton Company shall be paid in cash,
and the redemption price for shares owned by Foreigners in excess of
the Permitted Percentage at any time subsequent to the merger may be
paid in cash or in Redemption Securities, as determined by the Board
of Directors;
(3) the shares owned by Foreigners to be redeemed
shall be selected in such manner as shall be prescribed by the Board
of Directors, including selection first of the shares most recently
purchased, selection by lot or on a pro rata basis, or selection in
any other manner that is consistent with the policy set forth in this
Article ELEVENTH;
(4) the number of shares to be redeemed shall not
exceed the number necessary to reduce the percentage of shares owned
by Foreigners to the Permitted Percentage;
(5) written notice of the date of redemption (the
"Redemption Date") shall be given to the record holders of the
selected shares (unless waived in writing by any such holder);
(6) the Redemption Date shall be the later of (i)
the date on which written notice is given to record holders and (ii)
the date on which the funds or Redemption Securities necessary to
effect the redemption have been deposited in trust for the benefit of
such record holders and are subject to immediate withdrawal by them
upon surrender of their stock certificates;
(7) from and after the Redemption Date, any and all
rights in respect of the shares selected for redemption shall cease
and terminate, and the owners of such shares shall thence-forth be
entitled only to receive the cash or Redemption Securities payable
upon redemption; and
(8) such other terms and conditions as the Board of
Directors may reasonably determine.
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(e) Dual Stock Certificate System and Other Actions.
The Board of Directors is authorized to adopt bylaw provisions and to take such
other action as it may deem necessary or desirable in order to carry out the
policy set forth in Subparagraph (a)(1), to impose restrictions on the transfer
or the registration of transfer of stock of any class of the Corporation, in
accordance with Section 202 of the Delaware General Corporation Law or any
other provision of law, and to determine whether outstanding stock of any class
of the Corporation is owned by Foreigners or by citizens of the United States.
Such restrictions may include a Dual Stock Certificate System.
(f) Purchase of Stock by the Corporation. Without
limiting the power of the Board of Directors to redeem stock owned by
Foreigners in accordance with Subparagraph (d) or generally to purchase
outstanding stock or other securities of the Corporation, the Board of
Directors is authorized, in carrying out the policy set forth in Subparagraph
(a)(1), to cause the Corporation to purchase stock of any class of the
Corporation that is owned by Foreigners. Any such purchase may be carried out
at such price and under such other terms as the Board of Directors deems
appropriate and fair to the Corporation under the circumstances.
(g) Ownership. Whether outstanding stock is owned
by Foreigners for the purposes of this Article ELEVENTH shall be determined
under such bylaws and resolutions, consistent with definitions of ownership
under any applicable law and the rules, regulations, and practices of any
governmental agency and not inconsistent with this Article ELEVENTH, as may be
adopted from time to time by the Board of Directors. The Corporation may, in
its discretion, rely on the stock records of the Corporation maintained in
accordance with a Dual Stock Certificate System and the certificates of
transferees or with holders to prove that shares are or are not owned by a
Foreigner. Whether shares are or are not owned by Foreigners may also be
subject to proof in such other way or ways as the Corporation may deem
reasonable. The Corporation at any time may require proof, in addition to the
certification, that shares are or are not owned or are or are not applied for
by a Foreigner, and the payment of dividends may be withheld, and any
application for transfer of ownership on the books of register of the
Corporation may be rejected, until such additional proof is submitted.
(h) Effectiveness. This Article ELEVENTH shall be
effective only so long as the Corporation or any
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Subsidiary or Controlled Person (a) is a United States Maritime Company or has
a license or franchise from a governmental agency that is conditioned upon one
or all of the holders of stock of the Corporation possessing prescribed
qualifications or (b) intends to reinstate itself as a United States Maritime
Company, or to reinstate any such license or franchise, within a reasonable
time after ceasing to be or hold the same.
(i) Definitions.
(i)(1) "Fair Market Value" of a share of stock of any
class of the Corporation on any particular date shall mean the average
(unweighted) closing price for such a share on the New York Stock Exchange for
each of the 45 trading days on which shares of stock of such class have been
traded preceding the day on which notice of a redemption is given pursuant to
Subparagraph (d)(5), except that if such class is not traded on the New York
Stock Exchange, then such closing price for each of the 45 trading days shall
be those listed on any other national security exchange on which such class is
listed, and if not listed on any national security exchange, the last sale
price for each of the 45 trading days as quoted in the NASDAQ National Market
System, and if not quoted in the NASDAQ National Market System, the mean
between the representative bid and asked prices on each of the 45 trading days
as quoted by NASDAQ or another generally recognized reporting system.
(i)(2) "Subsidiary" shall mean any corporation more
than 50% of the outstanding stock of which is owned by the Corporation or by
any Subsidiary of the Corporation.
(i)(3) "Foreigner" shall mean (a) any person
(including for purposes of this Subparagraph (i) an individual, a partnership,
a corporation, or an association) that is not a United States citizen or is the
representative of or fiduciary for any person that is not a United States
citizen; (b) any foreign government or the representative thereof; (c) any
corporation the president, chief executive officer, or chairman of the board of
directors of which is a Foreigner, or of which more than a minority of its
directors necessary to constitute a quorum are Foreigners; (d) any corporation
organized under the laws of any foreign government; (e) any corporation of
which a majority of its stock is owned beneficially or of record, or may be
voted by, Foreigners, or which by any other means whatsoever is controlled by
or in which control is permitted to be exercised by Foreigners; (f) any
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partnership or association which is controlled by Foreigners; (g) any
corporation of which a 25% or greater interest is owned beneficially or of
record by Foreigners and which may be deemed to "control" the Corporation (the
Board of Directors being authorized to determine reasonably the meaning of
"control" for this purpose); (h) any other person deemed by the Board of
Directors to be a Foreigner as to the United States or the Corporation (or any
Subsidiary) or otherwise not possessing prescribed qualifications to be a
holder of outstanding stock of the Corporation in accordance with the policy
set forth in Subparagraph (a)(1); or (i) any person who acts as representative
of or fiduciary for any person described in clauses (a) through (h) above.
(i)(4) "Permitted Percentage" shall mean the lesser
of the following percentages of the outstanding shares of stock of any class of
the Corporation: (i) so long as the Corporation (or any Subsidiary or
Controlled Person) operates vessels in the United States coastwise,
intercoastal, or noncontiguous domestic trade, 25%; and (ii) so long as the
Corporation (or any Subsidiary or Controlled Person) shall have a license or
franchise from a governmental agency to conduct its business which is
conditioned upon some of the holders of stock of the Corporation possessing
prescribed qualifications, the percentage prescribed by law to possess or
operate under such license or franchise; except that the Board of Directors may
reduce the lesser of the foregoing percentages by not more than 2-1/2% in the
event that the Board determines that a reasonable margin in the amount of such
reduction is desirable, in which case "Permitted Percentage" shall mean the
lesser of such percentages reduced by such margin.
(i)(5) "Redemption Securities" shall mean interest
bearing promissory notes of the Corporation with a maturity of not more than 10
years from the date of issue and bearing interest at a rate, and having other
terms, designed to ensure that the value of the promissory note at the date of
issue is equivalent to the redemption price.
(i)(6) "Dual Stock Certificate System" means a system
under which (i) one of two different forms of stock certificate, representing
outstanding shares of stock of any class of the Corporation, is issued to the
holders of record dependent on whether the shares are or are not owned by a
Foreigner; (ii) the forms of stock certificate for any class of the Corporation
are marked "Foreign" for shares owned by Foreigners or "Domestic" for shares
not owned by Foreigners but are identical in all
-40-
<PAGE> 41
other respects and comply with all provisions of the Delaware General
Corporation Law (including Section 202(a) thereof with respect to restrictions
on transfer or registration of transfer); (iii) when, as, and if the Permitted
Percentage is reached or exceeded for any class of stock and until the
percentage of the class owned by Foreigners has been reduced to or below the
Permitted Percentage, no additional "Foreign" stock certificates may be issued
for the class to any transferee of the holder of a "Domestic" share certificate
and the Corporation will not recognize any such transferee as an owner of stock
of the Corporation for any purpose whatsoever; (iv) a certification is required
from any transferee (and from any recipient upon original issuance) of stock of
the Corporation as to whether such transferee (or recipient), and if such
transferee (or recipient) is acting as nominee or in any other capacity for an
owner, such owner, is or is not a Foreigner and registration of transfer (or
original issuance) is denied upon refusal to furnish such certification; (v) to
the extent necessary to enable the Corporation to determine the percentage of
any class of outstanding stock of the Corporation that is owned by Foreigners
for the purpose of submitting any proof of citizenship required by law or by
contract with the United States government (or any agency thereof), the record
holders and the owners of such stock may be required from time to time to
confirm their citizenship status, and dividends payable to any such record
holder and owner may, in the discretion of the Board of Directors, be
temporarily withheld until confirmation of such citizenship status is received;
and (vi) the stock records of the Corporation are maintained in such manner as
to enable determination at any time, as to each class of outstanding stock of
the Corporation, of the percentage that is owned by Foreigners and the
percentage that is owned by United States citizens.
(i)(7) "Controlled Person" means any corporation or
partnership of which the Corporation or any Subsidiary owns or controls an
interest in excess of 25%.
(i)(8) "United States Maritime Company" means any
corporation or other entity which, directly or indirectly, (i) owns or operates
vessels in the United States coastwise trade, intercoastal trade, or non-
contiguous domestic trade, (ii) owns, charters, sub- charters, or leases any
vessel the costs of construction, renovation, or reconstruction of which have
been financed, in whole or in part, by obligations insured or guaranteed under
Title XI of the Merchant Marine Act of 1936, as amended, (iii) conducts any
activity, takes any action, or receives any benefit that would be adversely
affected under
-41-
<PAGE> 42
any provision of the United States maritime, shipping, or vessel documentation
laws because of the ownership by Foreigners of its stock, or (iv) maintains a
Capital Construction Fund under the provisions of Section 807 of the Merchant
Marine Act of 1936, as amended.
TWELFTH. The Corporation reserves the right to
amend, alter, change, or repeal any provision contained herein which
constitutes a part of the Certificate of Incorporation of the Corporation, in
the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders are granted subject to this reservation.
-42-
<PAGE> 1
Exhibit 3(b)
BY-LAWS
OF
OGLEBAY NORTON COMPANY
As of February 23, 1994
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
Number Subject Number
- -----------------------------------------------------------------
OFFICES
<S> <C>
1. Offices ............................................. 1
SEAL
2. Seal ................................................ 1
STOCKHOLDERS' MEETINGS
3. Place of meetings ................................... 1
4. Annual meeting ...................................... 1
5. Quorum .............................................. 2
6. Voting .............................................. 2
7. Notice of annual meeting ............................ 3
8. Stockholders' list .................................. 3
9. Special meetings .................................... 3
10. Business transacted at special meetings ............. 3
11. Notice of special meetings .......................... 3
DIRECTORS
12. Number; election; qualifications; term of office .... 3
13. Powers and authorities .............................. 4
VACANCIES
14. Vacancies ........................................... 4
MEETINGS OF THE BOARD
15. Regular meetings .................................... 4
16. Special meetings .................................... 4
17. Quorum .............................................. 5
ACTION WITHOUT A MEETING
18. Action by directors without a meeting ............... 5
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
Number Subject Number
- -----------------------------------------------------------------
COMMITTEES
<S> <C>
19. Executive Committee ................................. 5
20. Other committees .................................... 5
COMPENSATION OF DIRECTORS AND COMMITTEE MEMBERS
21. Compensation of directors ........................... 6
22. Compensation of committee members ................... 6
OFFICERS
23. Election and designation of officers; compensation;
term of office; vacancies ......................... 6
CHAIRMAN OF THE BOARD
24. Chairman of the Board ............................... 7
VICE CHAIRMAN OF THE BOARD
24a. Vice Chairman of the Board .......................... 7
PRESIDENT
25. President ........................................... 7
EXECUTIVE VICE PRESIDENTS
26. Executive Vice Presidents ........................... 7
SENIOR VICE PRESIDENTS
27. Senior Vice Presidents .............................. 7
VICE PRESIDENTS
28. Vice Presidents ..................................... 7
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
Number Subject Number
- -----------------------------------------------------------------
SECRETARY
<S> <C>
29. Secretary ........................................... 8
TREASURER
30. Treasurer ........................................... 8
OTHER OFFICERS
31. Other officers ...................................... 8
EXECUTION OF DOCUMENTS
32. Execution of documents .............................. 8
AUTHORITY TO VOTE SECURITIES
33. Authority to vote securities ........................ 8
DELEGATION OF AUTHORITY AND DUTIES
34. Delegation of authority and duties of officers ...... 9
STOCK CERTIFICATES
35. Stock certificates .................................. 9
TRANSFERS OF STOCK
36. Transfers of stock .................................. 9
LOST, STOLEN OR DESTROYED CERTIFICATES
37. Lost, stolen or destroyed certificates .............. 9
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Section Page
Number Subject Number
- -----------------------------------------------------------------
TRANSFER AGENT AND REGISTRAR
<S> <C<C>
38. Transfer agent and registrar ........................ 10
RECORD DATES
39. Record dates ........................................ 10
REGISTERED STOCKHOLDERS
40. Right of corporation to recognize only record
stockholders ...................................... 10
INSPECTION OF BOOKS
41. Inspection of books ................................. 10
FISCAL YEAR
42. Fiscal year ......................................... 11
DIVIDENDS
43. Dividends ........................................... 11
DIRECTORS' ANNUAL STATEMENT
44. Directors' annual statement ......................... 11
NOTICES
45. Notices ............................................. 11
AMENDMENTS
46. Amendments .......................................... 12
</TABLE>
<PAGE> 6
BY-LAWS
OF
OGLEBAY NORTON COMPANY
(Revised as of February 23, 1994)
OFFICES
1. The principal office shall be in the City of Wilmington, County of New
Castle, State of Delaware, and the name of the resident agent in charge
thereof is The Corporation Trust Company.
The corporation shall also have an office in the City of Cleveland, Ohio,
and it may also have such other offices at such other places, either
within or without the State of Delaware, as the Board of Directors may
from time to time designate or the business of the corporation may require.
The books of the corporation, other than the duplicate stock ledger, which
shall at all times be kept at the principal office of the corporation in
Delaware, shall be kept at such one or more of the offices of the
corporation or at such other place or places, either within or without
the State of Delaware, as the directors may from time to time determine.
SEAL
2. The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Delaware". Said seal may be
used by causing it, or a facsimile thereof, to be impressed or affixed or
reproduced or otherwise.
STOCKHOLDERS' MEETINGS
3. The annual meeting of the stockholders shall be held in the office of the
corporation in the City of Cleveland, Ohio. All other meetings of the
stockholders may be held at such place within or without the State of
Delaware as shall be designated in the call for such meeting.
4. The annual meeting of the stockholders shall be held on the last Wednesday
in April in each year at such time and place as shall be designated in the
call for such meeting and at such meeting the stockholders shall elect, by
ballot, a Board of Directors and transact such other business as may
properly be brought before the meeting.
<PAGE> 7
5. The holders of a majority of the capital stock of the corporation present
in person or represented by proxy shall constitute a quorum at all
meetings of the stockholders for the transaction of business, except as
otherwise provided by law, by the Certificate of Incorporation, or by
these By-Laws; provided, however, that no action required by law, by the
Certificate of Incorporation, or by these By-Laws to be authorized or
taken by a designated proportion of the capital stock of the corporation
may be authorized or taken by a lesser proportion; and provided, further,
that, if a quorum shall not be present or represented at any meeting of
the stockholders, the holders of a majority of the voting shares present
or represented thereat shall have power to adjourn the meeting, from time
to time, without notice other than announcement at the meeting, until the
requisite amount of voting stock shall be present or represented. At such
adjourned meeting, at which the requisite amount of voting stock shall be
present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified.
6. At each meeting of the stockholders, every stockholder having the right to
vote shall be entitled to vote in person or by proxy appointed by an
instrument in writing subscribed by such stockholder, and bearing a date
not more than three years prior to said meeting, unless said instrument
provides for a longer period. On all matters, except the election of
directors, each stockholder shall have one vote for each share of stock
having voting power registered in his name on the books of the
corporation. At all elections of directors, each stockholder shall be
entitled to as many votes as shall equal the number of his shares of stock
multiplied by the number of directors to be elected, and he may cast all
of such votes for a single director or may distribute them among the
number to be voted for, or any two or more of them, as he may see fit. In
the event that no record date shall be fixed for the determination of
stockholders entitled to vote at any election of directors, in accordance
with the provisions of Section 39 of these By-Laws, no share of stock
shall be voted at such election which shall have been transferred on the
books of the corporation within twenty (20) days next preceding such
election. The vote for directors and, on the demand of any stockholder,
the vote upon any question before the meeting shall be by ballot. All
elections shall be had and all questions decided by a plurality vote,
except as otherwise required by law or by these By-Laws.
<PAGE> 8
7. Written notice of the annual meeting, stating the time, place and object
thereof, shall be mailed to each stockholder entitled to vote thereat at
such address as appears on the stock book of the corporation at least ten
(10) days prior to the meeting.
8. A complete list of the stockholders entitled to vote at the ensuing
election of directors, arranged in alphabetical order and showing the
address of each and the number of shares registered in the name of each,
shall be prepared by the Secretary and open to the examination of any
stockholder during ordinary business hours for a period of at least ten
(10) days before every such election, either at a place within the city,
town, or village where the election is to be held and which place shall be
specified in the notice of the meeting, or , if not so specified, at the
place where said meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole time thereof, and
subject to the inspection of any stockholder who may be present.
9. Special meetings of the stockholders for any purpose or purposes, unless
otherwise prescribed by law, may be called by the Chairman of the Board or
by the President, and shall be called by the President or Secretary at the
request, in writing, of a majority of the Board of Directors, or at the
request, in writing, of stockholders owning not less than one-third in
amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.
10. Business transacted at all special meetings shall be confined to the
objects stated in the call.
11. Written notice of any special meeting of the stockholders stating the
time, place and object thereof, shall be mailed, postage prepaid, at least
ten (10) days before such meeting, to each stockholder entitled to vote
thereat, at such address as appears on the books of the corporation.
DIRECTORS
12. The property and business of this corporation shall be managed by its
Board of Directors, consisting of such number of members, not less,
however, than three, as the stockholders may determine at any annual or
special meeting called for the purpose of electing directors at which a
quorum is present, by the affirmative vote of a majority of the capital
stock which is represented at the meeting and entitled to vote on such
<PAGE> 9
proposal. Unless so determined by the stockholders, the number shall be
eleven, of which four shall be directors of the class whose term expires in
1995 and every three years thereafter, three shall be directors of the
class whose term expires in 1996 and every three years thereafter, and
four shall be directors of the class whose term expires in 1997 and every
three years thereafter. Whenever the stockholders shall have so determined
the number, such number shall be deemed the authorized number of directors
until the same shall be changed by vote of the stockholders as aforesaid
or by amendment of these By-Laws. Directors need not be stockholders.
They shall be elected at the annual meeting of the stockholders, and each
director shall be elected to serve until his successor shall be elected
and shall qualify.
13. In addition to the powers and authorities by these By-Laws expressly
conferred upon them, the directors may exercise all such powers of the
corporation and do all such lawful acts and things as are not by law, by
the Certificate of Incorporation, or by these By-Laws directed or required
to be exercised or done by the stockholders.
VACANCIES
14. If the office of any director or directors becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office or
otherwise, the remaining directors, though less than a quorum, shall
choose a successor or successors who shall hold office until the next
annual meeting of stockholders at which the class or classes of directors
in which the vacancy or vacancies occur shall be elected and until a
successor or successors shall have been duly elected and qualified, unless
sooner displaced.
MEETINGS OF THE BOARD
15. Regular meetings of the Board shall be held on the last Wednesday of
February, April, June, August, October and December at such hour and place
and upon such notice, if any, as the Board shall determine. In the event
the last Wednesday is a holiday or for any reason is deemed by the Board
to be inappropriate, then the meeting shall be held on such alternate date
as may be determined by the Board.
16. Special meetings of the Board may be called by the Chairman of the Board
or by the President on one (1) day's notice to each director, either
personally or by mail, telegram, or cablegram. Special meetings shall be
called by the President or Secretary in like manner and on like notice on
the written request of two (2) directors.
<PAGE> 10
17. At all meetings of the Board, a majority of the directors shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by law, by the
Certificate of Incorporation, or by these By-Laws.
ACTION WITHOUT A MEETING
18. Any action required or permitted to be taken at any meeting of the Board
of Directors or any committee thereof may be taken without a meeting if,
prior to such action, a written consent thereto is signed by all members
of the Board or of such committee, as the case may be, and such written
consent is filed with the minutes of proceedings of the Board or
committee.
COMMITTEES
19. The Board of Directors shall by resolution appoint an Executive Committee
consisting of not less than five or more than eight directors of the
corporation, as the Board shall determine, together with such alternates
as the Board may deem advisable. The Executive Committee shall meet on
the last Wednesday of each calendar month in which the Board of Directors
does not meet at such place or places as they may from time to time
determine, and shall have and may exercise all of the powers of the Board
of Directors when the Board is not in session. Unless otherwise ordered
by the Board of Directors, the Executive Committee may prescribe its own
rules for calling and holding meetings and for its own procedures and may
act at a meeting by a majority of its members or without a meeting by
written consent of all of its members. The Executive Committee shall
cause the Secretary to keep full and complete records of all meetings and
actions, which shall be open to inspection by any director. Each member
of the Executive Committee and each alternate shall hold office during the
pleasure of the Board of Directors.
20. The Board of Directors may by resolution appoint one or more additional
committees, each committee to consist of two or more directors of the
corporation and to have such authority and to perform such duties as may
from time to time be determined by the Board of Directors.
<PAGE> 11
COMPENSATION OF DIRECTORS AND COMMITTEE MEMBERS
21. Each member of the Board of this Company, with the exception of salaried
officers or employees of the Company or its subsidiaries, shall be paid a
quarterly retainer of $3,000 for each quarter in which such director
serves, payable in May, August, November and February covering the
previous quarter. In addition, each member of the Board of Directors and
each "honorary" member of the Board of Directors, with the exception of
salaried officers or employees of the Company or its subsidiaries, shall
receive for his attendance at the Company's Annual Meeting of Stockholders
and each meeting of the Board of Directors a fee of $650, plus travel
expenses incurred by him in attending any meeting or in pursuance of any
activity on behalf of the Company or its subsidiaries.
22. Each member of the Executive Committee, the Compensation and Organization
Committee, the Audit Committee and such other committee as may from time
to time be appointed by the Board of Directors, with the exception of
salaried officers or employees of the Company or its subsidiaries, shall
receive for his attendance at each such committee meeting a fee of $650,
plus travel expenses incurred by him in attending any meeting or in
pursuance of any activity on behalf of the Company or its subsidiaries.
OFFICERS
23. The Board of Directors shall elect a Chairman of the Board, a President,
one or more Vice Presidents, any one or more of whom may be designated
Executive Vice Presidents and any one or more of whom may be designated
Senior Vice Presidents, a Treasurer and a Secretary. The Board of
Directors may elect such other officers as in its discretion it deems
necessary. The Chairman of the Board, the Vice Chairman of the Board, and
the President shall be directors, but no other one of the officers need be
a director. Any two, but not more than two, of such offices may be held
by the same person. The compensation of all of the officers of the
corporation shall be fixed by the Board of Directors. Officers elected by
the Board of Directors shall hold office until their successors are chosen
and qualified in their stead. Any officer elected by the Board of
Directors shall hold office during the pleasure of the Board. If the
office of any officer or officers becomes vacant, the vacancy may be
filled by the Board of Directors.
<PAGE> 12
CHAIRMAN OF THE BOARD
24. The Chairman of the Board shall preside at all meetings of the Board of
Directors and shall have such other authority and perform such other
duties as may be determined by the Board of Directors.
VICE CHAIRMAN OF THE BOARD
24a. The Vice Chairman of the Board shall have such authority as may be
determined by the Board of Directors and perform such duties as may be
assigned to him by the Chairman of the Board.
PRESIDENT
25. The President shall preside at all meetings of the stockholders. Subject
to directions of the Board of Directors, he shall have general executive
authority and responsibility with respect to the business and affairs of
the corporation, and shall have such other authority and perform such
other duties as may be determined by the Board of Directors.
EXECUTIVE VICE PRESIDENTS
26. The Executive Vice Presidents shall exercise all of the authority and
perform all of the duties of the President in case of the absence or
disability of the latter or when circumstances prevent the latter from
acting, and shall have such other authority and perform such other duties
as may be determined by the Board of Directors.
SENIOR VICE PRESIDENTS
27. The Senior Vice Presidents shall exercise all of the authority and perform
all of the duties of the President in case of the absence or disability of
both the President and the Executive Vice Presidents or when circumstances
prevent both the President and the Executive Vice Presidents from acting,
and shall have such other authority and perform such other duties as may
be determined by the Board of Directors.
VICE PRESIDENTS
28. The Vice Presidents severally shall have such authority and perform such
duties as may be determined by the Board of Directors or by the President.
<PAGE> 13
SECRETARY
29. The Secretary shall record all of the proceedings of the meetings of the
stockholders, the Board of Directors, and the Executive Committee. He
shall keep such other books as may be required by the Board of Directors,
shall give notices of meetings of the stockholders, the Board, and the
Executive Committee required by law, by these By-Laws, or otherwise, shall
attest, on behalf of the corporation, all documents requiring the
attestation of the Secretary, and shall have such authority and perform
such other duties as may be determined by the Board of Directors.
TREASURER
30. The Treasurer shall receive and have in charge all money, bills, notes,
bonds, stocks in other corporations, and similar property belonging to the
corporation, and shall hold and dispose of the same as may be ordered by
the Board of Directors. He shall keep accurate financial accounts and
hold the same open for the inspection and examination of the directors and
shall have such authority and perform such other duties as may be
determined by the Board of Directors.
OTHER OFFICERS
31. The Assistant Secretaries and the Assistant Treasurers, if any, and any
other officers whom the Board of Directors may elect shall, respectively,
have such authority and perform such duties as may be determined by the
Board of Directors.
EXECUTION OF DOCUMENTS
32. Except as otherwise provided in these By-Laws, or by resolutions of the
Board, all documents evidencing conveyances by or contracts or other
obligations of the corporation shall be signed by the President, the
Executive Vice President, a Senior Vice President, or a Vice President,
and attested by the Secretary or an Assistant Secretary.
AUTHORITY TO VOTE SECURITIES
33. The Chairman of the Board, the President, the Executive Vice President,
and the Senior Vice Presidents are each authorized to vote, appoint
proxies, and execute consents, waivers, and releases with respect to
securities of other corporations owned by the corporation.
<PAGE> 14
DELEGATION OF AUTHORITY AND DUTIES
34. The Board of Directors is authorized to delegate the authority and duties
of any officer to any other officer and generally to control the action of
the officers and to require the performance of duties in addition to those
mentioned in these By-Laws.
STOCK CERTIFICATES
35. Every holder of stock in the corporation shall be entitled to one or more
certificates, signed by the Chairman of the Board, the President, the
Executive Vice President, or a Senior Vice President and by the Secretary,
the Treasurer, an Assistant Secretary, or an Assistant Treasurer,
certifying the number of shares owned by him in the corporation. When
such a certificate is countersigned by an incorporated transfer agent or
registrar, the signature of any of said officers of the corporation may be
facsimile, engraved, stamped, or printed. Although any officer of the
corporation whose manual or facsimile signature is affixed to such a
certificate ceases to be such officer before the certificate is delivered,
such certificate nevertheless shall be effective in all respects when
delivered.
TRANSFERS OF STOCK
36. Stock of the corporation shall be transferable upon the books of the
corporation by the holders thereof, in person, or by a duly authorized
attorney, and new certificates shall be issued upon surrender and
cancellation of certificates for a like number of shares, with duly
executed assignment or power of transfer endorsed thereon or attached
thereto, and with such proof of the authenticity of the signatures to such
assignment or power of transfer as the corporation or its agents may
reasonably require.
LOST, STOLEN OR DESTROYED CERTIFICATES
37. The corporation may issue a new stock certificate in the place of any
certificate alleged to have been lost, stolen or destroyed. The Board of
Directors may require the owner, or his legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any
claim that may be made against it on account of the issuance of such new
certificate. A new certificate may be issued without requiring any bond
when, in the judgment of the directors, it is proper to do so.
<PAGE> 15
TRANSFER AGENT AND REGISTRAR
38. The Board of Directors may, from time to time, appoint, or revoke the
appointment of, transfer agents and registrars and may require all stock
certificates to bear the signatures of such transfer agents and registrars
or any of them.
RECORD DATES
39. The Board of Directors may fix in advance a date, not exceeding fifty (50)
days preceding the date of any meeting of stockholders, or the date for
the payment of any dividend, or the date for the allotment of rights, or
the date when any change or conversion or exchange of capital stock shall
go into effect, or a date in connection with obtaining the consent of
stockholders for any purpose, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such meeting
and any adjournment thereof, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to
give such consent, and in such case only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to such
notice of and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation
after any such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
40. The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof, and, accordingly,
shall 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 it
shall have express or other notice thereof, save as expressly provided by
the laws of Delaware.
INSPECTION OF BOOKS
41. The directors shall determine, from time to time, whether and if allowed,
when and under what conditions and regulations, the accounts and books of
the corporation (except such as may by statute be specifically open to
inspection), or any of them, shall be open to the inspection of the
stockholders, and the stockholders' rights in this respect are and shall
be restricted and limited accordingly.
<PAGE> 16
FISCAL YEAR
42. The fiscal year shall begin on the first day of January in each year.
DIVIDENDS
43. Dividends upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital
stock.
Before payment of any dividend, there may be set aside, out of any funds of
the corporation available for dividends, such sum or sums as the directors,
from time to time, in their absolute discretion, think proper, as a reserve
fund to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the corporation, or for such other purpose
as the directors shall think conducive to the interest of the corporation;
and the directors may abolish any such reserve in the manner in which it
was created.
DIRECTORS' ANNUAL STATEMENT
44. The Board of Directors shall present at each annual meeting, and when
called for by vote of the stockholders, at any special meeting of the
stockholders, a full and clear statement of the business and condition of
the corporation.
NOTICES
45. Whenever, under the provisions of these By-Laws, notice is required to be
given to any director, officer or stockholder, it shall not be construed
to mean personal notice, but such notice may be given in writing, by mail,
by depositing the same in the post office or letter box in a postpaid,
sealed wrapper, addressed to such stockholder, officer or director at such
address as appears on the books of the corporation; and such notice shall
be deemed to be given at the time when the same shall be thus mailed.
Any stockholder, director or officer may waive any notice required to be
given by law, by the Certificate of Incorporation, or by these By-Laws and
shall be deemed to have waived notice of any meeting which he shall attend
without protesting, prior to or at the commencement of such meeting, the
lack, of proper notice thereof.
<PAGE> 17
AMENDMENTS
46. The By-Laws of the corporation may be amended, or new By-Laws may be
adopted, by the Board of Directors by the affirmative vote of a majority
of the directors present at any meeting of the Board at which there is a
quorum present and acting; or they may be amended, or new By-Laws may be
adopted, by the stockholders, at any regular or special meeting thereof,
by the affirmative vote of a majority of the stock issued and outstanding
and entitled to vote thereat, if notice of the proposed amendment be
contained in the notice of the meeting, or without a meeting by the
written consent of a majority of the stock issued and outstanding. No
amendment of these By-Laws with respect to the time or place for the
election of directors shall be made within sixty (60) days next before the
day on which such election is to be held. In case of any amendment of
these By-Laws with respect to such time or place, notice thereof shall be
given to each stockholder, in the manner provided in Section 45 of these
By-Laws, at least twenty (20) days before the first election following
such amendment is held.
<PAGE> 1
Exhibit 4(b)
________________________________________________________________________________
OGLEBAY NORTON COMPANY
and
AMERITRUST COMPANY NATIONAL ASSOCIATION, Rights Agent
AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of
February 22, 1989
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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RIGHTS AGREEMENT
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 8
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . 9
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . 14
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . 15
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . 17
Section 8. Cancellation and Destruction of
Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9. Reservation and Availability of
Shares of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . 26
Section 11. Adjustment of Purchase Price, Exercise
Price, Number and Type of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12. Certificate of Adjusted Purchase
Price, Exercise Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
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<TABLE>
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<S> <C>
Section 17. Right Certificate Holder Not
Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . 57
Section 19. Merger or Consolidation or Change
of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 58
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . 66
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . 71
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 28. Determinations and Actions by the
Board of Directors, etc . . . . . . . . . . . . . . . . . . . . . . . 73
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . 74
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Exhibit A - Certificate of Designation,
Preferences and Rights of
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . . B-1
- Form of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . B-6
- Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
</TABLE>
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<PAGE> 4
<TABLE>
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<S> <C> <C>
- Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
- Form of Election to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . B-8
- Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9
- Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9
Exhibit C - Summary of Amended Rights to Purchase
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
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<PAGE> 5
AMENDED AND RESTATED
RIGHTS AGREEMENT
This Agreement, dated as of February 22, 1989, is
between Oglebay Norton Company, a Delaware corporation (the "Company"), and
AmeriTrust Company National Association, a national banking association (the
"Rights Agent"). This Agreement amends and restates the Rights Agreement,
dated as of August 26, 1987, between the Company and the Rights Agent.
The Board of Directors of the Company on August 26,
1987 authorized and declared a dividend consisting of one right ("Right") for
each share of the Common Stock with a par value of $1 per share of the Company
outstanding on September 7, 1987 (the "Record Date") and authorized the
issuance of one Right in respect of each share of Common Stock of the Company
issued between the Record Date and the earlier of the Distribution Date, the
Expiration Date or the Final Expiration Date (as such terms are hereinafter
defined), including but not limited to shares of Common Stock which are
treasury shares as of the Record Date and subsequently become outstanding.
Each Right initially represents the right to purchase one one-hundredth of a
share of Series C $10.00 Preferred Stock of the Company having the rights,
powers and preferences set forth in the Certificate of Designation, Preferences
and Rights of Preferred Stock attached hereto as Exhibit A.
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<PAGE> 6
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (as
such term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person, is the
Beneficial Owner (as such term is hereinafter defined) of securities of the
Company constituting a Substantial Block (as such term is hereinafter defined)
or (ii) any Adverse Person (as such term is hereinafter defined), but shall not
include the Company, any subsidiary of the Company, any employee benefit plan
or employee stock ownership plan of the Company or of any subsidiary of the
Company or any person organized, appointed or established by the Company or any
subsidiary of the Company for or pursuant to the terms of any such plan.
(b) "Adverse Person" shall mean any Person declared
to be an Adverse Person by the Board of Directors of the Company upon (i) a
determination by the Board of Directors, at any time after the date of this
Agreement, that such Person, alone or together with its Affiliates and
Associates, has become, or has announced an intention to
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<PAGE> 7
become, in one or more transactions, the Beneficial Owner of an amount of
Common Stock that the Board of Directors determines to be substantial (which
amount shall in no event be less than 15% of the shares of Common Stock then
outstanding) and (ii) a determination by at least a majority of the Board of
Directors who are not officers of the Company, after reasonable inquiry and
investigation, that (A) such Beneficial Ownership by such Person (1) is
intended to cause the Company to repurchase the Common Stock beneficially owned
by such Person, (2) is intended or may reasonably be anticipated to cause
pressure on the Company to take action or enter into a transaction or series of
transactions that would provide such Person with short-term financial gain
under circumstances in which the Board of Directors determines that the best
long-term interests of the Company and its stockholders would not be served by
taking such action or entering into such transactions or series of transactions
at that time or (3) is intended or may reasonably be anticipated to permit such
Person to acquire control of or a controlling influence over the Company, as a
result of such Beneficial Ownership or one or more subsequent actions or
transactions, in a manner or pursuant to one or more actions or transactions
that the Board determines to be unfair or coercive to stockholders or (B) such
Beneficial Ownership by such Person is causing or may reasonably be
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<PAGE> 8
anticipated to cause a material adverse impact (including, without limitation,
the impairment of relationships between the Company and its customers,
suppliers, creditors or employees or the impairment of the Company's ability to
maintain its competitive position) on the business, financial condition or
prospects of the Company.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as in effect on the date hereof.
(d) A Person shall be deemed to be the "Beneficial
Owner" of and shall be deemed to "beneficially own" any securities:
(i) which such Person, or any of such Person's
Affiliates or Associates, beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided,
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<PAGE> 9
however, that a Person shall not be deemed to be the "Beneficial Owner"
of or to "beneficially own" (1) securities tendered pursuant to a
tender offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase,
or (2) securities issuable upon exercise of these Rights;
(iii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed to be the Beneficial Owner of or to
"beneficially own" any security under this subparagraph (iii) if the
agreement, arrangement or understanding to vote such security (A)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and (B)
is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
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<PAGE> 10
(iv) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in subparagraph (iii) of this paragraph (c)) or disposing of
any securities of the Company.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in State of Ohio are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean
5:00 P.M., Cleveland time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Cleveland time, on the next
succeeding Business Day.
(g) "Common Stock", when used with reference to the
Company, shall mean the Common Stock with a par value of $1 per share of the
Company. "Common Stock", when used with reference to any Person other than the
Company, shall mean the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management
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<PAGE> 11
of such person, or, if such Person is a subsidiary of another corporation or
entity, the capital stock with the greatest voting power, or the equity
securities or other equity interests having power to control or direct the
management, of the corporation or other entity that ultimately controls such
Person.
(h) "Continuing Director" shall mean any individual
who is a member of the Board of Directors of the Company, while such individual
is a member of the Board, who is not an Acquiring Person, an Affiliate or
Associate of an Acquiring Person or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate and was a member of the Board
prior to the Shares Acquisition Date, and any successor of a Continuing
Director, while such successor is a member of the Board, who is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and was recommended or elected to succeed the Continuing Director by
a majority of the Continuing Directors.
(i) "Exercise Price" shall mean the exercise price
per share set forth in Section 11(a)(ii).
(j) "Person" shall mean any individual, firm,
corporation or other entity.
(k) "Preferred Stock" shall mean shares of Series C
$10.00 Preferred Stock of the Company.
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<PAGE> 12
(l) "Purchase Price" shall mean the purchase price
per share set forth in Section 7(b).
(m) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring Person (by press
release, filing made with the Securities and Exchange Commission or otherwise)
that an Acquiring Person has become such.
(n) "Subsidiary" shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or other equity interests is owned, directly or indirectly, by the Company.
(o) "Substantial Block" shall mean a number of
shares of the Common Stock which equals or exceeds 20% of the number of shares
of the Common Stock then outstanding.
(p) "Triggering Event" shall mean any event
described in Section 11(a) (ii) or in Section 13(a).
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be taken by any such
Co-Rights Agent.
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<PAGE> 13
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the tenth calendar day after the Shares Acquisition Date or
(ii) the tenth calendar day after the date of the commencement of, or first
public announcement of the intent to commence, by any Person (other than the
Company, any subsidiary of the Company, any employee benefit plan or employee
stock ownership plan of the Company or of any subsidiary of the Company or any
Person organized, appointed or established by the Company or any subsidiary of
the Company for or pursuant to the terms of any such plan), a tender or
exchange offer if, upon consummation thereof, such Person would be an Acquiring
Person (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of the dates in subparagraphs
(i) and (ii) of this Section 3(a) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of Section
3(b)) by the certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for the Common Stock shall also
be deemed to be Right Certificates) and not by separate Right Certificates, and
(y) the right to receive Right Certificates will be transferable only in
connection with the transfer of the Common Stock. As soon as practicable after
the Distribution Date, the Rights Agent will send, by first-
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<PAGE> 14
class, insured, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto, evidencing one Right for each share
of the Common Stock held of record as of the close of business on the
Distribution Date. As of the close of business on the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the execution
of this Agreement, the Company will send a copy of a Summary of Amended Rights
to Purchase Preferred Stock, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of the Common Stock, at the address of such holder shown on
the records of the Company. Until the Distribution Date (or the earlier
redemption or expiration of the Rights), the Rights will be evidenced by such
certificates for the Common Stock registered in the names of the holders of the
Common Stock with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier redemption or expiration of the Rights), the
surrender for transfer of any of the certificates for the Common Stock, even
without a copy of the Summary of Rights attached thereto, shall also constitute
the surrender for transfer of the Rights
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<PAGE> 15
associated with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares
of Common Stock issued (including but not limited to shares of Common Stock
which are treasury shares as of the Record Date and subsequently become
outstanding) or surrendered for transfer or exchange after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date or the
Final Expiration Date (as such terms are defined in Section 7). Certificates
representing such shares of Common Stock shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights
Agreement between Oglebay Norton Company and AmeriTrust Company
National Association, Rights Agent, dated as of February 22, 1989 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of Oglebay Norton Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Oglebay Norton Company will mail to the holder of this
certificate a copy of the Rights Agreement (as in effect on the date
of mailing) without charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights which are or were
beneficially owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement) and any
subsequent holder of such Rights may become null and void.
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<PAGE> 16
Until the Distribution Date, the Rights associated with the Common Stock
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented by such certificate.
Section 4. Form of Right Certificates. (a) The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law, with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed or of
any association on which the Rights may from time to time be authorized for
quotation, or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates, whenever issued, shall be dated as of the
Record Date and, on their face, shall entitle the holders thereof to purchase
such number of shares of the Preferred Stock (or, following a Triggering Event,
Common Stock,
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<PAGE> 17
other securities, cash or other assets, as the case may be) as shall be set
forth therein at the Purchase Price (or, upon the occurrence of a Triggering
Event, at the Exercise Price), but the number of such shares, the Purchase
Price and the Exercise Price shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this
Agreement, any Right Certificate issued pursuant to Section 3 or Section 22
hereof that represents Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of such Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became an Acquiring Person or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming an Acquiring Person and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to any
Person who holds an equity interest in such Acquiring Person or with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has a primary purpose or effect the avoidance of Section 7(e)
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<PAGE> 18
hereof, any Right Certificate issued at any time to any nominee of an Acquiring
Person or any Associate or Affiliate of such Acquiring Person, and any Right
Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company by its Chairman
of the Board, President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such
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<PAGE> 19
Right Certificates may nevertheless be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at one of its offices in Cleveland, Ohio, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the earlier of the Expiration
Date or the Final Expiration Date, any Right Certificate or Certificates may
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<PAGE> 20
be transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a share of Preferred Stock (or, following a
Triggering Event, a like number or amount of shares of Common Stock or other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder (or former holder
in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner or former Beneficial Owner, or
Affiliates or Associates thereof, as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14
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<PAGE> 21
hereof, countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of the loss, theft or
destruction of a Right Certificate, of indemnity or security reasonably
satisfactory to them and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and, in case of the mutilation of a
Right Certificate, upon surrender to the Rights Agent and cancellation of the
mutilated Right Certificate, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part
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<PAGE> 22
at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its office in Cleveland, Ohio together
with payment of the aggregate Purchase Price with respect to the total number
of one one-hundredths of a share of Preferred Stock (or the aggregate Exercise
Price with respect to the total number of shares of Common Stock or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the close of business on
the earlier of (i) September 7, 1997 (the "Final Expiration Date"), or (ii) the
date on which the Rights are redeemed as provided in Section 23 (such earlier
date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of
a share of Preferred Stock pursuant to the exercise of a Right shall initially
be $65.00, shall be subject to adjustment from time to time as provided in
Section 11 hereof and shall be payable in lawful money of the United States of
America in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Preferred
Stock
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(or the Exercise Price for the Common Stock or other securities, cash or
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft payable to
the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, promptly (i) requisition from any transfer agent of the Preferred Stock
of the Company certificates for the total number of one one-hundredths of a
share of Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company will direct the depositary agent to comply
with all such requests, (iii) when appropriate, requisition from any transfer
agent of the Common Stock of the Company certificates for the total number of
shares of Common Stock to be purchased in accordance with Section 11(a)(ii) and
11(a)(iii), (iv) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance
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of fractional shares in accordance with Section 14, (v) promptly after receipt
of such certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (vi)
when appropriate, after receipt promptly deliver such cash to or upon the order
of the registered holder of such Right Certificate. In the event that the
Company is obligated to issue securities, pay cash or distribute assets
pursuant to Section 11(a)(iii) hereof, the Company will make all arrangements
necessary so that such securities, cash and assets are available for issuance,
payment or distribution by the Rights Agent, as and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, any Rights that are or were at any time on or after the earlier
of the Distribution Date or the Shares Acquisition Date beneficially owned by
(i) an Acquiring Person or any Associate or Affiliate of an
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Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
any Person who holds an equity interest in such Acquiring Person or with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has, as a primary purpose or effect, the avoidance of this Section 7(e),
shall become null and void upon the occurrence of a Triggering Event and no
holder of such Rights shall have any right with respect to such Rights under
any provision of this Agreement from and after the occurrence of the Triggering
Event. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
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(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall cancel and retire, any Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled
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Right Certificates to the Company or shall, at the written request of the
Company, destroy such cancelled Right Certificates and, in such case, shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
Capital Stock. (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or authorized and issued shares of Preferred Stock held in its
treasury (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or any authorized and issued
shares of Common Stock held in its treasury), the number of shares of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock) that
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) If and so long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock or other
securities) issuable and deliverable upon the exercise of Rights may be listed
on any national securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
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(c) The Company shall (i) prepare and file, as soon
as practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act of 1933 (the "Act") with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and (iii) use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the date of the expiration of the Rights. The Company will also
take such action as may be appropriate under the blue sky laws of the various
states. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare
and file such registration statement. Upon any such suspension, the Company
shall issue a public announcement and notice to the Rights Agent stating that
the exercisability of the Rights has been temporarily suspended, and the
Company shall issue a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction in which any requisite registration or
qualification shall not have been obtained.
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(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one one-hundredths
of a share of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates therefor (subject to payment
of the Purchase Price or the Exercise Price, as the case may be), be duly and
validly authorized and issued, fully paid and nonassessable, freely tradeable,
free and clear of any liens, encumbrances or other adverse claims and not
subject to call or first refusal.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any one one-hundredth of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required (a) to pay any transfer
tax which may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates or the issuance or delivery of certificates for
the one one-hundredth of a share of Preferred Stock (or Common Stock or other
securities, as the case may be) in a name other than that of the registered
holder of the Right Certificate
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evidencing the Rights surrendered for exercise or (b) to issue or deliver any
certificates for a number of one one-hundredths of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one one-hundredths of a
share of Preferred Stock (or shares of Common Stock or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such one one-hundredths of a
share of Preferred Stock (or Common Stock or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (or the Exercise Price, as the case may be) and
any applicable transfer taxes was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Common
Stock or other securities, as the case may be) transfer books of the Company
are closed, such person shall be deemed to have become the record
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holder thereof on, and such certificate shall be dated, the next succeeding
business day on which the Preferred Stock (or Common Stock or other securities,
as the case may be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Exercise
Price, Number and Type of Shares or Number of Rights. The Purchase Price and
the Exercise Price, the number of shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of the Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a
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consolidation or merger in which the Company is the continuing corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Person (other than the Company, any
Subsidiary, any employee benefit plan or employee stock ownership plan
of the
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Company or of any Subsidiary or any Person organized, appointed or
established by the Company or any Subsidiary for or pursuant to the
terms of any such plan), alone or together with any of its Affiliates
or Associates, becomes the Beneficial Owner of 24% or more of the
Common Stock of the Company then outstanding,
(B) any person is declared to be an Adverse Person
by the Board of Directors,
(C) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, other than in a transaction subject
to Section 13(a), (1) merges into or consolidates with the Company and
the Company is the surviving or continuing corporation in the merger
or consolidation, (2) merges or consolidates with a Subsidiary,
whether or not the Subsidiary is the surviving or continuing
corporation in the merger or consolidation, (3) sells, purchases,
leases, exchanges, mortgages, pledges or otherwise disposes of or
acquires, to, from or with the Company or a Subsidiary, assets having
an aggregate Fair Market Value (as such term is defined in Article
Tenth, Section (d)(5), of the
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<PAGE> 34
Company's Restated Certificate of Incorporation) equal to or exceeding
20% of the Fair Market Value of the consolidated assets of the Company
and its Subsidiaries, (4) purchases or otherwise acquires from the
Company or a Subsidiary securities for cash or other consideration
having an aggregate Fair Market Value equal to or exceeding 20% of the
Fair Market Value of the consolidated assets of the Company and its
Subsidiaries, (5) sells or otherwise transfers, to the Company or a
Subsidiary, securities for cash or other consideration having an
aggregate Fair Market Value equal to or exceeding 20% of the Fair
Market Value of the consolidated assets of the Company and its
Subsidiaries, (6) proposes the liquidation or dissolution of the
Company or (7) engages in any transaction or series of transactions
that is similar in purpose or effect those referred to in clauses (1)
through (6) above or in Subsection (D) below or
(D) during such time as there is an Acquiring
Person, there is any reclassification of securities (including any
reverse stock split), recapitalization of the Company, merger or
consolidation of the Company with any Subsidiary or other transaction
or series of
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<PAGE> 35
transactions to which the Company or any Subsidiary is a party
(whether with, into or otherwise involving an Acquiring Person or any
Associate or Affiliate of an Acquiring Person), other than a
transaction subject to Section 13(a), that has the effect, directly or
indirectly, of increasing by more than 1% the percentage of the
outstanding equity securities of any class, or of securities
exercisable for or convertible into equity securities of any class, of
the Company or any Subsidiary that is beneficially owned, directly or
indirectly, by an Acquiring Person or any Associate or Affiliate of an
Acquiring Person,
proper provisions shall be made so that, from and after the close of business
on the tenth calendar day after the first of such events has occurred, each
holder of a Right (except as provided in Section 7(e) shall thereafter have the
right to receive, upon exercise of the Right in accordance with the terms of
this Agreement, one share of Common Stock of the Company for an Exercise Price
of $5.00 per share (such shares are hereinafter referred to as the "Adjustment
Shares"); the number of such Adjustment Shares and the Exercise Price shall be
subject to adjustment as provided in this Section 11.
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<PAGE> 36
(iii) In the event that the number of shares of
Common Stock which is authorized by the Company's certificate of incorporation
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the subparagraph (ii) of this Section 11(a), the
Continuing Directors shall (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (assuming Payment of
the Exercise price for the Adjustment Shares) over (2) the Exercise Price (such
excess, the "Spread"), and (B) upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, the Company shall deliver
uniformly on a pro rata basis to the holders of all outstanding Rights shares
of Common Stock (to the extent available) and cash (to the extent sufficient
shares of Common Stock are not available) in an amount (determined by the
Continuing Directors) equal to the excess of the Spread over the value of the
shares of Common Stock so delivered. To the extent that any legal or
contractual restrictions prevent the Company from paying the full amount of the
cash payable in accordance with the foregoing sentence, the Company shall pay
to holders of the Rights uniformly on a pro rata basis all funds which are not
then restricted. The Company shall continue to make
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payments on a pro rata basis as funds become available until such payments have
been paid in full.
(b) In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock") or securities convertible into Preferred Stock or equivalent
preferred stock) at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as defined in Section 11(d)) per share of
Preferred Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, of which the
numerator shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at
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<PAGE> 38
such current market price and of which the denominator shall be the number of
shares of Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date has
not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular
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periodic cash dividend at a rate not in excess of 125% of the rate of the last
cash dividend theretofore paid or a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, of which the numerator shall be the current market price
(as defined in Section 11(d)) per share of Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock and of which the denominator shall
be such current market price per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current market price" or "value" per share
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of the Common Stock on any date of determination shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that, in the event that the "current
market price" or "value" per share of the Common Stock is determined during the
period following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock or (B) any
sub-division, combination or reclassification of such Common Stock and prior to
the expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution or the record date for such sub-division, combination or
reclassification, then, and in each such case, the "current market price" or
"value" shall be appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if shares of
the Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the
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principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which shares of the
Common Stock are listed or admitted to trading or, if shares of the Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use or, if on any such date shares of
the Common Stock are not quoted by such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
closing price on such date shall be the value of a share of Common Stock on
such date as determined in good faith by the Continuing Directors if the
Continuing Directors constitute a majority of the Board of Directors or, if the
Continuing Directors do not constitute a majority of the Board of Directors, by
an independent investment banking firm selected by the Board of Directors. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which shares of Common Stock are listed or admitted to trading is
open for the transaction of business
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or, if shares of the Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of Ohio are not authorized or
obligated by law or executive order to close. If the Common Stock is not
publicly held or not so listed or traded, "current market price" or "value" per
share shall mean the value per share as determined in good faith by the
Continuing Directors of the Company if the Continuing Directors constitute a
majority of the Board of Directors or, if the Continuing Directors do not
constitute a majority of the Board of Directors, by an independent investment
banking firm selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in subparagraph (i) of
this Section 11(d) (other than the last sentence thereof). If the "current
market price" per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in subparagraph (i) of this Section 11(d), the
"current market price" per share of
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Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the value per share as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the "current
market price" of one one-hundredth of a share of Preferred Stock shall be equal
to the "current market price" of one share of Preferred Stock divided by 100.
(e) No adjustment in the Purchase Price or the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-millionth of a share of Preferred Stock or ten-
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thousandth of a share of Common Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the date of
the transaction which mandates such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right exercised after such adjustment becomes
entitled to receive upon exercise of such Right any shares of capital stock of
the Company other than Preferred Stock, thereafter the Number of and the
Exercise Price for such other shares so receivable shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a) through (m), inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price or the Exercise Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price
or the adjusted Exercise Price, as the case may be, the number of one
one-hundredths of a share of Preferred Stock or the number of shares of Common
Stock or other securities, as
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the case may be, purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price or the Exercise Price as a result of the calculations made in Sections
11(b) and (c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price or the adjusted Exercise Price, as the case may be, that number
of one one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) or that number of shares of Common Stock of the Company
(calculated to the nearest ten- thousandth), as the case may be, obtained by
(i) multiplying (x) the number of one one-hundredths of a share of Preferred
Stock or the number of shares of Common Stock of the Company, as the case may
be, covered by a Right immediately prior to this adjustment by (y) the Purchase
Price or the Exercise Price, as the case may be, in effect immediately prior to
such adjustment and (ii) dividing the product so obtained by the Purchase Price
or the Exercise Price, as the case may be, in effect immediately after such
adjustment.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price or the
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Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock or
the number of shares of Common Stock of the Company, as the case may be,
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one- hundredths of a share of Preferred Stock or the number of shares of
Common Stock of the Company, as the case may be, for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price or the Exercise Price, as the case may be, in effect immediately
prior to such adjustment by the Purchase Price or the Exercise Price, as the
case may be, in effect immediately after such adjustment. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment to be made. This record date may
be the date on which the Purchase Price or the Exercise Price, as the case may
be, is adjusted or any day thereafter but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this
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Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price or the adjusted Exercise Price) and shall be registered in the names of
the holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Notwithstanding any adjustment or change in the
Purchase Price, the Exercise Price or the number of one one-hundredths of a
share of Preferred Stock or the number of shares of Common Stock of the Company
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price, the Exercise
Price and the number of one one-hundredths of a share of Preferred Stock
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and the number of shares of Common Stock of the Company which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the then
stated capital, if any, of a share of Preferred Stock issuable upon exercise of
the Rights or reducing the Exercise Price below the stated capital, if any, of
a Common Share issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a share of such Preferred Stock at such
adjusted Purchase Price and fully paid and nonassessable shares of Common Stock
at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price or the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the holder of any Right
exercised after such record date the number of one one-hundredths of a share of
Preferred Stock and the number of share of Common Stock of the Company, if any,
issuable upon such exercise over and above the number of one one-hundredths of
a share of Preferred Stock and the
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number of shares of Common Stock of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price or the Exercise Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional one one-hundredths of a share of Preferred
Stock or additional shares of Common Stock of the Company upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reduction in the
Purchase Price or the Exercise Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it in its sole
discretion determines to be advisable in order that any consolidation or
sub-division of Preferred Stock or Common Stock of the Company, issuance wholly
for cash of any shares of Preferred Stock or Common Stock of the Company at
less than the current market price, issuance wholly for cash of securities
which by their terms are convertible into or exchangeable for Preferred Stock
or Common Stock of the Company, stock dividends or issuance of rights, options
or warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Stock or Common Stock shall not be taxable to such
holders.
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Section 12. Certificates of Adjusted Purchase Price,
Exercise Price or Number of Shares. Whenever an adjustment is made as provided
in Sections 11 and 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. (a) In the event that, following the
Distribution Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person and the Company shall not be the
continuing or surviving corporation, (y) any Person shall consolidate or merge
with and into the Company, the Company shall be the continuing or surviving
corporation and, in connection with the consolidation or merger, all or part of
the Common Stock of the Company shall be changed into or exchanged for cash or
other
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property or stock or other securities of any Person other than the Company
(except for a merger in which (1) each share of Common Stock of the Company
outstanding immediately prior to the merger is changed into or exchanged for
Common Stock of such other Person having a vote or number of votes in elections
of directors that represents the same percentage of the total number of votes
of all capital stock of such other Person outstanding immediately after the
merger as the percentage of the total number of votes of all capital stock of
the Company outstanding immediately prior to the merger represented by each
such share of Common Stock of the Company and (2) such other Person becomes the
beneficial owner of all Common Stock of the Company outstanding immediately
after the merger), or (z) the Company shall sell or otherwise transfer (or one
or more of its subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more that 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) to any
other Person, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon exercise of the Right in
accordance with the terms of this Agreement, at the Exercise Price set forth in
Section 11(a)(ii) (subject to adjustment pursuant to the provisions of Section
11),
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such number of validly issued, fully paid, nonassessable and freely tradeable
Common Shares of the Principal Party (as hereinafter defined), free and clear
of any liens, encumbrances or other adverse claims and not subject to any
rights of call or first refusal, as shall be equal to the quotient of (A) the
market price (determined in the manner described in Section 11(d)), at the
close of business on the date on which the first such event occurs, of the
number of shares of Common Stock of the Company that would be purchasable upon
the occurrence of one of the events set forth in Section 11(a)(ii) divided by
(B) the market price per share of the Common Stock of the Principal Party as
the close of business on such date; (ii) the Principal Party shall thereafter
be liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party (it being specifically intended that the provisions of Section
11(a) (iii) shall apply to such Principal Party); (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9)
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter
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deliverable upon the exercise of the Rights; and (v) the provision of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any of
the transaction described in Section 13(a) hereof.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation; and
(2) in the case of any transaction described in (z)
of the first sentence in this Section 13, the Person that is the other
party to such transaction;
provided, however, that in any such case, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Securities Exchange Act of
1934, and such Person is a direct or indirect subsidiary of another corporation
the Common Stock of which (or the Common Stock of another subsidiary of which)
is and has been so registered, "Principal Party" shall refer to such other
corporation; (y) in case there is more than one such
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Person referred to in clause (x) of the proviso of this Section 13(b), or in
case there is more than one Person referred to in Section 13(b)(1) or (2), the
Common Stock of each of which is and has been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest market value of shares held by the public, and (z) in case
such Person is owned, directly or indirectly, by a joint venture formed by two
or more joint venturers, the rules set forth in (x) and (y) above shall apply
to each of the joint venturers having an interest in such joint venture as if
such joint venture were a "subsidiary" of both or all of such joint venturers
and the joint venturers shall each bear the obligations set forth in this
Section 13 in the same ratio as its direct or indirect interest in such joint
venture bears to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets described in paragraph
(a) of this Section 13, the Principal Party shall
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(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the date of
expiration of the Rights; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Securities Exchange Act of 1934.
The provision of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one of the
transactions described in Section 13(a) hereof shall occur at any time after
the occurrence of a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange,
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the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the current market value of a whole
Right shall be the value of the Rights on such date as determined in good faith
by the Board of Directors of the Company.
(b) The Company shall not be required to issue
fractions of shares of the Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares. In lieu of fractional shares that are not integral multiples of one
one- hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Right Certificates at the time such Right Certificates
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one one- hundredth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be
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one one-hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii)) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share of Common
Stock. For purposes of this Section 14(c), the current market value of one
share of Common Stock shall be the closing price of one share of Common Stock
(as determined pursuant to Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action
in respect of this Agreement are vested in the respective registered holders of
the Right Certificates
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(and, prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder
of a Right by accepting such Right consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the Common
Stock;
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(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed; and
(c) subject to Section 6(a), Section 7(e) and
Section 7(f), the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e), shall be required to be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number
of one
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one-hundredths of a share of Preferred Stock (or, following a Triggering Event,
of any Common Stock of the Company or other securities) which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
24), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate have been exercised in
accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent. The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time on demand of the
Rights Agent, to reimburse it for or pay its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, bad faith
or willful misconduct on the
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part of the Rights Agent as a result of anything done or omitted to be done by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Common Stock of the Company or other
securities, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged by the proper
person or persons.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation,
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper
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or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor so
counter-signed; in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases, such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
counter-signed; in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases,
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such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with the legal
counsel (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof is specifically prescribed in this Agreement) may be deemed to
be conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or
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omitted in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or be
required to verify such statements or recitals, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any adjustment required
under the pro visions of Sections 11 or 13 or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after
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actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or Common Stock to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock or Common Stock will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy,
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sell or deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorney or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
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(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Preferred Stock and Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any
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court of competent jurisdiction for the appointment of a successor Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such
a court, shall be a corporation organized and doing business under the law of
the United States or of the State of Ohio (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of Ohio), in good standing, having a principal office
in the State of Ohio, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state
authority or which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Preferred Stock and
Common Stock, and mail a notice thereof in writing to the registered holders of
the Right
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Certificates. Failure to give any notice provided for in this Section 21 or
any defect therein, however, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the
number, kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption. (a) The Board of Directors
of the Company may, at its option, at any time prior to 5:00 p.m., Cleveland
time, on the earlier of (x) the tenth calendar day following the Shares
Acquisition Date, or (y) the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price of $.05 per Right
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), provided; however, that if
such
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redemption occurs on or after the Shares Acquisition Date the Board of
Directors of the Company shall be entitled to so redeem the Rights only if
Continuing Directors constitute a majority of the Board of Directors at the
time of such redemption and such redemption is approved by a majority of the
Continuing Directors; provided, further, however, that if, following the
occurrence of a Shares Acquisition Date and following the expiration of the
right of redemption hereunder but prior to any Triggering Event, each of the
following shall have occurred and remain in effect: (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
shares of Common Stock in a transaction, or series of transactions, which did
not result in the occurrence of a Triggering Event, and such Person after such
transfer or other disposition is a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) such transfer or other disposition did not
result from a transaction, or series of transactions, which directly or
indirectly involved the Company or any of its subsidiaries; then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be
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exercisable pursuant to Section 11(a)(ii) prior to the expiration of the
Company's right of redemption pursuant to this Section 23(a) without regard to
the last proviso.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within ten calendar days after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any of the Rights at any time in any manner other than that
specifically set forth in this Section 23 or in connection with the repurchase
of Common Stock prior to the Distribution Date.
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Section 24. Notice of Certain Events. In case the
Company shall propose at any time following the Distribution Date (a) to pay
any dividend payable in stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred Stock (other than a
regular periodic cash dividend at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid), or (b) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
sub-division of outstanding Preferred Stock), or (d) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of
a Right, in accordance with Section 25, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date
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on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Preferred Stock, if any such date
is to be fixed, and such notice shall be so given, in the case of any action
described in clause (a) or (b) above, at least twenty days prior to the record
date for determining holders of the Preferred Stock for purposes of such action
and, in the case of any such other action, at least twenty days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Preferred Stock, whichever shall be the earlier.
In case any of the events set forth in Section
11(a)(ii) of this Agreement shall occur, then, in any such case, the Company
shall as soon as practicable thereafter give to each holder of a Right, in
accordance with Section 25, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii).
Section 25. Notices. Notice or demands authorized
by this Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given or made
if personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
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Oglebay Norton Company
1100 Superior Avenue
Cleveland, Ohio 44114-2598
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
AmeriTrust Company National Association
Corporate Trust Division
P.O. Box 6477
Cleveland, Ohio 44101
Attention: Doris Hogan
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to or on the holder of any
Right Certificate shall be sufficiently given or made if personally delivered
or sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contain herein which may be defective or
inconsistent with any other provision
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herein, or (iii) prior to the Distribution Date, to change or supplement the
provisions hereunder which the Company may deem necessary or desirable and not
adverse to the interests of the holders of the Rights; provided, however, that
this Agreement shall not be supplemented or amended in any way on or after the
Shares Acquisition Date (other than pursuant to clauses (i) and (ii) above)
unless such amendment is approved by a majority of the Continuing Directors and
the Continuing Directors constitute a majority of the Board of Directors. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interests under this
Agreement. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
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Section 28. Determination and Actions by the Board
of Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the provisions of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of Directors of the
Company (and, where expressly provided for herein, the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board, or the
Company (or, as expressly provided herein, the Continuing Directors), or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, as expressly provided herein, by the Continuing
Directors) in
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good faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and
(ii) not subject the Board or the Continuing Directors to any liability to the
holders of the Right Certificates.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates.
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company determines in its
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good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the Sections of this Agreement are inserted for convenience only
and shall not control or
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affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
<TABLE>
<S> <C>
(SEAL) OGLEBAY NORTON COMPANY
Attest:
By /s/ David A. Kuhn By /s/ Renold D. Thompson
------------------------------------- ---------------------------------
(SEAL) AMERITRUST COMPANY NATIONAL
ASSOCIATION
By /s/ R. Schmidt By /s/ Doris A. Hogan
------------------------------------- ---------------------------------
</TABLE>
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Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C $10.00 PREFERRED STOCK
OF
OGLEBAY NORTON COMPANY
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Renold D. Thompson, President and Chief Executive
Officer, and David A. Kuhn, Secretary, of Oglebay Norton Company, a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Restated Certificate of Incorporation of the
Corporation, the Board of Directors on August 26, 1987, adopted the following
resolution creating a series of 100,000 shares of Preferred Stock designated as
Series C $10.00 Preferred Stock:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of the Corporation in accordance with the provisions of
its Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation. The shares of such series is
designated as the "Series C $10.00 Preferred Stock" (the "Series C Preferred
Stock").
Section 2. Authorized Number of Shares; Fractional
Shares. The authorized number of shares constituting the Series C Preferred
Stock is 100,000. Series C Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have
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the benefit of all other rights of holders of Series C Preferred Stock.
Section 3. Dividends and Distributions.
(A) Subject to any prior and superior rights of the
holders of any series of Preferred Stock ranking prior and superior to the
shares of Series C Preferred Stock with respect to dividends that may be
authorized by the Restated Certificate of Incorporation, the holders of shares
of Series C Preferred Stock shall be entitled prior to the payment of any
dividends on shares ranking junior to the Series C Preferred Stock to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of March, June, September and December 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 share or
fraction of a share of Series C Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) subject
to the provisions 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 shares of 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 share or fraction of a share of Series C
Preferred Stock. In the event the Corporation shall at any time after August
26, 1987 (the "Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series
C Preferred Stock were entitled immediately prior to such event under clause
(b) 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) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as
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<PAGE> 83
provided in paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
a dividend of $10.00 per share on the Series C Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
C Preferred Stock, 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 C Preferred Stock 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.
(D) Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.
(E) Dividends in full shall not be declared or paid
or set apart for payment on the Series C Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full
have been declared or paid or set apart for payment on the Preferred Stock of
all series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective dividend
periods terminating on such dividend date. When the dividends are not paid in
full on all series of the Preferred Stock, the shares of all series shall share
ratably in the payment of
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dividends, including accumulations, if any, in accordance with the sums which
would be payable on such shares if all dividends were declared and paid in
full.
4. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up
of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series C Preferred Stock unless, prior thereto, the
holders of shares of Series C Preferred Stock shall have received $10.00 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series C
Liquidation Preference"). Following the payment of the full amount of the
Series C Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series C Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
C Liquidation Preference by (ii) 100 (as appropriately adjusted in accordance
with subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii) is hereinafter referred to as the "Adjustment Number").
Following the payment of the full amount of the Series C Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series C
Preferred Stock and Common Stock, respectively, holders of Series C Preferred
Stock and holders of shares of Common Stock shall receive their ratable and
proportionate share, on a per share basis, of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the Series C
Liquidation Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series C Preferred
Stock, then such remaining assets shall be distributed ratably to the holders
of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
A-4
<PAGE> 85
(C) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number 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.
5. Conversion on Merger, Consolidation, etc. In case
the Corporation shall enter into any merger, consolidation, combination or
other transaction in which the shares of Common Stock are exchanged or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series C Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series C Preferred Stock 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.
6. Redemption. The outstanding shares of Series C
Preferred Stock shall not be redeemable.
7. Voting Rights. Each holder of shares of Series C
Preferred Stock shall be entitled to one hundred votes for each share held, and
except as otherwise by law provided, the holders of Series C Preferred Stock
and the holders of Common Stock of the Corporation shall vote together as one
class.
A-5
<PAGE> 86
8. Condition to Issuance of any other Series. The
Restated Certificate of Incorporation of the Corporation shall not be further
amended to provide for the issuance of any other series of Preferred Stock
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series C Preferred Stock, voting separately as one voting
group.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the penalties of
perjury this ____ day of August, 1987.
<TABLE>
<S> <C>
--------------------------------
President
Attest:
- -------------------------
Secretary
</TABLE>
A-6
<PAGE> 87
Exhibit B
[Form of Right Certificate]
Certificate No. R - _____________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 7, 1997 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $65.00 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES Specified IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*
RIGHT CERTIFICATE
This certifies that __________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement dated as of February
22, 1989 (the "Rights Agreement") between Oglebay Norton Company, a Delaware
corporation (the "Company"), and AmeriTrust Company National Association, a
national banking association (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to
__________________________________
* The portion of the legend in brackets shall be inserted only if
applicable.
B-1
<PAGE> 88
5:00 P.M., Cleveland time, on September 7, 1997 at the office of the Rights
Agent, or its successors as Rights Agent, in Cleveland, Ohio, one one-hundredth
of a fully paid nonassessable share of the Series C $10.00 Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $65.00 per one
one-hundredth of a share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate, the number
of shares of Preferred Stock which may be purchased upon exercise thereof and
the Purchase Price per share set forth above are the numbers and Purchase Price
as of August 26, 1987, based on the Preferred Stock of the Company as
constituted at such date. Upon the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to
B-2
<PAGE> 89
such Rights from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase
Price, the Exercise Price (as such term is defined in the Rights Agreement) and
number and kind of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made
a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the office
of the Rights Agent mentioned above.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of one one-hundredths of a share of Preferred Stock as the Rights
evidenced by the Right
B-3
<PAGE> 90
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be redeemed by the Company
at its option at a redemption price of $.05 per Right.
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of
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<PAGE> 91
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
___________________, 19__.
<TABLE>
<S> <C>
ATTEST: OGLEBAY NORTON COMPANY
________________________ By______________________________
Secretary Title:
Countersigned:
By_______________________
</TABLE>
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<PAGE> 92
[Form of Reverse Side of Right Certificate]
Form of Assignment
(To be executed by the registered holder if the holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________ hereby sells,
assigns and transfers unto
________________________________________________________________________________
___________________
________________________________________________________________________________
_____________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
___________________ as attorney, to transfer the Right Certificate on the books
of the Oglebay Norton Company, with full power of substitution.
<TABLE>
<S> <C> <C>
Dated: , 19__
-------------------
--------------------------------
Signature
Signature Guaranteed:
</TABLE>
B-6
<PAGE> 93
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
<TABLE>
<S> <C>
Dated:
------------------- --------------------------------
Signature
Signature
</TABLE>
Notice
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
B-7
<PAGE> 94
Form of Election to Purchase
(To be executed if the holder desires to
exercise the Right Certificate)
To Oglebay Norton Company:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
shares of the Common Stock issuable upon the exercise of such Rights and
requests that certificates for such shares be issues in the name of:
________________________________________________________________________________
_____________________________________________________
(Please print name and address)
________________________________________________________________________________
_____________________________________________________
Please insert social security
or other identifying
number:_________________________________________________________________________
________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
_____________________________________________________
(Please print name and address)
Please insert social security
or other identifying
number:_________________________________________________________________________
________________________________
<TABLE>
<S> <C> <C>
Dated: , 19__
------------------
---------------------------------
Signature
(Signature must conform in all
respects to name of the holder
as specified on the face of this
Right Certificate)
Signature Guaranteed:
</TABLE>
B-8
<PAGE> 95
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
<TABLE>
<S> <C> <C>
Dated: , 19__
------------- --------------------------------
Signature
</TABLE>
Notice
The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the fact of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
B-9
<PAGE> 96
Exhibit C
---------
SUMMARY OF AMENDED RIGHTS TO PURCHASE
PREFERRED STOCK
On August 26, 1987, the Board of Directors of Oglebay
Norton Company (the "Company") declared a dividend consisting of one Right for
each outstanding share of Common Stock with a par value of $1 per share (the
"Common Stock") of the Company. The distribution was paid on September 7, 1987
(the "Record Date") to the stockholders of record on the Record Date. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series C $10.00 Preferred Stock (the "Preferred
Stock") at a price of $65.00 (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in an Amended and
Restated Rights Agreement (the "Rights Agreement") between the Company and
AmeriTrust Company National Association, as Rights Agent (the "Rights Agent"),
adopted by the Company on February 22, 1989.
Until the earlier to occur of (i) ten days following
a public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the shares of the Common Stock then
outstanding or has been declared by the Board of Directors of the Company to be
an Adverse Person or (ii) ten days following the commencement or announcement
of an intention to commence a tender offer or exchange offer by any person if,
upon consummation thereof, such person would be an Acquiring Person (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificates with a copy of this
Summary of Amended Rights attached thereto. An "Adverse Person" is defined as
a person or group of affiliated or associated persons declared to be an Adverse
Person by the Board of Directors of the Company upon a determination that such
person or group has become, or has announced an intention to become, the
beneficial owner of a substantial amount of Common Stock (not, however, less
than 15% of the outstanding Common Stock) and that such beneficial ownership
will have consequences that are adverse to the interest of the Company and its
stockholders.
C-1
<PAGE> 97
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Stock. Until the Distribution Date (or the earlier redemption or expiration of
the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or the earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates, even without a copy of this
Summary of Amended Rights attached thereto, will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on September 7, 1997
unless earlier redeemed by the Company as described below.
The Purchase Price payable, and the number of shares
of Preferred Stock (or Common Stock, other securities, cash or other assets, as
the case may be) issuable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for shares of the Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends out of
earnings or retained earnings at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid or dividends payable in the Preferred
Stock) or of subscription rights or warrants (other than those referred to
above).
In the event that the Company were acquired in a
merger or other business combination or that 50% or more of its assets or
earning power were sold, proper provision shall be made so that the holder of
each Right, other than Rights that were or are beneficially owned by the
Acquiring Person (which will thereafter be void), shall thereafter have the
right to receive, upon the exercise of
C-2
<PAGE> 98
the Right and the payment of an Exercise Price of $5.00, that number of shares
of common stock of the acquiring company equal to the quotient of (A) the
market price per share of the Common Stock of the Company divided by (B) the
market price per share of the common stock of the acquiring company. In the
event that (i) the Company is the surviving corporation in a merger and its
Common Stock is not changed or exchanged, (ii) an Acquiring Person engages in
one of a number of self-dealing transactions specified in the Rights Agreement,
(iii) there is a reclassification or recapitalization of the Company that has
the effect of increasing by more than 1% the proportionate ownership of shares
of the Company by the Acquiring person or (iv) a person or group of affiliated
or associated persons acquires, or obtains the right to acquire, beneficial
ownership of 24% or more of the shares of the Common Stock then outstanding,
proper provision will be made so that the holder of each Right, other than
Rights that were or are beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise of
the Right and the payment of the Exercise Price of $5.00, one share of Common
Stock of the Company. The Exercise Price and the number of shares purchasable
upon exercise of the Rights will be subject to anti-dilution adjustment as
provided in the Rights Agreement.
With certain exceptions, no adjustment in the
Purchase Price or the Exercise Price will be required until cumulative
adjustments require an adjustment of at least 1% in the Purchase Price or the
Exercise Price. No fractional shares will be issued (other than fractional
shares which are integral multiples of one one-hundredth of a share of
Preferred Stock) and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Stock on the last trading date prior to
the date of exercise.
At any time prior to 5:00 p.m. Cleveland time on the
tenth day following public announcement that a person or group of affiliated or
associated persons has become an Acquiring Person (the "Shares Acquisition
Date"), the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.05 per Right (the "Redemption Price"),
provided that if such redemption occurs on or after the Shares Acquisition Date
the Board shall be entitled to redeem the Rights only if such redemption is
approved by a majority of the Continuing Directors (as defined in the Rights
Agreement) and the Continuing Directors constitute a majority of the Board of
Directors. Thereafter, the Company's right of redemption
C-3
<PAGE> 99
may be reinstated if an Acquiring Person reduces his beneficial ownership to
10% or less of the outstanding shares of Common Stock in a transaction or
series of transactions not involving the Company. Immediately upon the action
of the Board of Directors of the Company electing to redeem the Rights, the
Company shall make announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The provisions of the Rights Agreement may be amended
by the Board of Directors in order to cure any ambiguity or correct any defect
or inconsistency and by the Continuing Directors, prior to the Distribution
Date, to make changes deemed to be not adverse to the interests of the holders
of the Rights.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to an Amendment to Application
or Report on Form 8. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
C-4
<PAGE> 100
Exhibit 4(b)
FIRST AMENDMENT
TO
AMENDED AND RESTATED
RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED RIGHTS
AGREEMENT (this "Amendment"), dated as of June 10, 1991, is between Oglebay
Norton Company, a Delaware corporation (the "Company"), and Ameritrust Company
National Association, a national banking association (the "Rights Agent").
This Amendment amends the Amended and Restated Rights Agreement, dated as of
February 22, 1989, between the Company and the Rights Agent (the "Amended and
Restated Rights Agreement").
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent entered
into a Rights Agreement, dated as of August 26, 1987, which has been amended
and restated by the Amended and Restated Rights Agreement; and
WHEREAS, the Board of Directors of the Company,
pursuant to Section 26 of the Amended and Restated Rights Agreement, has deemed
it to be desirable and not adverse to the interests of the Company, its
stockholders, and the holders of the Rights that the Amended and Restated
Rights Agreement be amended as set forth herein;
NOW, THEREFORE, the Company and the Rights Agent
agree as follows:
<PAGE> 101
1. Clause (A) of Section 11(a)(ii) of the Amended
and Restated Rights Agreement shall be amended to read as follows:
(A) any Person (other than the Company, any
Subsidiary, any employee benefit plan or employee stock ownership plan
of the Company or of any Subsidiary or any Person organized, appointed
or established by the Company or any Subsidiary for or pursuant to the
terms of any such plan), alone or together with any of its Affiliates
or Associates, becomes the Beneficial Owner of 20% or more of the
Common Stock of the Company then outstanding, or
2. Clause (C) of Section 11(a)(ii) of the Amended
and Restated Rights Agreement shall be deleted in its entirety.
3. Clause (D) of Section 11(a)(ii) of the Amended
and Restated Rights Agreement shall be deleted in its entirety.
4. Section 23(a) of the Amended and Restated Rights
Agreement shall be amended to read as follows:
Section 23. Redemption. (a) The Board of Directors
-----------
of the Company may, at its option, at any time prior to 5:00 p.m.,
Cleveland time, on the earlier of (x) the tenth calendar day following
the occurrence of any event described in Section 11(a)(ii), (y) the
occurrence of any event described in Section 13(a), or (z) the Final
Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.05 per Right
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price");
provided, however, that if such redemption occurs on or after the
--------- --------
Shares Acquisition Date the Board of Directors of the Company shall be
entitled to so redeem the Rights only if Continuing Directors
constitute a majority of the Board of Directors at the time of
-2-
<PAGE> 102
such redemption and such redemption is approved by a majority of the
Continuing Directors. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's
right of redemption pursuant to this Section 23(a).
5. Section 26 of the Amended and Restated Rights
Agreement shall be amended to read as follows:
Section 26. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision
herein, or (iii) prior to (x) the tenth calendar day following the
occurrence of any event described in Section 11(a)(ii) or (y) the
occurrence of any event described in Section 13(a), to change or
supplement the provisions hereunder which the Company may deem
necessary or desirable and not adverse to the interests of the holders
of the Rights;provided, however, that this Agreement shall not be
supplemented or amended in any way on or after the Shares Acquisition
Date (other than pursuant to clauses (i) and (ii) above) unless such
amendment is approved by a majority of the Continuing Directors and
the Continuing Directors constitute a majority of the Board of
Directors. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interests under this
Agreement. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
6. Schedule 1 to this Amendment sets forth a Summary
of Rights to Purchase Preferred Stock (As Amended as of June 10, 1991) that
updates and replaces the Summary of Amended Rights to Purchase Preferred Stock
attached as
-3-
<PAGE> 103
Exhibit B to the Amended and Restated Rights Agreement to reflect the
amendments contained in this Amendment.
7. This Amendment shall be binding upon and shall
inure to the benefit of each of the parties and their respective successors and
assigns.
8. Except as amended by this Amendment, all other
provisions of the Amended and Restated Rights Agreement shall remain in full
force and effect and are unchanged hereby.
9. Unless otherwise defined herein, all defined
terms used herein shall have the meanings given to them in the Amended and
Restated Rights Agreement.
10. This Amendment shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware applicable to
contracts to be made and performed entirely within that State.
IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed as of the day and year first above written.
<TABLE>
<S> <C>
OGLEBAY NORTON COMPANY
By: /s/ Renold D. Thompson
--------------------------------------
Name: Renold D. Thompson
Title: President and Chief
Executive Officer
AMERITRUST COMPANY NATIONAL ASSOCIATION
By: /s/ Caroline Lukez-Byrne
---------------------------------------
Name: Caroline Lukez-Byrne
Title: Trust Officer and
Assistant Secretary
</TABLE>
-4-
<PAGE> 104
Schedule 1
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
(As Amended As of June 10, 1991)
On August 26, 1987, the Board of Directors of Oglebay
Norton Company (the "Company") declared a dividend consisting of one Right for
each outstanding share of Common Stock with a par value of $1 per share (the
"Common Stock") of the Company. The distribution was paid on September 7, 1987
(the "Record Date") to the stockholders of record on the Record Date. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series C $10.00 Preferred Stock (the "Preferred
Stock") at a price of $65.00 (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in an Amended and
Restated Rights Agreement, between the Company and Ameritrust Company National
Association, as Rights Agent (the "Rights Agent"), adopted by the Company on
February 22, 1989, as modified by a First Amendment to Amended and Restated
Rights Agreement, dated as of June 10, 1991, between the Company and the Rights
Agent (the Amended and Restated Rights Agreement, as amended, being hereinafter
referred to as the "Rights Agreement").
Until the earlier to occur of (i) ten days following
a public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the shares of the Common Stock then
outstanding or has been declared by the Board of Directors of the Company to be
an Adverse Person or (ii) ten days following the commencement or announcement
of an intention to commence a tender offer or exchange offer by any person if,
upon consummation thereof, such person would be an Acquiring Person (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificates with a copy of this
Summary of Amended Rights attached thereto. An "Adverse Person" is defined as
a person or group of affiliated or associated persons declared to be an Adverse
Person by the Board of Directors of the Company upon a determination that such
person or group has become, or has announced an intention to become, the
beneficial owner of a substantial amount of Common Stock (not, however, less
than 15% of the outstanding Common Stock) and that such beneficial ownership
will have consequences that are adverse to the interest of the Company and its
stockholders.
-1-
<PAGE> 105
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Stock. Until the Distribution Date (or the earlier redemption or expiration of
the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or the earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates, even without a copy of this
Summary of Amended Rights attached thereto, will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on September 7, 1997
unless earlier redeemed by the Company as described below.
The Purchase Price payable, and the number of shares
of Preferred Stock (or Common Stock, other securities, cash or other assets, as
the case may be) issuable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for shares of the Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends out of
earnings or retained earnings at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid or dividends payable in the Preferred
Stock) or of subscription rights or warrants (other than those referred to
above).
In the event that the Company were acquired in a
merger or other business combination or that 50% or more of its assets or
earning power were sold (such event being hereinafter referred to as a
"Flip-over Event"), proper provision shall be made so that the holder of each
Right, other than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have the right to
receive, upon the exercise of the Right and the payment of an Exercise Price of
$5.00, that number of shares of common stock of the acquiring company equal to
the quotient of (A) the market
-2-
<PAGE> 106
price per share of the Common Stock of the Company divided by (B) the market
price per share of the common stock of the acquiring company. In the event
that (i) the Company is the surviving corporation in a merger and its Common
Stock is not changed or exchanged, (ii) any person is declared to be an Adverse
Person by the Board of Directors, or (iii) any person or group of affiliated or
associated persons acquires, or obtains the right to acquire, beneficial
ownership of 20% or more of the shares of the Common Stock then outstanding
(any such event being hereinafter referred to as a "Flip-in Event"), proper
provision will be made so that the holder of each Right, other than Rights that
were or are beneficially owned by the Acquiring Person (which will thereafter
be void), will thereafter have the right to receive, upon exercise of the Right
and the payment of the Exercise Price of $5.00, one share of Common Stock of
the Company. The Exercise Price and the number of shares purchasable upon
exercise of the Rights will be subject to anti-dilution adjustment as provided
in the Rights Agreement.
With certain exceptions, no adjustment in the
Purchase Price or the Exercise Price will be required until cumulative
adjustments require an adjustment of at least 1% in the Purchase Price or the
Exercise Price. No fractional shares will be issued (other than fractional
shares which are integral multiples of one one-hundredth of a share of
Preferred Stock) and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Stock on the last trading date prior to
the date of exercise.
At any time prior to 5:00 p.m. Cleveland time (a) on
the tenth day following the occurrence of a Flip-in Event or (b) on the day on
which a Flip-over Event occurs, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.05 per Right (the
"Redemption Price"), provided that if such redemption occurs on or after the
day on which a public announcement is made that a person or group of affiliated
or associated persons has become an Acquiring Person (the "Shares Acquisition
Date"), the Board shall be entitled to redeem the Rights only if such
redemption is approved by a majority of the Continuing Directors (as defined in
the Rights Agreement) and the Continuing Directors constitute a majority of the
Board of Directors. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, the Company shall make announcement
thereof, and upon such election, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of
-3-
<PAGE> 107
the Company, including, without limitation, the right to vote or to receive
dividends.
The provisions of the Rights Agreement may be amended
by the Board of Directors in order to cure any ambiguity or correct any defect
or inconsistency and, prior to (a) the tenth calendar day following the
occurrence of a Flip-in Event or (b) the occurrence of a Flip-over Event, to
make changes deemed to be not adverse to the interests of the holders of the
Rights, provided that, if such amendment occurs on or after the Shares
Acquisition Date, the Board shall be entitled to amend the Rights Agreement
only if such amendment is approved by a majority of the Continuing Directors
(as defined in the Rights Agreement) and the Continuing Directors constitute a
majority of the Board of Directors.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to an Amendment to
Application or Report on Form 8. A copy of the Rights Agreement is also
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
-4-
<PAGE> 108
Exhibit 4(b)
SECOND AMENDMENT
TO
RIGHTS AGREEMENT
THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is
entered into as of March 2, 1992, between Oglebay Norton Company, a Delaware
corporation (the "Company), and Ameritrust Company National Association, Rights
Agent (the "Rights Agent"). This Amendment modifies and amends the Amended and
Restated Rights Agreement, dated as of February 22, 1989, between the Company
and the Rights Agent (the "Rights Agreement").
IN CONSIDERATION OF the premises and mutual agreements herein set
forth, the Company and the Rights Agent agree as follows:
1. Amendment of Section 1(d) (iv). Section 1(d)(iv)
of the Rights Agreement is amended to read as follows:
"(iv) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) (except an agreement,
arrangement or understanding with the Company that either is approved
by the Board of Directors before a Shares Acquisition Date or is
approved by a majority of the Continuing Directors on or after the
Shares Acquisition Date) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in subparagraph
(iii) of this paragraph (d)) or disposing of any securities of the
Company."
<PAGE> 109
2. Effectiveness. This Amendment shall be deemed to
be in force and effective as of the date hereof. Except as amended hereby, the
Rights Agreement shall remain in full force and effect and shall otherwise be
unaffected hereby.
3. Miscellaneous.
(a) This Amendment shall be binding upon and shall
inure to the benefit of each of the parties and their respective successors and
assigns.
(b) Unless otherwise defined herein, each of the
defined terms used herein shall have the same meaning given to it in the Rights
Agreement.
(c) This Amendment shall be deemed to be a contract
made under the substantive laws of the State of Ohio and for all purposes shall
be governed by and construed in accordance with the internal substantive laws
of the State of Ohio applicable to contracts to be made and performed entirely
within the State of Ohio.
IN WITNESS WHEREOF, the Company and the Rights Agent
have caused this Amendment to be duly executed as of the day and year first
above written.
<TABLE>
<S> <C>
OGLEBAY NORTON COMPANY
By: /s/ Renold D. Thompson
-----------------------------
Title: President
AMERITRUST COMPANY NATION ASSOCIATION
By: /s/ Caroline Lukez-Byrne
----------------------------
Title: Trust Officer II and
Assistant Secretary
</TABLE>
-2-
<PAGE> 1
Exhibit 10(a)
AGREEMENT
---------
THIS AGREEMENT, made this ____ day of _____________, 19___, between OGLEBAY
NORTON COMPANY, a Delaware corporation (hereinafter called the "Company"), and
______________________ (hereinafter called "Employee");
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Employee, age ____, has served the Company for more than __________
years as an officer and employee and, at the present time, as the
_________________________________ ____________________________ and
_____________________________ of the Company;
WHEREAS, Employee has performed valuable services and has developed and
possesses valuable knowledge and executive and administrative skill with
respect to the operation of the business of the Company;
WHEREAS, the Company considers it to be in the best interests of the Company
to secure Employee's full-time services, to induce him to continue as
____________________ ___________________________________ of the Company or such
other position as may be determined by the Company's Board of Directors from
time to time, and to compensate him for such services;
WHEREAS, Employee desires to be assured of certain benefits and security for
himself and his family;
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and Employee mutually agree as follows:
1. Until such time as Employee attains the age of ____ years, Employee will
continue in the full-time, regular employ of the Company as its
_________________________________ _________________________ or such other
position as the Company's Board of Directors may determine.
2. The Company will employ Employee in the aforesaid capacity and,
effective _______________, his annual salary rate shall not be less than
_________________________ Dollars ($__________), subject to adjustment in the
event of any general salary increase or decrease hereafter in the salaries of
all by-law officers of the Company, plus an annual bonus in an amount
determined by the Company's Board of Directors or by an appropriate committee
of the Board.
3. Employee will, during his employment, perform to the best of his ability
all duties and responsibilities reasonably assigned to him by the Company's
Board of Directors, represent the Company and carry out the Company's policies
and directives and devote substantially his full time and attention to the
performance of such duties under the direction of the Company's Board of
Directors.
<PAGE> 3
4. During his employment, Employee will not engage either directly or
indirectly as an officer, director, employee, consultant or partner in any
business enterprise in competition with the Company to a degree contrary to its
best interests.
5. During his employment, Employee will be entitled to participate in and
be covered by all pension, profit-sharing, stock incentive, stock option,
incentive savings and insurance plans or programs or deferred compensation
arrangements heretofore or hereafter placed in effect by the Company for its
executives or salaried employees, and such period shall be credited as
continuous service under the applicable provisions of such plans, programs or
arrangements where length of service is a factor.
6. In addition to the compensation to be paid hereunder, the Company shall
pay such expenses as may reasonably be incurred by Employee in the performance
of his duties and responsibilities in the manner and to the same extent as it
does for other company officers of comparable rank.
7. This Agreement shall not be changed, modified or amended in any respect
except by a written instrument signed by Employee and such officer of the
Company as may be designated by the Company's Board of Directors.
8. If the Company shall at any time be merged or consolidated into or with
any other entity, or if substantially all of the assets of the Company are
transferred to another entity, the provisions of this Agreement shall be
binding upon and inure to the benefit of the entity resulting from such merger
or consolidation
<PAGE> 4
or to which such assets shall be transferred. This provision shall continue
to apply in the event of any subsequent merger, consolidation or transfer of
assets.
9. Employee shall have no right to commute, encumber or dispose of the
right to receive payments or benefits provided for hereunder, all of which are
expressly declared to be nonassignable and nontransferable.
10. This Agreement shall be governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
the day and year first above written, each intending to be legally bound
hereby.
OGLEBAY NORTON COMPANY
By_____________________________
President
Attest_________________________
Secretary
____________________________________
<PAGE> 1
Exhibit 10(b)
AGREEMENT
THIS AGREEMENT, entered into as of January 1, 1990,
is between OGLEBAY NORTON COMPANY, a Delaware corporation (the "Company"), and
Mr. Brent D. Baird ("Baird").
In consideration of the mutual covenants and
agreements contained in this Agreement, Baird and the Company agree as follows:
1. Definitions. For purposes of this Agreement, the
following terms will have the meanings set forth below:
(a) An "affiliate" of a person is another person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with that person. Baird's affiliates
are deemed to include (but are not limited to) the holders of shares identified
in Item 5 of Amendment No. 2 to Schedule 13D, dated May 17, 1989, signed by
Bridget B. Baird, individually and as successor trustee, Anne S. Baird, Jane D.
Baird, Brenda B. Senturia, Robert G. Wilmers, and The Cameron Baird Foundation;
such inclusion does not, however, constitute a representation or warranty by
Baird that he in fact controls, is controlled by, or is under common control
with any of such persons.
(b) "Control," when used with respect to any person,
means the power to direct the management or
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<PAGE> 2
policies of that person, either directly or indirectly, whether through the
ownership of voting securities, by contract, or otherwise.
(c) "Person" includes (but is not limited to) any
individual, corporation, company, partnership, joint venture, group,
organization, plan, trust, or other entity.
(d) "Voting securities" means securities entitled to
vote in the election of directors and securities convertible into, or
exchangeable or exercisable for, such securities.
2. Confidentiality. From and after the date of this
Agreement, Baird will hold in confidence and will not disclose to any person or
use, except as may be required for the discharge of his duties as a director of
the Company, any trade secrets or other confidential information about the
Company that may come to his knowledge, including but not limited to technical
data or "know how," financial information, information relating to customers
and suppliers, business plans and forecasts, and other information relating to
the Company's assets and operations. When Baird ceases to be a director of the
Company, he will forthwith deliver to the Company (i) all documents containing
such confidential information then in his possession and (ii) all other
material then in his
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<PAGE> 3
possession furnished to him by the Company in his capacity as a director.
3. Standstill. For the longer of (i) his tenure as a
Director of the Company and (ii) the seven year period following the date of
this Agreement, without the prior approval of a majority of the Company's Board
of Directors or except as required or authorized by the terms of this
Agreement, Baird will not, and will cause his affiliates not to:
(a) acquire, directly or indirectly, alone or
together with his affiliates, "beneficial ownership" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of more than 11% of the
voting securities of the Company then outstanding; except that, if the
beneficial ownership of voting securities by Baird and his affiliates exceeds
11% of the outstanding voting securities solely by reason of the purchase by
the Company of outstanding voting securities, Baird and his affiliates will not
be required to dispose of voting securities to reduce their beneficial
ownership to not more than 11% of the voting securities then outstanding;
(b) except for taking action as a director of the
Company, take action which, if effective, would result in Baird's or his
affiliates' ability to direct the management or policies of the Company;
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<PAGE> 4
(c) act jointly with any other person in the
acquisition of, holding of, or disposition of voting securities of the Company;
(d) "solicit" proxies in opposition to a majority of
the Company's Board of Directors with respect to voting securities of the
Company, or become a "participant" in opposition to a majority of the Company's
Board of Directors in an "election contest" relating to the election of
directors of the Company, as those terms are defined in Regulation 14 under the
Securities Exchange Act of 1934, as amended;
(e) initiate or propose any stockholder proposal
relating to the Company which is not supported by a majority of the Company's
Board of Directors, or induce or attempt to induce any other person to initiate
or propose any stockholder proposal relating to the Company which is not
supported by a majority of the Company's Board of Directors; or
(f) deposit any voting securities of the Company in
a voting trust or subject them to a voting agreement or other arrangement of
similar effect.
4. Sale of Voting Securities of the Company. For the
longer of (i) his tenure as a director of the Company and (ii) the seven year
period following the date of this Agreement, without the prior approval of a
majority of the Company's Board of Directors, Baird will
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<PAGE> 5
not, and will cause his affiliates not to, dispose of any voting securities of
the Company, except:
(a) pursuant to a tender offer approved or
recommended by the Company's Board of Directors;
(b) in open-market sales during any three month
period not exceeding 1% of the shares outstanding as shown by the most recent
Quarterly or Annual Report of the Company to the Securities and Exchange
Commission; provided, however, that a minimum of two years shall elapse between
the date of any acquisition and any sale; and further provided that no such
sale may be made to any person known by Baird or his affiliates to own at the
time of the sale 5% or more of the outstanding voting securities of any class
of the Company; or
(c) in a sale as to which the Company has been given
a right of first refusal in accordance with this Section 4(c). To make such a
sale, Baird or his affiliates, as the case may be, must notify the Company of
the person proposing to purchase the voting securities and the price and other
terms of the proposed sale. The Company will have 15 days following its
receipt of this notice to purchase the voting securities at the price and on
the other terms set forth in the notice. If the Company is not willing and
able to complete the purchase within the 15-day period, Baird or his
affiliates, as the case may be, may sell the voting securities to the person,
at the price,
-5-
<PAGE> 6
and on the other terms specified in the notice, provided that the sale is
completed within 60 days following the end of the 15-day period.
If Baird or one or more of his affiliates shall
desire to dispose of any voting securities of the Company and shall be
precluded from doing so by the terms of this Agreement, the Company shall
cooperate with Baird or such affiliate or affiliates in a good faith effort to
arrange a purchase of such voting securities by the Company or by a mutually
satisfactory third party or third parties upon mutually acceptable terms.
5. Voting of Voting Securities Beneficially Owned by
Baird and his Affiliates. For as long as he is a director, Baird will cause
voting securities entitling the holders to exercise at least 75% of the voting
power of all voting securities of the Company beneficially owned by him or by
his affiliates to be represented at all meetings of the stockholders of the
Company and will vote or cause to be voted all of those voting securities (a)
for the election as directors of the Company of the nominees of a majority of
the Company's Board of Directors and (b) in accordance with the recommendation
of a majority of the Company's Board of Directors in the election of Directors
of the Company. Within five days following the record date for the
determination of stockholders entitled to receive notice of and to vote at each
meeting of stockholders,
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<PAGE> 7
Baird shall provide the Company with a detailed list of the record and
beneficial ownership of all voting securities of the Company beneficially owned
by him or by his affiliates as of that date. Not less than seven days prior to
the meeting date, the Company shall notify Baird if Board of Directors proxies
have not been received with respect to voting securities entitled to exercise
at least 75% of the voting power of all such voting securities. The failure of
the Company to so notify Baird shall relieve him of his obligations under this
section.
6. Remedies. Baird agrees that he will, forthwith
upon the request of the Company's Board of Directors, resign as a director of
the Company in the event that he deliberately breaches any of his covenants in
this Agreement. Any such resignation will not terminate this Agreement or
preclude the Company or Baird from seeking any other remedies to which either
of them may be entitled by reason of the breach by the other party of any term
of this Agreement. Baird acknowledges that any breach of his covenants in this
Agreement would cause immediate and irreparable harm to the Company and,
therefore, consents to the entry, by a court of competent jurisdiction, of any
temporary, preliminary, or permanent injunction that would arrest or redress
any such breach. The inability of Baird to cause his affiliates to act in
accordance with the provisions of this Agreement, following diligent efforts to
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<PAGE> 8
cause them to do shall so, shall not result in personal liability to Baird
hereunder.
7. Election of Baird as a Director. Following the
execution and delivery of this Agreement, at the February 1990 meeting of the
Board of Directors, the Board of Directors of the Company shall elect Baird as
a Director of the Company. It is the intention of the Board of Directors to
nominate Baird for, and to solicit proxies upon election for, subsequent
successive terms as a Director of the Company ending not sooner than the Annual
Meeting of the Stockholders to be held in 1997. If the Board shall fail to do
so, or if Baird shall be removed as a Director by the Company, this Agreement
shall terminate. If Baird shall cease to serve as a Director by reason of his
resignation death or incapacity, this Agreement shall terminate upon the
expiration of both (i) one year following the date on which Baird ceases to
serve as a Director and (ii) two years following the date of this Agreement. A
termination under this section shall relieve Baird of all of his obligations
hereunder other than the obligations relating to confidentiality set forth in
Section 2.
8. Term. The initial term of this Agreement shall
commence on the date of this Agreement and end on the day that is seven years
following that date. Thereafter, the term of this Agreement shall be
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<PAGE> 9
automatically extended for successive terms of one year each unless either
party shall give written notice to the other not less than 60 days prior to the
end of the then current term of his or its desire that the term of this
Agreement not be extended beyond the end of the then current term, in which
event this Agreement shall automatically terminate at the end of that term.
9. Miscellaneous. This Agreement will be binding
upon the Company, its successors and assigns, and upon Baird,his assigns,
executors, administrators, or personal representatives; will be interpreted and
enforced in accordance with the laws of the State of Ohio; and represents the
entire understanding between the parties on its subject matter and supersedes
all prior understandings. If any provision of this Agreement is held to be
invalid, void, or unenforceable for any reason, the remaining provisions of
this Agreement will nevertheless continue to be in full force and effect.
IN WITNESS WHEREOF, the Company and Baird have
executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
OGLEBAY NORTON COMPANY
By /s/ Renold D. Thompson
---------------------------------
/s/ Brent D. Baird
----------------------------------
Brent D. Baird
</TABLE>
-9-
<PAGE> 1
Exhibit 10(c)
TRUST AGREEMENT
FOR
OGLEBAY NORTON COMPANY
INCENTIVE SAVINGS PLAN AND TRUST
(January 1, 1991 Restatement)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
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<S> <C> <C> <C>
I DEFINITIONS 3
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . . 8
II EMPLOYEE ELIGIBILITY AND PARTICIPATION 9
2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Election to Participate . . . . . . . . . . . . . . . . . . 9
2.3 Notification of Eligible
Employees . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Certification of New
Participants . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Service . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Changes in Employment Status . . . . . . . . . . . . . . . . 13
2.7 Reemployment of a Participant . . . . . . . . . . . . . . . 14
III CONTRIBUTIONS MADE BY OR ON BEHALF OF
PARTICIPANTS 16
3.1 Tax Deferred Compensation
Contributions . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Limitation on Tax Deferred
Compensation Contributions . . . . . . . . . . . . . . . . 16
3.3 Additional Limitation on
Tax Deferred Compensation
Contributions of Highly
Compensated Employees . . . . . . . . . . . . . . . . . . 17
3.4 Distribution of Excess
Contributions . . . . . . . . . . . . . . . . . . . . . . 19
3.5 Regular Participant Contri-
butions . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.6 Administration . . . . . . . . . . . . . . . . . . . . . . . 20
3.7 Changes in Contribution
Authorizations . . . . . . . . . . . . . . . . . . . . . . 21
3.8 Suspension of Contributions . . . . . . . . . . . . . . . . 21
3.9 Election Adjustments . . . . . . . . . . . . . . . . . . . . 22
3.10 Distribution of Excess
Deferrals . . . . . . . . . . . . . . . . . . . . . . . . 22
3.11 Overriding Limitation . . . . . . . . . . . . . . . . . . . 23
IV EMPLOYER CONTRIBUTIONS 24
4.1 Amount of Contributions . . . . . . . . . . . . . . . . . . 24
4.2 Payment of Contributions . . . . . . . . . . . . . . . . . . 24
4.3 General Limitation on
Contributions . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE PAGE
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<S> <C> <C>
IV 4.4 Finality of Determination . . . . . . . . . . . . . . . . . 25
4.5 Limitation on Employer Contri-
butions for Highly Compensated
Employees . . . . . . . . . . . . . . . . . . . . . . . . 25
4.6 Forfeiture or Distribution of
Excess Employer Contributions . . . . . . . . . . . . . . 27
4.7 Effect of Plan Termination . . . . . . . . . . . . . . . . . 28
V DEPOSIT AND INVESTMENT OF CONTRIBUTIONS 29
5.1 Deposit of Contributions . . . . . . . . . . . . . . . . . . 29
5.2 Investment of Employer Contri-
butions and Tax Deferred
Compensation Contributions . . . . . . . . . . . . . . . . 29
5.3 Election to Transfer Invested
Amounts . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.4 Election With Respect to the
Insured Fund . . . . . . . . . . . . . . . . . . . . . . 31
VI ESTABLISHMENT OF FUNDS AND
PARTICIPANTS' ACCOUNTS 33
6.1 Establishment of Funds . . . . . . . . . . . . . . . . . . . 33
6.2 Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . 33
6.3 Insured Fund . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 Income on Trust Funds . . . . . . . . . . . . . . . . . . . 35
6.6 Separate Accounts . . . . . . . . . . . . . . . . . . . . . 35
6.7 Distribution Accounts . . . . . . . . . . . . . . . . . . . 36
6.8 Administration . . . . . . . . . . . . . . . . . . . . . . . 36
6.9 Account Balances . . . . . . . . . . . . . . . . . . . . . . 36
VII ACCOUNTS: ALLOCATIONS, VALUATIONS,
AND LIMITATIONS 37
7.1 Allocation of Employer
Contributions . . . . . . . . . . . . . . . . . . . . . . 37
7.2 Valuation of Participant's
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.3 Finality of Trustee's
Determination . . . . . . . . . . . . . . . . . . . . . . 39
7.4 Limitation on Crediting of
Contributions . . . . . . . . . . . . . . . . . . . . . . 39
7.5 Notification . . . . . . . . . . . . . . . . . . . . . . . 44
VIII WITHDRAWALS WHILE EMPLOYED 45
8.1 Withdrawal of Regular
Participant Contributions . . . . . . . . . . . . . . . . 45
8.2 Withdrawal of Tax Deferred
Compensation Contributions . . . . . . . . . . . . . . . . 46
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
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VIII 8.3 Determination of Hardship . . . . . . . . . . . . . . . . . 47
8.4 Resumption of Contributions . . . . . . . . . . . . . . . . 50
IX TERMINATION OF PARTICIPATION AND
DISTRIBUTION 51
9.1 Termination of Participation . . . . . . . . . . . . . . . . 51
9.2 Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . 52
9.3 Transfer to Distribution
Account . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4 Years of Vested Service . . . . . . . . . . . . . . . . . . 54
9.5 Election of Former Schedule . . . . . . . . . . . . . . . . 54
9.6 Distribution . . . . . . . . . . . . . . . . . . . . . . . . 55
9.7 Limitation on Commencement of
Distribution . . . . . . . . . . . . . . . . . . . . . . . 56
9.8 Effect of Company's
Determination . . . . . . . . . . . . . . . . . . . . . . 57
9.9 Separate Distribution Funds . . . . . . . . . . . . . . . . 57
9.10 Reemployment of Former
Participant . . . . . . . . . . . . . . . . . . . . . . . 58
9.11 Restrictions on Alienation . . . . . . . . . . . . . . . . . 59
9.12 Facility of Payment . . . . . . . . . . . . . . . . . . . . 60
9.13 Disposition of Separate
Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.14 Recrediting of Forfeited
Amounts . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.15 Felonious Conduct of a
Participant . . . . . . . . . . . . . . . . . . . . . . . 62
9.16 Designation of Beneficiary . . . . . . . . . . . . . . . . . 63
9.17 Beneficiary in Absence of
a Designated Beneficiary . . . . . . . . . . . . . . . . . 64
9.18 Spousal Consent to Beneficiary
Designation . . . . . . . . . . . . . . . . . . . . . . . 64
9.19 Methods of Distribution in
Effect Prior to January 1,
1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
X ADMINISTRATION 66
10.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Action of Company . . . . . . . . . . . . . . . . . . . . . 67
10.3 Denial of Claims . . . . . . . . . . . . . . . . . . . . . . 67
10.4 Claims Review Procedure . . . . . . . . . . . . . . . . . . 68
10.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . 69
10.6 Qualified Domestic
Relations Orders . . . . . . . . . . . . . . . . . . . . . 70
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
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<S> <C> <C>
XI POWERS AND DUTIES OF THE TRUSTEE 71
11.1 Power and Duties . . . . . . . . . . . . . . . . . . . . . . 71
11.2 Trust Property and Investments . . . . . . . . . . . . . . . 71
11.3 Investment Guidelines . . . . . . . . . . . . . . . . . . . 74
11.4 Claims Against Trust . . . . . . . . . . . . . . . . . . . . 76
11.5 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.6 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . 76
11.7 Investment Manager . . . . . . . . . . . . . . . . . . . . . 77
11.8 Directions . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.9 Registration of Securities;
Nominees . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.10 Agents, Attorneys, Actuaries,
and Accountants . . . . . . . . . . . . . . . . . . . . . 79
11.11 Deposit of Funds . . . . . . . . . . . . . . . . . . . . . . 79
11.12 Legal Advice . . . . . . . . . . . . . . . . . . . . . . . . 80
11.13 Other Authority . . . . . . . . . . . . . . . . . . . . . . 80
11.14 Court Action Not Required . . . . . . . . . . . . . . . . . 80
11.15 Trustee's Performance . . . . . . . . . . . . . . . . . . . 80
11.16 Directions to the Trustee . . . . . . . . . . . . . . . . . 81
11.17 Payment of Taxes; Indemnity . . . . . . . . . . . . . . . . 81
11.18 Compensation and Expenses . . . . . . . . . . . . . . . . . 82
11.19 Apportionment of Expenses . . . . . . . . . . . . . . . . . 82
11.20 Records and Statements . . . . . . . . . . . . . . . . . . . 83
XII SUCCESSOR TRUSTEE 84
12.1 Resignation or Removal of the
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.2 Appointment of the Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 84
XIII AMENDMENT AND TERMINATION 86
13.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.2 Limitation on Amendment . . . . . . . . . . . . . . . . . . 86
13.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . 86
13.4 Withdrawal of an Employer . . . . . . . . . . . . . . . . . 88
13.5 Special Rules Relating to
Distribution Upon Ter-
mination of Plan or Dis-
position of Assets or
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 89
13.6 Corporation Reorganization . . . . . . . . . . . . . . . . . 90
XIV ADOPTION BY RELATED CORPORATIONS 92
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C> <C>
XV TOP-HEAVY PROVISIONS 93
15.1 Applicability . . . . . . . . . . . . . . . . . . . . . . . 93
15.2 Top-Heavy Definitions . . . . . . . . . . . . . . . . . . . 94
15.3 Accelerated Vesting . . . . . . . . . . . . . . . . . . . . 96
15.4 Minimum Employer Contribution . . . . . . . . . . . . . . . 96
15.5 Adjustments to Section 415
Limitations . . . . . . . . . . . . . . . . . . . . . . . 98
15.6 Compensation Taken Into Account . . . . . . . . . . . . . . 98
XVI ROLLOVERS 100
16.1 Rollover Contributions . . . . . . . . . . . . . . . . . . . 100
16.2 Administration . . . . . . . . . . . . . . . . . . . . . . . 100
16.3 Rollover Contributions not
Considered for Certain
Plan Purposes . . . . . . . . . . . . . . . . . . . . . . 101
16.4 Settlement or Termination . . . . . . . . . . . . . . . . . 101
XVII MISCELLANEOUS PROVISIONS 103
17.1 No Commitment as to Employment . . . . . . . . . . . . . . . 103
17.2 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 103
17.3 No Guarantees . . . . . . . . . . . . . . . . . . . . . . . 103
17.4 Precedent . . . . . . . . . . . . . . . . . . . . . . . . . 103
17.5 Duty to Furnish Information . . . . . . . . . . . . . . . . 103
17.6 Withholding . . . . . . . . . . . . . . . . . . . . . . . . 104
17.7 Merger, Consolidation, or
Transfer of Plan Assets . . . . . . . . . . . . . . . . . 104
17.8 Conditions and Limitations
on Employer Contributions . . . . . . . . . . . . . . . . 104
17.9 Return of Contributions
to Employer . . . . . . . . . . . . . . . . . . . . . . . 105
17.10 Back Pay Awards . . . . . . . . . . . . . . . . . . . . . . 106
17.11 Validity of Agreement . . . . . . . . . . . . . . . . . . . 108
17.12 Parties Bound . . . . . . . . . . . . . . . . . . . . . . . 108
</TABLE>
(v)
<PAGE> 7
TRUST AGREEMENT
FOR
OGLEBAY NORTON COMPANY
INCENTIVE SAVINGS PLAN AND TRUST
(January 1, 1991 Restatement)
THIS AGREEMENT, made and entered into at Cleveland,
Ohio, this day of , 1990, by and between OGLEBAY NORTON COMPANY,
a Delaware corporation, (hereinafter referred to as the "Company") and SOCIETY
NATIONAL BANK, of Cleveland, Ohio, a national banking association organized and
existing under the laws of the United States (hereinafter referred to as the
"Trustee"),
W I T N E S S E T H:
WHEREAS, by trust agreement dated December 31, 1959,
the Company established an incentive savings plan and trust for the exclusive
benefit of certain eligible employees and their beneficiaries; and
WHEREAS, said trust agreement was completely amended
and restated effective as of April 1, 1967, January 1, 1976, January 1, 1980,
January 1, 1983, January 1, 1985, and January 1, 1989; and
WHEREAS, it is desired to amend further and to
restate the terms, provisions, and conditions of said restated trust agreement;
NOW, THEREFORE, the parties agree that, effective as
of January 1, 1991, or such other date as may be expressly provided herein with
respect to a particular
<PAGE> 8
provision, said restated trust agreement is hereby amended and restated in its
entirety to provide as hereinafter set forth, and that the Trustee shall hold
all assets presently held by it and all funds and other property hereafter
contributed to it pursuant to the provisions hereof, together with all the
increments, proceeds, investments, and reinvestments thereof, in trust, for the
uses and purposes and upon the terms and conditions hereinafter set forth.
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ARTICLE I
DEFINITIONS
1.1 Definitions. The following words and phrases as
used herein shall have the following meanings, unless a different meaning is
plainly required by the context:
(a) The term "Act" shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to time.
Reference to a section of the Act shall include such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
(b) The term "Active Participant" shall mean a
Participant who, as of the time the determination is being made, is an
Employee and who currently has in effect an authorization with respect
to Tax Deferred Compensation Contributions as described in Section
2.2.
(c) The term "Agreement" shall mean this Trust
Agreement, including any amendment hereof.
(d) The term "Beneficiary" shall mean the person
who, in accordance with the provisions of Section 9.16, 9.17, and
9.18, is entitled to receive a distribution of a Participant's
interest, or portion thereof, under the Plan in the event a
Participant or former Participant dies before his entire interest
shall have been distributed to him.
(e) The term "Bond Fund" shall mean the common trust
fund established and maintained by the Trustee in conjunction with the
Plan pursuant to the provisions of Section 6.4.
(f) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time. Reference to a section of
the Code shall include such section and any comparable section or
sections of any future legislation
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that amends, supplements, or supersedes such section.
(g) The term "Company" shall mean Oglebay Norton
Company, a Delaware corporation, its corporate successors, and any
corporation into or with which it is merged or consolidated.
(h) The term "Compensation" shall mean the base
salary and compensation for overtime hours which is paid, or which
would have been paid except for the provisions of the Plan, during the
Plan Year to a Participant by an Employer for his services as an
Employee while he is a Participant; provided, however, that such term
shall exclude additional compensation, such as bonuses, commissions,
special vacation pay, and all noncash remuneration; provided, further,
that the Compensation of a Participant for a Plan Year shall not
include any amount in excess of $200,000 (adjusted for changes in the
cost of living as provided in Section 415(d) of the Code); and
provided, further, that for purposes of applying such dollar
limitation, the rules of Section 414(q)(6) of the Code requiring
aggregation of certain family members shall apply, except that in
applying such rules, the term "family" shall include only the spouse
of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year.
(i) The term "Distribution Account" shall mean any
of the accounts maintained by the Trustee in the name of a Participant
pursuant to the provisions of Section 6.7 which reflect his interest
in the Bond Fund, the Equity Fund, and the Insured Fund.
(j) The term "Eligibility Date" shall mean the
earliest date on which an Employee becomes an Eligible Employee in
accordance with the provisions of Article II.
(k) The term "Eligible Employee" shall mean an
Employee who is eligible to participate in the Plan in accordance with
the provisions of Article II.
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(l) The term "Employee" shall mean any common law
employee who is compensated on a salaried basis by the Company on its
Cleveland Office payroll or who is employed on a salaried basis by any
Employer other than the Company; provided, however, that the term
shall not include any person who renders service to an Employer solely
as a director or an independent contractor, any person covered by a
collective bargaining agreement, unless such agreement specifically
provides for coverage under the Plan, or any person who is a "leased
employee," as hereinafter defined. For purposes of this paragraph
(l), a "leased employee" shall mean any person who is not otherwise an
employee of an Employer and who provides services to the Employer that
are (i) performed on a substantially full-time basis for a period of
at least one year, (ii) performed pursuant to an agreement between the
Employer and a leasing organization, and (iii) of a type historically
performed by employees of the Employer.
(m) The term "Employer" shall mean the Company,
Central Silica Company, California Silica Products Company, or any
other corporation which adopts this Agreement as provided in Article
XIV.
(n) The term "Employer Contribution" shall mean the
amount which an Employer contributes to the Trust in accordance with
the provisions of Article IV.
(o) The term "Enrollment Date" shall mean each
January 1 and July 1 of each Plan Year.
(p) The term "Equity Fund" shall mean the common
trust fund established and maintained by the Trustee in conjunction
with the Plan pursuant to the provisions of Section 6.2.
(q) The term "Family Member" of an Employee shall
mean the Employee's spouse, his lineal ascendants, his lineal
descendants, and the spouses of such lineal ascendants and
descendants.
(r) The term "Highly Compensated Employee" shall
mean any Eligible Employee who is a
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"highly compensated employee" as defined in Section 414(q) of the Code.
(s) The term "Inactive Participant" shall mean a
Participant who, although continuing to participate in the Plan, is
not an Active Participant because he no longer has in effect an
authorization with respect to Tax Deferred Compensation Contributions
as described in Section 2.2.
(t) The term "Insured Fund" shall mean the common
trust fund established and maintained by the Trustee in conjunction
with the Plan pursuant to the provisions of Section 6.3.
(u) The term "Participant" shall mean an Eligible
Employee who elects to participate in the Plan in accordance with the
provisions of Article II and shall include an Employee who is
participating in the Plan either on an active or inactive basis.
(v) The term "Plan" shall mean the incentive savings
plan originally established by instrument dated December 31, 1959, as
currently embodied in this Agreement, and referred to as the "Oglebay
Norton Company Incentive Savings Plan."
(w) The term "Plan Administrator" shall mean the
Company which is the administrator for purposes of the Act and the
plan administrator for purposes of the Code.
(x) The term "Plan Year" shall mean the 12-month
period which begins on January l and ends on December 31 of each year.
(y) The term "Regular Participant Contribution"
shall mean the contributions made by a Participant and designated as
such in accordance with the provisions of the Plan as in effect prior
to January 1, 1991.
(z) The term "Related Corporation" shall mean any
corporation that is a member of the controlled group of corporations
of which an Employer is a member, as determined under Section 1563(a)
of the Code, without regard to
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Section 1563(a)(4) or Section 1563(e)(3)(C) of the Code; any trade or
business (whether or not incorporated) that is a member of a group
under common control with an Employer as determined under Section
414(c) of the Code; any organization that is a member of an affiliated
service group of which an Employer is also a member as determined
under Section 414(m) of the Code; and any entity which is required to
be aggregated with an Employer pursuant to regulations under Section
414(o) of the Code.
(aa) The term "Rollover Contribution" shall mean
with respect to a Participant the amount distributed from (i) a
qualified plan or (ii) a Participant's IRA that is attributable to a
distribution from a qualified plan, and transferred to the Plan by the
Participant in accordance with the provisions of Section 16.1.
(bb) The term "Separate Account" shall mean any of
the accounts maintained by the Trustee in the name of a Participant
pursuant to the provisions of Section 6.6 which reflects his interest
in the Bond Fund, the Equity Fund, and the Insured Fund.
(cc) The term "Tax Deferred Compensation
Contribution" shall mean the contributions made by an Employer on
behalf of a Participant in accordance with the provisions of Section
3.1 and a duly executed and filed compensation reduction
authorization.
(dd) The term "Trust" shall mean the trust
originally established by instrument dated December 31, 1959, as
currently maintained under this Agreement, and shall include the Bond
Fund, the Equity Fund, the Insured Fund, and any Separate Distribution
Fund, which trust is called the "Oglebay Norton Company Incentive
Savings Trust."
(ee) The term "Trustee" shall mean Society National
Bank or any successor trustee which at the time shall be designated,
qualified, and acting hereunder.
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(ff) The term "Valuation Date" shall mean the last
day of each month of each Plan Year.
1.2 Pronouns. The masculine pronoun wherever used
herein shall include the feminine in any case so requiring.
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ARTICLE II
EMPLOYEE ELIGIBILITY AND PARTICIPATION
2.1 Eligibility. Each Employee who was an Eligible
Employee on December 31, 1990, shall continue as an Eligible Employee
hereunder. Each other Employee shall become an Eligible Employee as of the
first January 1 or July 1 on which he is an Employee.
2.2 Election to Participate. Each Eligible Employee
who was a Participant in the Plan on December 31, 1990, shall continue as a
Participant hereunder. Each other Eligible Employee shall become a Participant
as of the first Enrollment Date coinciding with his Eligibility Date or any
subsequent Enrollment Date, if he timely files with the Company a written
election, on a form prescribed by the Company, which contains:
(a) his authorization for his Employer to reduce his
Compensation otherwise payable and to make Tax Deferred Compensation
Contributions on his behalf in accordance with the provisions of
Section 3.1; and
(b) his election as to the investment of his Tax
Deferred Compensation Contributions and Employer Contributions
allocable to his Separate Accounts in accordance with the provisions
of Section 5.2;
provided, however, that an Eligible Employee's election to become a Participant
under this Section 2.2 shall be timely only if received by his Employer such
number of days prior
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to the Enrollment Date as of which his participation is to become effective as
the Company shall require.
2.3 Notification of Eligible Employees. Within a
reasonable period prior to each Enrollment Date, the Company shall cause a
written notice of eligibility to be given to each Employee who is not then a
Participant, but who is an Eligible Employee or who would, if his employment
with an Employer continues, become an Eligible Employee before the next
succeeding Enrollment Date. Any Employee, whether or not so notified, may
apply to the Company for a determination as to his eligibility. Any Employee
making such an application shall be considered a Claimant within the meaning of
Section 10.4. The decision of the Company as to eligibility shall be binding
upon all affected persons.
2.4 Certification of New Participants. As soon as
practicable after each Enrollment Date, the Company shall notify the Trustee of
Eligible Employees becoming Participants on such date. Upon becoming a
Participant hereunder, an Eligible Employee shall become entitled to the
benefits under the Plan and shall be bound by all of the provisions of this
Agreement.
2.5 Service. Each person who is an employee of an
Employer or a Related Corporation on January 1, 1985, shall be credited with
service equal to
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the service with which he was credited under the Plan provisions in effect on
December 31, 1984. Each person who is an employee of an Employer or a Related
Corporation on or after January 1, 1985, shall be credited with service on and
after such date for each period (i) beginning on his service date (as defined
in paragraph (b) below), or his reemployment date (as defined in paragraph (d)
below), and (ii) ending on his next following severance date (as defined in
paragraph (c) below). For purposes of this Section 2.5 the following
provisions shall apply:
(a) An "hour of service" shall mean each hour for
which an employee is paid, or entitled to payment, with respect to the
performance of duties for an Employer or a Related Corporation.
(b) An employee's "service date" shall mean January
1, 1985, or the first date thereafter on which he completes an hour of
service under paragraph (a) above.
(c) An employee's "severance date" shall mean the
earlier of (i) the date on which his retirement, death, or other
termination of employment occurs, (ii) the second anniversary of the
first date on which an employee is absent from employment with an
Employer or a Related Corporation for maternity or paternity reasons,
or (iii) the first anniversary of the first date of a period in which
he remains absent from employment with an Employer or a Related
Corporation for any other reason; provided, however, that if he is
absent from employment due to illness, injury, or layoff or on an
approved leave of absence, he shall not incur a severance date by
reason of such absence if he returns to employment at the conclusion
of such illness, injury, layoff, or approved leave of absence; and
provided, further, that if he is absent from employment while on
active service in the Armed
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Service of the United States, his severance date shall be the date on
which he was first so absent unless he returns to employment with an
Employer or a Related Corporation during the period during which he
retains reemployment rights pursuant to federal law. For purposes of
this paragraph, an absence from employment for maternity or paternity
reasons shall mean an absence due to (i) the pregnancy of the
employee, (ii) the birth of a child of the employee, (iii) the
placement of a child with the employee in connection with the adoption
of such child by the Employee, or (iv) the caring of such child for a
period beginning immediately following such birth or placement.
Notwithstanding the foregoing, however, if any employee retires or
dies or his employment otherwise is terminated during a period of his
absence from employment for any reason other than retirement or
termination, his severance date shall be the date of such retirement,
death, or other termination of employment.
(d) An employee's "reemployment date" shall mean the
first date on which he again completes an hour of service after a
severance date.
(e) If an employee's reemployment date occurs within
12 months after the earlier of (i) his immediately preceding severance
date, or (ii) the first date of a period in which he remains absent
from employment with an Employer or a Related Corporation for any
reason, he shall receive service credit for the period of absence
preceding such reemployment date if he otherwise does not receive
service credit for such absence under the foregoing provisions of this
Section 2.5.
(f) If after a severance date occurs with respect to
a person who is an employee the provisions of paragraph (e) above do
not apply, and if his reemployment date occurs on or after January 1,
1985, he shall forfeit his service credited with respect to the period
ending on such severance date, and such forfeited service shall be
reinstated upon his next following reemployment date:
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(i) if the period between such severance date and
such reemployment date is less than five years, or
(ii) if his previously forfeited service is greater
than the periods computed to the nearest 1/12th year,
beginning on his most recent severance date and ending on such
reemployment date, or
(iii) if he had a nonforfeitable right to any
portion of his Separate Account balances derived from Employer
contributions on such severance date.
(g) An employee's service as determined under this
Section 2.5 shall be aggregated and computed to the nearest 1/12th
year of service.
(h) For purposes of this Section 2.5, "employee"
shall mean any person who is a common law employee and any person who
is a leased employee, as defined in paragraph (l) of Section 1.1, with
respect to an Employer or a Related Corporation.
2.6 Changes in Employment Status. If a Participant
ceases to be an Employee but continues in the employment of (i) an Employer in
some other capacity, or (ii) a Related Corporation, he shall, as of the date of
such change in status, cease to be an Active Participant and shall become an
Inactive Participant until his participation is otherwise terminated in
accordance with the provisions of the Plan. If such Inactive Participant shall
make a withdrawal under Section 8.1 and/or 8.2 which causes his Tax Deferred
Compensation Contributions to be suspended, any authorization for reduction of
Compensation
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theretofore in effect with respect to him shall be automatically revoked;
otherwise, any such authorization shall continue in effect despite his change
in status (although no reduction shall be made while he remains inactive).
Such Inactive Participant shall again become an Active Participant immediately
upon his transfer to a position as an Employee unless, in the interim, any such
authorization has been revoked, in which event he shall remain an Inactive
Participant until his participation terminates or until he resumes active
participation as provided in Section 8.4. No Inactive Participant shall be
permitted to have contributions made on his behalf to the Plan at any time
during which he is employed in any capacity other than as an Employee.
Moreover, if a person is transferred directly from employment (i) with an
Employer in a capacity other than as an Employee, or (ii) with a Related
Corporation, to employment as an Employee, his service with such Employer or
such Related Corporation shall be included in determining his eligibility under
Section 2.l.
2.7 Reemployment of a Participant. Subject to the
provisions of Section 2.5, if a retired or former Participant is reemployed by
an Employer or a Related Corporation after he incurs a settlement date under
Section 9.1, he shall again become a Participant on the date
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he is reemployed by an Employer and files his authorization in accordance with
the provisions of Section 2.2, unless he is not reemployed as an Employee, in
which event he shall again become a Participant on the first date thereafter on
which he becomes an Employee and files such authorization.
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ARTICLE III
CONTRIBUTIONS MADE BY OR ON BEHALF OF PARTICIPANTS
3.1 Tax Deferred Compensation Contributions.
Commencing with the Enrollment Date as of which an Eligible Employee becomes a
Participant, each Participant may elect to have Tax Deferred Compensation
Contributions made to the Plan on his behalf by his Employer which shall be an
integral percentage of his Compensation of not less than one percent nor more
than six percent. In the event a Participant so elects to have his Employer
make Tax Deferred Compensation Contributions, his Compensation otherwise
payable shall be reduced by the percentage he elects to have contributed on his
behalf to the Plan in accordance with the terms of the authorization in effect
pursuant to Section 2.2 or pursuant to Section 3.7.
3.2 Limitation on Tax Deferred Compensation
Contributions. Notwithstanding any other provision of this Article III, in no
event shall the Tax Deferred Compensation Contributions made on a Participant's
behalf during a Participant's taxable year, when aggregated with any elective
contributions made on behalf of the Participant under any other plan of an
Employer or a Related Corporation for such taxable year, exceed $7,000 (or such
adjusted amount established by the Secretary of the Treasury pursuant to
Section 402(g)(5) of the Code). In the event that
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the Company determines that a contribution election by a Participant will
result in his exceeding the annual limitation described above, the Company
shall adjust the reduction authorization of such Participant by reducing his
Tax Deferred Compensation Contribution percentage to such smaller percentage or
amount that will result in the annual limitation not being exceeded.
3.3 Additional Limitation on Tax Deferred
Compensation Contributions of Highly Compensated Employees. Notwithstanding
anything to the contrary contained in this Agreement, no Tax Deferred
Compensation Contributions made with respect to a Plan Year on behalf of Highly
Compensated Employees shall result in an average deferral percentage for Highly
Compensated Employees that exceeds the greater of:
(a) a percentage that is equal to 125 percent of the
average deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent
of the average deferral percentage for all other Eligible Employees
and that is not more than two percentage points higher than the
average deferral percentage for all other Eligible Employees.
The Company may adjust as required the deferral percentage of Highly
Compensated Employees by reducing such percentage in order, beginning with the
highest of such percentages, to such smaller percentages that will result in
the limits set forth above not being exceeded. The Company shall then
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adjust the Compensation reduction authorizations of affected Highly Compensated
Employees to reflect the adjustment to their deferral percentages. For
purposes of this Section 3.3 and Section 4.5, the following terms shall have
the following meanings:
(c) The term "compensation" means compensation as
defined in Section 414(s) of the Code, including any amount
contributed by an Employer pursuant to a salary reduction agreement
that is not includable in the gross income of an Employee under
Section 125, 402(a)(8), 402(h), or 403(b) of the Code.
(d) The "deferral percentage" of an Employee is the
ratio of the sum of his Tax Deferred Compensation Contributions with
respect to the Plan Year to his compensation for such Plan Year.
For the purposes of applying the limitation contained in this Section 3.3, the
Tax Deferred Compensation Contributions and compensation of any Eligible
Employee who is a Family Member of any Highly Compensated Employee who (i) is a
five percent owner or (ii) is among the ten Highly Compensated Employees
receiving the greatest compensation for the Plan Year shall be aggregated with
the Tax Deferred Compensation Contributions and compensation of such Highly
Compensated Employee, and such Family Member shall not be considered an
Eligible Employee for purposes of determining the average deferral percentage
for all other Eligible Employees.
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3.4 Distribution of Excess Contributions.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that the limitation contained in Section 3.3 of the Plan is exceeded in
any Plan Year, the excess Tax Deferred Compensation Contributions with respect
to a Highly Compensated Employee, plus any income and minus any losses
attributable thereto, shall be distributed to the Highly Compensated Employee
prior to the end of the succeeding Plan Year. Moreover, to the extent any
Employer Contribution would be allocable based upon such excess amount in
accordance with the provisions of Section 7.1, such Employer Contribution shall
be deemed a forfeiture for the Plan Year in which such excess Tax Deferred
Compensation Contributions are distributed hereunder and shall be applied
against the Employer Contribution obligation as described in Section 9.13. For
purposes of this Section 3.4, "excess Tax Deferred Compensation Contributions"
with respect to a Highly Compensated Employee means the excess of the Tax
Deferred Compensation Contributions made on his behalf over the maximum amount
permitted to be contributed on his behalf under Section 3.3, determined by
reducing Tax Deferred Compensation Contributions of Highly Compensated
Employees in order of their deferral percentages beginning with the highest of
such percentages. The amount of excess Tax Deferred Compensation Contributions
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for a Plan Year shall be reduced by any excess deferrals as defined in Section
3.10 previously distributed to the Highly Compensated Employee for the Highly
Compensated Employee's taxable year ending with or within the Plan Year.
3.5 Regular Participant Contributions. Prior to
January 1, 1991, Participants were permitted to make Regular Participant
Contributions to the Plan in accordance with provisions from time to time in
effect. Such amounts shall continue to be held under the Plan and administered
in accordance with the provisions of this Agreement and the provisions of the
Plan as in effect on December 31, 1990 relating to the determination and
disposition of "excess Employer Contributions and Regular Participant
Contributions."
3.6 Administration. The Company shall cause to be
delivered to the Trustee all Tax Deferred Compensation Contributions made in
accordance with the provisions of Section 3.1 as of the earliest date on which
such contributions can be reasonably segregated from the Employer's general
assets, but not later than the 30th day of the next succeeding calendar month
after such Tax Deferred Compensation Contributions are made. Subject to the
provisions of Article VII, the Trustee shall credit the amount of Tax Deferred
Compensation Contributions of each
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Participant for each calendar month, which are received by it, to the
Participant's Separate Accounts in accordance with the provisions of Section
5.2, as of the last day of the calendar month for which they are made.
3.7 Changes in Contribution Authorizations. Any
Participant may change the percentage of his Compensation which he causes to be
contributed on his behalf as Tax Deferred Compensation Contributions effective
as of any Enrollment Date by filing an amended Compensation reduction
authorization with the Company such number of days prior to such Enrollment
Date as the Company shall require; provided, however, that he shall be limited
to selecting an integral percentage of his Compensation of not less than one
percent nor more than six percent.
3.8 Suspension of Contributions. Any Participant
who is making contributions under Section 3.1 may suspend such contributions at
any time by giving such number of days' advance written notice to the Company
as it shall require. Any such suspension shall take effect beginning with the
first payment of Compensation to such Participant following the expiration of
the required notice period and shall remain in effect until contributions are
resumed as hereinafter set forth. Any Participant who has suspended his Tax
Deferred Compensation Contributions in accordance with the foregoing provisions
of this
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Section 3.8 may resume such contributions pursuant to the limitations of
Section 3.7 as of any subsequent Enrollment Date by filing a written notice to
such effect with the Company such number of days prior to the Enrollment Date
as of which such contributions are to be resumed as the Company shall require.
3.9 Election Adjustments. Notwithstanding any other
provision to the contrary contained in this Agreement, in the event any Tax
Deferred Compensation Contributions made on behalf of a Participant, when
aggregated with Employer Contributions allocated to him, would exceed the
limitations set forth in Section 7.4, the election made by a Participant
pursuant to Section 2.2 shall be adjusted prospectively in accordance with
procedures adopted by the Company in such a manner so as to prevent such limits
from being exceeded.
3.10 Distribution of Excess Deferrals.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that a Participant notifies the Company in writing and in accordance with
the Company's rules regarding such notification that excess deferrals have been
made on his behalf under the Plan for a taxable year, such excess amounts, plus
any income and minus any losses attributable thereto, shall be distributed to
the Participant no later than the April 15 immediately
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following such taxable year. For purposes of this Section 3.10, "excess
deferrals" means that portion of a Participant's Tax Deferred Compensation
Contributions that, when added to amounts deferred under other plans or
arrangements described in Section 401(k), 408(k), or 403(b) of the Code, would
exceed the limit imposed on the Participant under Section 402(g) of the Code
for the calendar year in which the Tax Deferred Compensation Contributions were
made. The amount of excess deferrals for a taxable year under this Section
3.10 shall be reduced by any excess Tax Deferred Compensation Contributions as
defined in Section 3.4 previously distributed with respect to the Participant
for the Plan Year beginning with or within such calendar year.
3.11 Overriding Limitation. Notwithstanding anything
to the contrary contained in this Agreement, the value of any Separate Accounts
attributable to contributions made by or on behalf of a Participant shall be
fully vested in such Participant, and the forfeiture provisions contained in
this Agreement shall not apply to them.
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ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 Amount of Contributions. The Employer
Contribution for each calendar month shall be an amount, subject to reduction
by the amount of any forfeitures as provided in Section 9.13, equal to 50
percent of the total of the eligible Tax Deferred Compensation Contributions
made on behalf of Participants for such calendar month. An "eligible Tax
Deferred Compensation Contribution" means a Tax Deferred Compensation
Contribution in an amount up to, but not exceeding, four percent of a
Participant's Compensation for such calendar month. Employer Contributions and
Tax Deferred Compensation Contributions shall not exceed the limitation
specified in Section 4.3.
4.2 Payment of Contributions. Employer
Contributions made pursuant to Section 4.1 shall be paid to the Trustee not
later than the 30th day of the next succeeding calendar month and upon receipt
thereof the Trustee shall deposit the same in accordance with the provisions of
Section 5.1. Notwithstanding the foregoing, the Employer Contribution and any
Tax Deferred Compensation Contributions for any month, regardless of when
actually paid, shall for all purposes of this Agreement be deemed to have been
made on the last day of such month.
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4.3 General Limitation on Contributions.
Notwithstanding anything to the contrary contained in this Agreement, the
contribution of each Employer for any Plan Year shall in no event exceed (i)
the maximum amount which will constitute an allowable deduction for such Plan
Year to such Employer under Section 404 of the Code, (ii) the maximum amount
which may be contributed by such Employer under Section 415 of the Code, or
(iii) the maximum amount which may be contributed pursuant to any wage
stabilization law, or any regulation, ruling, or order issued pursuant to law.
4.4 Finality of Determination. The Company shall
have exclusive responsibility with respect to determining the amount of the
Employer Contributions and, upon determining such amount with respect to a Plan
Year, shall transmit to the Trustee a written statement of the amount of such
contribution from an authorized officer of the Company. A determination so
made and certified shall be final and conclusive upon the Employers, the
Trustee, and all Participants, former Participants, and Beneficiaries.
4.5 Limitation on Employer Contributions for Highly
Compensated Employees. Notwithstanding anything to the contrary contained in
this Agreement, no Employer Contributions made with respect to a Plan Year on
behalf of
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Highly Compensated Employees shall result in an average contribution percentage
for Highly Compensated Employees that exceeds the greater of:
(a) a percentage that is equal to 125 percent of the
average contribution percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent
of the average contribution percentage for all other Eligible
Employees and that is not more than two percentage points higher than
the average contribution percentage for all other Eligible Employees;
provided, however, that, to the extent required by regulations of the
Secretary of the Treasury, the alternative limitation contained in
this paragraph (b) shall not be used for purposes of this Section 4.5
in any Plan Year with respect to which the Employer uses paragraph (b)
of Section 3.3 to meet the deferral percentage limitations specified
therein.
For purposes of this Section 4.5, the "contribution percentage" of an Employee
for a Plan Year is the ratio of the Employer Contributions made on his behalf
for the Plan Year to his compensation for such Plan Year, except that, to the
extent permitted by regulations promulgated by the Secretary of the Treasury,
the Company may elect to take into account in computing the numerator of each
Eligible Employee's contribution percentage the Tax Deferred Compensation
Contributions made on his behalf for the Plan Year. For purposes of applying
the limitations contained in this Section 4.5, the Employer Contributions and
compensation of any Eligible Employee who is a Family Member of a Highly
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Compensated Employee who (i) is a five percent owner or (ii) is among the ten
Highly Compensated Employees receiving the greatest compensation for the Plan
Year shall be aggregated with the Employer Contributions and compensation of
such Highly Compensated Employee, and such Family Member shall not be
considered an Eligible Employee for purposes of determining the average
contribution percentage for all other Eligible Employees.
4.6 Forfeiture or Distribution of Excess Employer
Contributions. Notwithstanding anything to the contrary contained in this
Agreement, in the event that the limitation contained in Section 4.5 is
exceeded in any Plan Year, the excess Employer Contributions with respect to a
Highly Compensated Employee, plus any income and minus any losses attributable
thereto, shall be forfeited or distributed prior to the end of the succeeding
Plan Year as hereinafter provided in the same proportion as the Highly
Compensated Employee's forfeitable and vested interest in his Separate Accounts
to which such contributions have been credited. Any amounts forfeited pursuant
to this Section 4.6 for a Plan Year shall be applied against the Employer
Contribution obligation for the month in which the forfeiture occurs. For
purposes of this Section 4.6, "excess Employer Contributions" with respect to a
Highly Compensated Employee means the excess of the Employer
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Contributions allocated to his Separate Accounts over the maximum amount
permitted to be contributed on his behalf under Section 4.5, determined by
reducing Employer Contributions made on behalf of Highly Compensated Employees
in order of their contribution percentages beginning with the highest of such
percentages. The determination of the amount of excess Employer Contributions
shall be made after application of Section 3.4, if applicable, and after
application of Section 3.10, if applicable.
4.7 Effect of Plan Termination. Notwithstanding
anything to the contrary contained in this Agreement, the termination of the
Plan shall terminate the liability of the Employers to make further
contributions hereunder, other than contributions for any Plan Year ended prior
to the time of such termination.
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ARTICLE V
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
5.1 Deposit of Contributions. All Employer
Contributions, Tax Deferred Compensation Contributions, and Rollover
Contributions shall be deposited by the Trustee in the Equity Fund, the Insured
Fund, or the Bond Fund in accordance with directions received from the Company;
provided, however, that the Company's directions shall be based upon the
investment election of each Participant made in accordance with the provisions
of Sections 2.2 and 5.2. For all purposes hereunder, contributions with
respect to a month shall be deemed to have been deposited as of the last day of
such month. The Trustee shall have no duty to collect or enforce payment of
contributions or inquire into the amount or method used in determining the
amount of contributions, and shall be accountable only for contributions
received by it.
5.2 Investment of Employer Contributions and Tax
Deferred Compensation Contributions. Each Participant, upon electing to become
a Participant under the Plan in accordance with the provisions of Section 2.2,
shall make an investment election directing the manner in which his Tax
Deferred Compensation Contributions and Employer Contributions allocable to his
Separate Accounts shall be deposited and held by the Trustee. In the event the
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Participant elects to make a Rollover Contribution in accordance with Article
XVI, he shall also make an investment election directing the manner in which
such Rollover Contribution shall be deposited and held by the Trustee. The
investment election of a Participant shall specify, in increments of ten
percent, a combination which in the aggregate equals 100 percent selected from
among the Equity Fund, the Insured Fund, and the Bond Fund. If a Participant
makes no investment election or does not direct the investment of 100 percent
of the Tax Deferred Compensation Contributions and Employer Contributions made
on his behalf and any Rollover Contribution, such amounts shall be deposited in
the Bond Fund. The investment option so elected by a Participant shall remain
in effect until he ceases to be a Participant in accordance with the provisions
of this Agreement; provided, however, that a Participant may change his
investment election effective as of any Enrollment Date by filing with the
Company, such number of days prior to such Enrollment Date as the Company shall
require, a written election directing a change in his investment election. Any
such change shall not affect the amounts credited to any Separate Accounts of
such Participant as of any date prior to the Enrollment Date on which such
change is to become effective.
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5.3 Election to Transfer Invested Amounts. A
Participant or former Participant who has attained age 60 or completed 25 years
of service may elect at any time to have the entire balances of his Separate
Accounts or Distribution Accounts, as the case may be, which are invested in
the Equity Fund and the Bond Fund transferred from such Funds to the Insured
Fund and to have his Separate Accounts or Distribution Accounts, as the case
may be, reflect such transfer. Any such election shall be effective as of the
first Enrollment Date of a Plan Year or as soon thereafter as administratively
practicable, and shall be made in writing delivered to the Company such number
of days prior to such Enrollment Date and in such form and manner as the
Company shall require. Upon receipt of written directions from the Company,
the Trustee shall cause such amounts to be so transferred. The provisions of
this Section 5.3 shall be effective with respect to Participants and former
Participants meeting the requirements set forth herein on or after January 1,
1990, with respect to Enrollment Dates occurring on the first day of a Plan
Year on or after January 1, 1991.
5.4 Election With Respect to the Insured Fund.
Notwithstanding any other provision contained in this Agreement, each
Participant or former Participant who made an investment election prior to
December 31, 1990
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directing all or a portion of his Tax Deferred Compensation Contributions,
Regular Participant Contributions, and Employer Contributions, if applicable,
to be invested in a guaranteed investment contract held in the Insured Fund may
elect subsequently to transfer to any other Fund the amounts in his Separate
Accounts in the Insured Fund attributable to such insurance contract upon its
maturity. In the event such a Participant does not make such election, such
amounts shall be reinvested in the Insured Fund.
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ARTICLE VI
ESTABLISHMENT OF FUNDS AND PARTICIPANTS' ACCOUNTS
6.1 Establishment of Funds. The Trustee shall
establish and maintain three funds hereunder, the Equity Fund, the Insured
Fund, and the Bond Fund (formerly referred to as the "Fixed Income Fund"),
which shall be invested, respectively, in accordance with the provisions of
Sections 6.2, 6.3, and 6.4; provided, however, that investment may in each case
be made through investment in participating shares or interests in a fund
maintained under a master trust for plans of the Company and its affiliates,
provided that investments in such fund consist primarily of the type of
investments specified herein with respect to each. Each fund maintained
hereunder shall be held and administered by the Trustee as a separate common
trust fund.
6.2 Equity Fund. Up to 50 percent of the assets of
the Equity Fund may be invested in common stock of the Company with the
remaining assets of such Fund invested, in the Trustee's discretion, (a) in
common stocks and other securities, which are convertible into common stocks,
of issuers other than the Company, or (b) in participating shares or interests
in any common or collective trust or investment funds established or operated
by the Trustee or others or shares in investment companies,
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provided that the types of investments held in such funds or companies consist
primarily of the type of investments specified in clause (a) of this sentence.
6.3 Insured Fund. The assets of the Insured Fund
shall be invested by the Trustee (a) primarily under an insurance contract or
contracts which provide for a guaranteed rate of return with respect to such
investment or in United States Government securities the income from which is
fixed or determinable in advance, or (b) in participating shares or interests
in any common or collective trust or investment funds established or operated
by the Trustee or others or shares in investment companies, provided that the
types of investments held in such funds or companies consist primarily of the
type of investments specified in clause (a) of this sentence.
6.4 Bond Fund. The assets of the Bond Fund shall be
invested, in the Trustee's discretion, (a) in such bonds, notes, debentures,
mortgages, preferred stocks, equipment trust certificates, investment trust
certificates, certificates of indebtedness, acceptances, bills of exchange,
Treasury bills, savings bank deposits, commercial paper, personal property
wherever situated and any other property (other than real property), or
securities, domestic or foreign, from which the return is fixed, limited, or
determinable in advance; provided, however, that such
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investments shall be of issuers other than the Company, or (b) in participating
shares or interests in any common or collective trust or investment funds
established or operated by the Trustee or others or shares in investment
companies, provided that the types of investments held in such funds or
companies consist primarily of the type of investments specified in clause (a)
of this sentence.
6.5 Income on Trust Funds. Any dividends, interest,
distributions, or other income received by the Trustee in respect of the Equity
Fund, the Insured Fund, or the Bond Fund shall be reinvested by the Trustee in
the Fund in respect of which such income was received by it.
6.6 Separate Accounts. Each Participant shall have
established in his name a Separate Account within each Fund to reflect (i) his
Tax Deferred Compensation Contributions deposited in such Fund and the earnings
and losses attributable to such amounts; (ii) his share of Employer
Contributions deposited in such Fund and the earnings and losses attributable
to such amounts; (iii) his Regular Participant Contributions deposited in such
Fund and the earnings and losses attributable to such amounts; and (iv) his
Rollover Contributions deposited in such Fund and the earnings and losses
attributable to such amounts. The Company shall cause each such Separate
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Account to be maintained and administered for each Participant in accordance
with the provisions of this Agreement.
6.7 Distribution Accounts. As of a Participant's
Settlement Date (as determined in accordance with the provisions of Section
9.1) there shall be established Distribution Accounts in his name that
correspond to the Separate Accounts maintained by the Trustee on the
Participant's behalf to reflect his interest in the Trust that is subject
to distribution under the terms of this Agreement. The Trustee shall cause the
Distribution Accounts to be maintained and administered in accordance with the
provisions of this Agreement.
6.8 Administration. After receiving Tax Deferred
Compensation Contributions and Employer Contributions for a month pursuant to
Section 5.1, the Trustee shall acknowledge the amount of contributions received
by it for such month.
6.9 Account Balances. For all purposes of this
Agreement, the balance of each Separate Account of a Participant as of any date
shall be the balance of such account after all credits and charges thereto, for
and as of such date have been made as provided in this Agreement.
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ARTICLE VII
ACCOUNTS: ALLOCATIONS, VALUATIONS, AND LIMITATIONS
7.1 Allocation of Employer Contributions. The
Employer Contribution made pursuant to Section 4.1 for each calendar month
shall be allocated as of the last day of such month among Participants who are
employees of such Employer or a Related Corporation during such month and who
had made on their behalf Tax Deferred Compensation Contributions for such
month, in an amount for each such Participant equal to 50 percent of the
eligible Tax Deferred Compensation Contributions not in excess of four percent
of such Participant's Compensation (as described in Section 4.1) contributed to
the Plan on his behalf for such month. Subject to the other provisions of this
Article VII, the Trustee shall credit the amount of each Participant's
allocated share of the Employer Contribution for such month which is received
by it to the Participant's appropriate Separate Accounts as of the last day of
such month.
7.2 Valuation of Participant's Interest. As of each
Valuation Date, the Trustee shall adjust the Separate Accounts and the
Distribution Accounts of each Participant and former Participant to reflect any
increase or decrease in net worth of the Funds hereunder since the immediately
preceding Valuation Date, based on the
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valuation of each Fund by the Trustee, all in the following manner:
(a) The Trustee shall value all of the assets of
each of the Funds at fair market value.
(b) The Trustee shall then, on the basis of the
valuation provided under paragraph (a) of this Section 7.2, and after
making appropriate adjustments for the amount of all contributions
made with respect to the month in which such Valuation Date occurs and
for any distributions and withdrawals from the respective Funds since
the immediately preceding Valuation Date and prior to such date,
ascertain the net increase or decrease in net worth of the respective
Funds which is attributable to net earnings and all profits and
losses, realized and unrealized, since the immediately preceding
Valuation Date.
(c) The Trustee shall then allocate the net increase
or decrease in the net worth of the respective Funds as thus
determined among all Participants, former Participants, and
Beneficiaries who have an interest in the respective Funds, separately
with respect to each of such Funds, in the ratio that the balance of
each Separate Account and Distribution Account maintained under such
Fund on the day immediately preceding such Valuation Date bears to the
aggregate of the balances of all such accounts on the day immediately
preceding such Valuation Date, and shall credit or charge, as the case
may be, each such Separate Account and Distribution Account with the
amount of its allocated share.
(d) The Trustee then shall credit to the appropriate
Separate Accounts of each Participant, in accordance with the
provisions of Section 3.6, his Tax Deferred Compensation Contributions
for the month in which such Valuation Date occurs.
(e) The Trustee shall then credit to the appropriate
Separate Accounts of each Participant the portion of the Employer
Contribution for the month in which such Valuation Date occurs
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which is allocated to such Participant pursuant to Section 7.1.
7.3 Finality of Trustee's Determination. The
Trustee shall have exclusive responsibility for determining the net income,
liabilities, and value of the assets of the Funds hereunder. The Trustee's
determination thereof shall be conclusive upon the Employers, the Company, and
all Participants, former Participants, and Beneficiaries hereunder.
7.4 Limitation on Crediting of Contributions.
Notwithstanding anything to the contrary contained in this Agreement, the
amount of Employer Contributions and Tax Deferred Compensation Contributions
which may be credited to the Separate Accounts of Participants shall be subject
to the following provisions:
(a) For purposes of this Section 7.4, the annual
addition with respect to a Participant shall mean the sum for any
limitation year of the following amounts:
(i) Employer Contributions which are credited to a
Separate Account of such Participant for such limitation year;
(ii) Tax Deferred Compensation Contributions which
are credited to a Separate Account of such Participant for
such limitation year;
(iii) a portion of such Participant's employee
contributions under any qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a
Related Corporation
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which are credited to a separate account of such Participant
for such limitation year, determined as follows:
(1) For limitation years ending prior to January 1,
1987, the lesser of
(A) the amount of such contributions in excess of
six percent of such Participant's compensation paid for
such limitation year; or
(B) one-half of such contributions for such
limitation year; and
(2) For limitation years ending after December 31,
1986, the entire amount of such Participant's contributions
for such limitation year;
(iv) the amount, if any, of contributions as
provided in subparagraphs (i) and (ii) above and forfeitures
which are credited to the Participant under any other defined
contribution plan (whether or not terminated) maintained by an
Employer or a Related Corporation concurrently with the Plan;
and
(v) the amount, if any, attributable to medical
benefits allocated to an account for such Participant
established under Section 419A(d)(1) of the Code for such
limitation year.
(b) For purposes of this Section 7.4, a "limitation
year" shall mean each 12-month period beginning each January 1 and
terminating each subsequent December 31 and the "compensation" of a
Participant shall mean his wages, salaries, and other amounts received
for personal services actually rendered in the course of employment
with an Employer or a Related Corporation, excluding, however, (i)
contributions made by an Employer or a Related Corporation to a
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plan of deferred compensation to the extent that, before the
application of the limitations of Section 415 of the Code to such
plan, the contributions are not includable in the gross income of the
Participant for the taxable year in which contributed, (ii)
contributions made by an Employer or a Related Corporation on his
behalf to a simplified employee pension described in Section 408(k) of
the Code, (iii) any distributions from a plan of deferred compensation
(other than amounts received pursuant to an unfunded non-qualified
plan in the year such amounts are includable in the gross income of
the Participant), (iv) amounts received from the exercise of a
non-qualified stock option or when restricted stock or other property
held by the Participant becomes freely transferable or is no longer
subject to substantial risk of forfeiture, (v) amounts received from
the sale, exchange, or other disposition of stock acquired under a
qualified stock option, (vi) any other amounts that receive special
tax benefits, such as premiums for group term life insurance (but only
to the extent that the premiums are not includable in gross income of
the Participant), (vii) any contribution for medical benefits (within
the meaning of Section 419A(f) of the Code) after separation from
service that is otherwise treated as an annual addition; and (viii)
any amount otherwise treated as an annual addition under Section
415(l)(1) of the Code.
(c) For each limitation year, the annual addition
with respect to a Participant shall not exceed the lesser of (i)
$30,000 (subject to adjustment annually pursuant to Internal Revenue
Service rulings and regulations under Section 415 of the Code), or
(ii) 25 percent of such Participant's compensation paid for such
limitation year. If the annual addition to the Separate Accounts of a
Participant in any limitation year would exceed the limitation
contained in this Section 7.4 absent such limitation and if paragraph
(e) is not applicable, the portion of the Employer Contribution which
would be allocated to such Participant under Section 7.1, but which
would exceed the limitation herein, shall be deemed a forfeiture for
such limitation year and shall be held unallocated in a suspense
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account established with respect to such limitation year and applied
against the Employer Contribution obligation. No such suspense
account shall share in any increase or decrease in the net worth of
the Trust property. If the limitation contained in this Section 7.4
would still be exceeded with respect to a Participant, the portion of
the Tax Deferred Compensation Contributions which would be allocated
to such Participant under Section 3.6, but which would exceed the
limitation herein, shall be deemed a forfeiture for such limitation
year and shall be administered in the manner earlier described in this
paragraph (c). For purposes of this paragraph (c), excess annual
contributions shall result only from the allocation of forfeitures, a
reasonable error in estimating a Participant's annual compensation, or
under other limited facts and circumstances which the Commissioner of
Internal Revenue finds justify the availability of the provision set
forth above.
(d) If any Participant in the Plan also shall be
covered by a qualified defined benefit plan (whether or not
terminated) maintained by an Employer or by a Related Corporation
concurrently with the Plan, the sum of subparagraphs (i) and (ii)
below shall in no event exceed l.0 in any limitation year where
(i) is the defined benefit plan fraction (determined
as of the close of such limitation year), the numerator of
which is the projected annual benefit of such Participant
under such plan and the denominator of which is the lesser of
(1) the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for such year,
or (2) the product of 1.4 multiplied by the amount which may
be taken into account under Section 415(b)(1)(B) of the Code
with respect to such Participant for such year; and
(ii) is the defined contribution plan fraction, the
numerator of which is the sum of the annual additions to such
Participant's Separate Accounts as
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of the close of such limitation year and for each prior year
of service with an Employer or a Related Corporation and the
sum of the lesser of the following amounts determined for such
year and each prior year of service with an Employer or a
Related Corporation: (1) the product of 1.25 multiplied by
the dollar limitation in effect under Section 415(c)(1)(A) of
the Code for such year determined without regard to Section
415(c)(6), or (2) the product of 1.4 multiplied by the amount
which may be taken into account under Sections 415(c)(1)(B)
(or Section 415(c)(7) or (8), if applicable) with respect to
such Participant for such year.
In the event the special limitation contained in this paragraph (d) is
exceeded, the benefits otherwise payable to the Participant under any
such qualified defined benefit plan shall be reduced to the extent
necessary to meet such limitation.
(e) In the event that a Participant is covered by
any other qualified defined contribution plan (whether or not
terminated) maintained by an Employer or a Related Corporation
concurrently with the Plan, the procedure set forth in paragraph (c)
shall be implemented first by returning the Participant's voluntary
employee contributions for such limitation year under all of the
defined contribution plans. If the limitation contained in this
Section 7.4 still is not satisfied after returning all of the
Participant's voluntary employee contributions under all such plans,
the portion of Employer contributions and of forfeitures for the
limitation year under all such plans which are allocable to the
Participant thereunder, but which exceed the limitation herein, shall
be deemed a forfeiture for the limitation year and shall, subject to
the provisions of this Section 7.4, be reallocated among and credited
to the separate accounts of the remaining participants or applied
against employer contribution obligations as provided for under each
such plan; except that the amount of
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the contribution by the employers and any forfeitures that is deemed a
forfeiture under this paragraph (e) shall be effected on a pro rata
basis among all of the plans, unless the Participant is covered by an
employee stock ownership plan or a money purchase pension plan, in
which event the forfeiture shall be effected first under the employee
stock ownership plan, then, if the limitation is still not satisfied,
under any other defined contribution plan (including the Plan) that is
not a money purchase pension plan, and, finally, if the limitation is
still not satisfied, under the money purchase pension plan. In the
event that a Participant is covered by a qualified defined benefit
plan, the procedure set forth in paragraph (d) shall be implemented
prior to effecting any reduction in the Participant's benefit under
the defined contribution plans.
7.5 Notification. As soon as practicable after the
end of each Plan Year, the Trustee shall notify the Company of the balance of
all Separate Accounts and Distribution Accounts as of the last day of such Plan
Year.
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ARTICLE VIII
WITHDRAWALS WHILE EMPLOYED
8.1 Withdrawal of Regular Participant Contributions.
By filing written notice with the Company within such number of days following
the Valuation Date on which it will become effective as the Company shall
require, a Participant may elect to withdraw in cash any portion or all of the
value of his own contributions attributable to Regular Participant
Contributions as of the most recent preceding Valuation Date; provided,
however, that such a withdrawal shall be made from his Separate Accounts
reflecting his Regular Participant Contributions on a pro rata basis. Any
Participant who makes a withdrawal pursuant to this Section 8.l for reasons
other than the alleviation of "hardship" as described in Section 8.3 (but
including also, for purposes only of this Section 8.1, financial hardship due
to the purchase of a principal residence for the Participant or any of his
dependents, the illness or injury of the Participant or any of his dependents,
and the education of the Participant or any of his dependents) may elect such a
withdrawal only once in any 12-consecutive-month period and thereafter may not
have made on his behalf Tax Deferred Compensation Contributions until the
Enrollment Date next following a period of six months after the Valuation Date
as of which such withdrawal
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is made. Any election made by a Participant in accordance with the provisions
of this Section 8.l shall be made in writing in the form prescribed by the
Company and shall become effective only when filed by the Participant with the
Company.
8.2 Withdrawal of Tax Deferred Compensation
Contributions. Subject to the provisions of this Section 8.2, a Participant
may file a written request with the Company, within such number of days
following the Valuation Date on which it is to be effective as the Company
shall require, for a withdrawal from his Separate Accounts reflecting his Tax
Deferred Compensation Contributions; provided, however, that such withdrawal:
(i) shall not be permitted by the Company unless it shall determine that such
withdrawal is necessary to meet an immediate and heavy financial need of the
Participant due to hardship, as defined in Section 8.3, which cannot be
satisfied from other resources of the Participant; (ii) shall be permitted by
the Company only after the Participant has withdrawn the total value of his
Separate Accounts reflecting Regular Participant Contributions pursuant to the
provisions of Section 8.1; and (iii) shall not exceed an amount equal to the
lesser of:
(a) the aggregate balances of his Separate Accounts
reflecting Tax Deferred Compensation Contributions, excluding in the
case of a Participant who has not attained age 59-1/2 any
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earnings thereon credited after December 31, 1988, or
(b) the amount required to meet the immediate
financial need created by the hardship.
Any amount withdrawn by a Participant in accordance with the provisions of this
Section 8.2 shall be from his Separate Accounts reflecting Tax Deferred
Compensation Contributions on a pro rata basis and shall be charged against
such Separate Accounts as of the date such withdrawal is paid. Upon receipt of
instructions to such effect from the Company, the Trustee shall pay such amount
to the Participant.
8.3 Determination of Hardship. The Company shall
--------------------------
determine for purposes of this Article VIII upon a Participant's application
whether the Participant has a "hardship" on account of an immediate and heavy
financial need. Immediate and heavy financial need of the Participant shall
mean a financial need on account of:
(1) Medical expenses (as described in Section 213(d)
of the Code) incurred by the Participant, the Participant's spouse, or
any dependents of the Participant (as defined in Section 152 of the
Code);
(2) Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition for the next semester or
quarter of post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the
Participant from his principal residence
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or foreclosure on the mortgage of the Participant's principal
residence.
A withdrawal shall not be determined by the Company to be necessary to satisfy
a hardship on account of an immediate and heavy financial need of the
Participant to the extent the amount of the withdrawal would be in excess of
the amount required to relieve the financial need or to the extent such need
may be satisfied from other resources that are reasonably available to the
Participant, which determination shall generally be made on the basis of all
relevant facts and circumstances. A withdrawal shall be treated as necessary
to satisfy a financial need if the Company reasonably relies upon the
Participant's representation that the need cannot be relieved:
(1) Through reimbursement or compensation by
insurance or otherwise;
(2) By reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself cause an
immediate and heavy financial need;
(3) By cessation of Tax Deferred Compensation
Contributions under the Plan; or
(4) By other distributions or non-taxable (as the
time of the loan) loans from the Plan or other plans maintained by any
other employer, or by borrowing from commercial sources on reasonable
commercial terms.
Notwithstanding the foregoing, a withdrawal shall be deemed to be necessary to
satisfy an immediate and heavy financial
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need of a Participant if all of the following requirements are satisfied:
(1) The withdrawal is not in excess of the amount of
the immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all non-taxable loans currently
available under all plans maintained by any Employer or Related
Corporation;
(3) The Participant's Tax Deferred Compensation
Contributions under the Plan, and the Participant's elective (Section
401(k) of the Code) contributions and employee (after-tax)
contributions under all other tax-qualified defined contribution plans
maintained by any Employer or Related Corporation shall be suspended
for 12 months after his receipt of the withdrawal; and
(4) The Participant shall not make Tax Deferred
Compensation Contributions under the Plan or elective (Section 401(k)
of the Code) contributions under any other plan maintained by any
Employer or Related Corporation for the Participant's taxable year
immediately following the taxable year of the withdrawal in excess of
the applicable limit under Section 402(g) of the Code for such next
taxable year less the amount of such Participant's Tax Deferred
Compensation Contributions and elective (Section 401(k) of the Code)
contributions for the taxable year of the withdrawal.
A Participant shall not fail to be treated as an Eligible Employee for purposes
of Section 401(k) of the Code or Section 401(m) of the Code merely because his
contributions are suspended in accordance with this Section 8.3. Except as
otherwise provided in this Section 8.3, a hardship
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withdrawal under Section 8.2 shall not affect the Participant's right under the
Plan to make withdrawals or continue to be a Participant, but a distribution
under the deemed necessity standard of this Section 8.3 shall require
suspension of the Participant's Tax Deferred Compensation Contributions for the
period and to the extent provided above.
8.4 Resumption of Contributions. A Participant who
has made a withdrawal in accordance with the provisions of Section 8.l and/or
8.2 and whose Tax Deferred Contributions are suspended by reason thereof may
resume having made on his behalf Tax Deferred Compensation Contributions in
accordance with the provisions of Section 3.1 as of the first date as of which
he is again permitted to make such contributions pursuant to such provisions or
as of any subsequent Enrollment Date, by filing a written notice with the
Company, on a form prescribed by it for such purpose, such number of days prior
to the date as of which such contributions are to be resumed as the Company
shall require.
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ARTICLE IX
TERMINATION OF PARTICIPATION AND DISTRIBUTION
9.1 Termination of Participation. Each Participant
shall cease to be a Participant hereunder upon the first to occur of the
following dates:
(a) on the date such Participant's employment with
an Employer or a Related Corporation is terminated after he has
attained age 65;
(b) on the date such Participant's employment with
an Employer or a Related Corporation is terminated because of physical
or mental disability preventing his continuing in the service of such
Employer, as determined by the Company upon the basis of a written
certificate of a physician selected by it;
(c) on the date such Participant's employment with
an Employer or a Related Corporation is terminated because of the
death of such Participant;
(d) on the date such Participant's employment with
an Employer or a Related Corporation is terminated as a result of a
reduction of force or a permanent closing of a division, office,
department, or plant of his Employer;
(e) on the date such Participant's employment with
an Employer or a Related Corporation is terminated after he has
completed five years of vested service under Section 9.4; or
(f) on the date such Participant's employment with
an Employer and all Related Corporations is terminated under any other
circumstances;
provided, however, that if such date shall be a Valuation Date, such
Participant, for all purposes hereof, shall cease to be a Participant upon the
next succeeding day.
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The date upon which a Participant ceases to be such is hereinafter referred to
as his "Settlement Date," and written notice thereof shall be given promptly by
his Employer to the Trustee. Notwithstanding anything to the contrary
contained in this Agreement, upon his attainment of age 65 a Participant's
right to receive distribution of his Separate Accounts in accordance with the
provisions of this Article IX shall be fully vested and nonforfeitable.
9.2 Vesting Schedule. A Participant whose
employment terminates in accordance with paragraph (a), (b), (c), (d), or (e),
of Section 9.1 shall be fully vested in the balance of each of the Separate
Accounts. A Participant whose employment terminates in accordance with
paragraph (f) of Section 9.1 shall have a vested interest in his Separate
Accounts to which Employer Contributions have been credited equal to a
percentage, but in no event in excess of 40%, determined in accordance with the
following schedule:
<TABLE>
<CAPTION>
YEARS OF VESTED SERVICE PERCENTAGE
----------------------- ----------
<S> <C>
Less than one 0%
One but less than two 10%
Two but less than three 20%
Three but less than four 30%
Four but less than five 40%
</TABLE>
Notwithstanding the foregoing provisions of Sections 9.1 and 9.2, the vested
interest of each person whose Settlement Date occurs on or after January 1,
1989, but who last
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completed an hour of service with an Employer and all Related Corporations
prior to January 1, 1989 (other than a person on layoff on that date), shall be
determined as if the provisions of the Plan in effect on December 31, 1988, had
continued in effect.
9.3 Transfer to Distribution Account. As of a
Participant's Settlement Date, and after notice thereof has been given as
provided in Section 9.l, all or a portion of the balance of each of the
Participant's Separate Accounts shall be transferred to the Distribution
Accounts established in his name in accordance with the provisions of Section
6.7, as follows:
(a) In the event such Participant's Settlement Date
occurs under the conditions specified in paragraph (a), (b), (c), (d),
or (e) of Section 9.1, the entire balance of each of his Separate
Accounts as of such Settlement Date shall be so transferred.
(b) In the event such Participant's Settlement Date
occurs under the conditions stated in paragraph (f) of Section 9.1,
(i) that portion of the balance of his Separate Accounts to which
Employer Contributions have been credited which shall be determined in
accordance with the vesting schedule set forth in Section 9.2 shall be
so transferred and (ii) the entire balance of his other Separate
Accounts shall be so transferred.
The portion of the balance of a Participant's Separate Account that is not
transferred to the Participant's Distribution Account as provided in this
Section 9.3 shall be disposed of in accordance with the provisions of
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Section 9.13. The Trustee shall make distribution to or for the benefit of the
Participant from the Distribution Accounts established in his name in
accordance with the provisions of this Article IX.
9.4 Years of Vested Service. For the purpose of
determining a Participant's vested interest in his Separate Accounts to which
Employer Contributions have been credited, a Participant shall be credited with
a number of years of vested service equal to the number of years of service
determined in accordance with the provisions of Section 2.5. Moreover, any
salaried employee of California Silica Products Company who was so employed on
January 1, 1985 and who became a Participant on that date shall be credited
with years of vested service in the same amount as the service for vesting
purposes with which he was credited under the Owens-Illinois Stock Purchase and
Savings Plan as of August 31, 1984, with respect to periods prior to such date.
9.5 Election of Former Schedule. In the event the
Company adopts an amendment to the Plan that directly, or indirectly, affects
the computation of an Employee's nonforfeitable interest in his Separate
Accounts, any Participant with three or more years of vested service shall have
a right to have his nonforfeitable interest in his Separate Accounts continue
to be determined
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under the vesting schedule in effect prior to such amendment rather than under
the new vesting schedule, unless the nonforfeitable interest of such
Participant in his Separate Accounts under the Plan, as amended, at any time is
not less than such interest determined without regard to such amendment. Such
Participant shall exercise such right by giving written notice of his exercise
thereof to the Company within 60 days after the latest of (i) the date he
receives notice of such amendment from his Employer, (ii) the effective date of
the amendment, or (iii) the date the amendment is adopted. Notwithstanding the
foregoing provisions of this Section 9.5, the vested interest of each
Participant on the effective date of such amendment shall not be less than his
interest under the Plan as in effect immediately prior to the effective date
thereof.
9.6 Distribution. The Trustee shall make
distribution to or for the benefit of the former Participant or his
Beneficiary, as the case may be, in a single lump-sum payment equal to the
aggregate amount of the balances of his Distribution Accounts. Distribution
shall be made as soon as reasonably practicable after the first Valuation Date
occurring on or after the former Participant's Settlement Date, but in no event
later than 60 days after the close of the Plan Year in which he (i) attains age
65 or (ii) terminates employment, whichever
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is later; provided, however, that at the election of the Participant the
Trustee shall defer making distribution until the earlier of a specified date
or the date described in Section 9.7. Any such election shall be made by
submitting to the Company on a form provided by it a written statement, signed
by the Participant, which describes his benefit and the date on which payment
is to be made. Notwithstanding the foregoing provisions of this Section 9.6,
if the amount distributable to a former Participant is in excess of $3,500 and
the former Participant has not attained age 65, no distribution shall be made
to such former Participant without his written consent.
9.7 Limitation on Commencement of Distribution.
Notwithstanding the provisions of Section 9.6, in no event shall the
distribution of the interest of a Participant commence later than the April 1
following the close of the calendar year in which the Participant attains age
70 1/2. In the event the former Participant dies after commencement of the
distribution of his interest, any remaining portion of such interest shall be
distributed to his Beneficiary in the method which is at least as rapid as the
method being used at the date of his death. In the event the former
Participant dies prior to commencement of the distribution of his interest, the
entire interest
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attributable to such former Participant shall be distributed within five years
after the date of his death.
9.8 Effect of Company's Determination. In
exercising its authority under this Article IX, the Company shall act in such
a manner as it in good faith shall determine will most adequately and fairly
meet the needs of each former Participant or Beneficiary,
as the case may be. No authority shall be exercised in such manner as to
discriminate between any class or group of Participants. The determination of
the Company with respect to all questions which may arise under this Article IX
(if made in accordance with the standards prescribed herein and in Section
10.3) shall be conclusive upon all persons claiming to have any interest
hereunder. In making any determinations hereunder, the Company may rely upon
any signed statement which the Participant files with it.
9.9 Separate Distribution Funds. As of a former
Participant's Settlement Date, but only if such Settlement Date occurred prior
to April 1, 1989, the Trustee established a "Separate Distribution Fund" for
the benefit of such former Participant or, if he was not then living, his
Beneficiary, to which such Separate Distribution Fund was transferred, in
accordance with procedures established by the Company, that portion of his
former interest in the Equity Fund, the Insured Fund, and the
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Fixed Income Fund which was segregated from the funds pursuant to Plan
provision then in effect. A Separate Distribution Fund shall not share in any
net increase or decrease in value of the assets of the mingled funds, and shall
not for any other purpose constitute a part of the mingled funds. Distribution
shall be made from such Separate Distribution Fund in the same manner as if it
were a Distribution Account, and references to the Distribution Accounts of a
former Participant shall be deemed to include any Separate Distribution Fund
maintained on his behalf for this purpose. Pending complete distribution
thereof, such Separate Distribution Fund shall be held by the Trustee for the
benefit of the former Participant or his Beneficiary, as the case may be,
subject to all provisions of this Agreement relating to the Trust property in
general. Any net income, gain, or loss arising from such Separate Distribution
Fund shall serve to increase or decrease, as the case may be, such Separate
Distribution Fund. Any expenses of the Trustee which are directly attributable
to its administration of a Separate Distribution Fund, as determined by the
Trustee, shall be charged to and paid from such fund to the extent of the
assets thereof.
9.10 Reemployment of Former Participant. If a former
Participant is reemployed by an Employer, he shall be treated as a new Employee
for all purposes of this
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Agreement, subject to the provisions hereof relating to crediting years of
service and years of vested service; provided, however, that in no event shall
any years of vested service attributable to such former Participant's service
with an Employer after his reemployment affect the transfer of the balance of
his Separate Accounts to his Distribution Accounts under Section 9.3 as of his
prior Settlement Date. Furthermore, if such former Participant again becomes a
Participant in accordance with the provisions of Article II, the Company, upon
his subsequent termination of participation, may cause his new Distribution
Accounts to be consolidated with the Distribution Accounts which previously had
been established for him.
9.11 Restrictions on Alienation. Except as provided
in Section 414(p) of the Code relating to qualified domestic relations orders,
no right or interest under the Plan of any Participant, former Participant, or
Beneficiary at any time shall be subject in any manner to anticipation,
alienation, assignment (either by law or in equity), encumbrance, garnishment,
levy, execution, or other legal or equitable process. No person shall have
power in any manner to anticipate, transfer, assign (either at law or in
equity), alienate, or subject to attachment, garnishment, levy, execution, or
other legal or equitable
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process, or in any way encumber his rights or interests under the Plan, and any
attempt to do so shall be void.
9.12 Facility of Payment. In the event that it
shall be found that any person to whom an amount is payable hereunder
is incapable of attending to his financial affairs because of
any mental or physical condition, including the infirmities of advanced age,
such amount (unless prior claim therefor shall have been made by a duly
qualified guardian or other legal representative), in the discretion of the
Company, may be paid to another person for the use or benefit of the person
found incapable of attending to his financial affairs or in satisfaction of
legal obligations incurred by or on behalf of such person. The Trustee shall
make such payment only upon receipt of written instructions to such effect from
the Company. Any such payment shall be charged to the Distribution Accounts of
the person found incapable of attending to his financial affairs and shall be a
complete discharge of any liability therefor under this Agreement.
9.13 Disposition of Separate Accounts. In the event
that a Participant's Settlement Date occurs under the conditions specified in
paragraph (f) of Section 9.1, the balances remaining in the Participant's
Separate Accounts that are not transferred to the Distribution Accounts
established in his name upon the
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occurrence of his Settlement Date shall be disposed of as follows:
(a) In the event that the Participant receives a
lump-sum distribution of the Distribution Accounts established in his
name prior to the end of the second Plan Year beginning on or after
his employment termination date, the balances remaining in the
Participant's Separate Accounts will be forfeited and his Separate
Accounts closed as of the last day of the Plan Year in which such
lump-sum distribution occurs.
(b) In the event that paragraph (a) is not
applicable, the balances remaining in the Participant's Separate
Accounts will continue to be held in such accounts and will not be
forfeited until the end of the fifth Plan Year beginning on or after
his employment termination date, at which time the Participant's
Separate Accounts shall be closed. In the event that such a
Participant returns to employment with an Employer or a Related
Corporation prior to the end of such fifth Plan Year, the balance of
the Distribution Accounts, determined as of the Valuation Date next
following his date of rehire, shall be recredited as of such Valuation
Date to his Separate Accounts from which derived.
Whenever the interest of a Participant in his Separate Accounts is forfeited
under the provisions of the Plan with respect to a Plan Year, the amount of
such forfeiture, as of the last day of such Plan Year, shall be applied against
the Employer Contribution obligation of the Employers for the last calendar
month of such Plan Year. Notwithstanding the foregoing, however, should the
amount of all such forfeitures for any Plan Year exceed the amount of the
Employer Contribution obligation for such last calendar month, the excess
amount of such forfeitures shall be held
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unallocated in a suspense account and shall for all Plan purposes be applied
against the Employer Contribution obligation for the following calendar month
(and succeeding calendar months, as necessary).
9.14 Recrediting of Forfeited Amounts. A former
Participant who forfeited the balances of his Separate Accounts that were not
transferred to Distribution Accounts in accordance with the provisions of
Section 9.13 and who returns to employment covered under the Plan shall have
such forfeited amounts recredited to his new Separate Accounts, without
adjustment for interim gains or losses experienced by the Trust, if:
(a) he returns to employment covered under the Plan
before the end of the fifth Plan Year beginning on or after the date
he received distribution from his Distribution Accounts, and
(b) he repays to the Plan the full amount of the
distribution he received from his Distribution Accounts before the end
of the fifth year beginning on the date he is reemployed.
Funds needed in any Plan Year to recredit the Separate Accounts of such
Participant with the amounts of prior forfeitures in accordance with the
preceding sentence shall first come from forfeitures that arise during such
Plan Year, to the extent sufficient, and, to the extent not sufficient, shall
be provided by an Employer contribution.
9.15 Felonious Conduct of a Participant.
Notwithstanding anything to the contrary contained in this
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Agreement, in the event that, prior to the termination of the Plan, a
Participant's employment with an Employer is terminated by reason of fraud,
theft, embezzlement, or his felonious conduct, proven or admitted, in
connection with such employment, and, at such time, the Participant has less
than five years of vested service under Section 9.4, the following provisions
shall apply:
(a) There shall be returned to him an amount equal
to his interest in the Trust which is attributable to his Tax Deferred
Compensation Contributions and his Regular Participant Contributions.
(b) Except as provided in paragraph (a), his entire
interest in the Trust shall be forfeited and shall be applied against
the Employer Contribution obligation as provided in Section 9.13.
(c) Neither such former Participant nor his
Beneficiary shall be entitled to any benefit or other rights hereunder
except as provided in this Section 9.15.
9.16 Designation of Beneficiary. In the event of the
death of a Participant or former Participant prior to distribution in full of
his interest under the Plan, the spouse, if any, of such Participant or former
Participant shall be his Beneficiary and receive distribution of his remaining
interest in accordance with the provisions of Section 9.6; provided, however,
that a Participant may designate a person or persons other than his spouse as
his beneficiary if the requirements of Section 9.18 are met.
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9.17 Beneficiary in Absence of a Designated
Beneficiary. If a Participant or former Participant who dies does not have a
surviving spouse and if no Beneficiary has been designated pursuant to the
provisions of Section 9.16 or if no Beneficiary survives such Participant or
former Participant, then the Beneficiary shall be the estate of such
Participant or former Participant. If any Beneficiary designated pursuant to
Section 9.16 dies after becoming entitled to receive distributions hereunder
and before such distributions are made in full, and if no other person or
persons have been designated to receive the balance of such distributions upon
the happening of such contingency, the estate of such deceased Beneficiary
shall become the Beneficiary as to such balance.
9.18 Spousal Consent to Beneficiary Designation. In
the event a Participant or former Participant is married, any Beneficiary
designation, other than a designation of his spouse as Beneficiary, shall be
effective only if his spouse consents in writing thereto and such consent
acknowledges the effect of such action and is witnessed by a Plan
representative or a notary public, unless a Plan representative finds that such
consent cannot be obtained because the spouse cannot be located or because of
other circumstances set forth in Section 401(a)(11) of the Code and regulations
issued thereunder. Such spousal
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consent shall be valid only with respect to the spouse who signs the consent.
9.19 Methods of Distribution in Effect Prior to
January 1, 1989. In the event that distribution of the interest of a former
Participant or Beneficiary commenced prior to January 1, 1989, in accordance
with provisions of the Plan in effect at the time of such commencement,
distribution shall continue in accordance with such method; provided, however,
that any such distribution shall be made over a period not extending beyond the
life or life expectancy of such former Participant or the joint lives or joint
life expectancy of such former Participant and his Beneficiary. For the
purposes of this Section 9.19, the life expectancy of a former Participant and
his spouse may be redetermined, but not more frequently than annually, at the
election of the former Participant. All distributions hereunder shall be
determined and made in accordance with Treasury regulations under Sec-tion
401(a)(9) of the Code, including the minimum distribution incidental benefit
requirement of Treasury Reg. Section 1.401(a)(9)-2.
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ARTICLE X
ADMINISTRATION
10.1 General. The Company shall be responsible for
the general administration of the Plan and for carrying out the provisions
thereof, and shall constitute the administrator for purposes of the Act and the
plan administrator for purposes of the Code. The Company shall have all such
powers and authorities as may be necessary to carry out the provisions of the
Plan, including the discretionary power and authority to interpret and construe
the provisions of the Plan and to resolve any disputes which arise under the
Plan, the powers and authorities expressly conferred upon it in this Agreement,
and all such other powers and authorities as shall be reasonably necessary to
carry out the expressly conferred powers, authorities, and duties. The Company
may from time to time establish rules for the administration of the Plan. The
Company may employ such attorneys, investment counsel, agents, and accountants
as it shall deem necessary or advisable to assist it in carrying out its duties
hereunder. The Company shall be a "named fiduciary" as that term is defined in
Section 402(a)(2) of the Act. The Company may:
(a) allocate any of the powers, authorities, or
responsibilities for the operation or administration of the Plan,
which are retained by it or granted to it by this Article X to the
Trustee; and
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(b) designate a person or group of persons other
than a named fiduciary, to carry out any of such powers, authorities,
or responsibilities;
provided, however, that no power, authority, or responsibility of the Trustee
shall be subject to the provisions of paragraph (b) of this Section 10.1; and
provided, further, that no allocation or delegation by the Company of any its
powers, authorities, or responsibilities to the Trustee shall become effective
unless such allocation or delegation shall first be accepted by the Trustee in
a written instrument signed by it and delivered to the Company.
10.2 Action of Company. Subject to the provisions of
Sections 10.3 and 10.4, any action taken by the Company which is authorized,
permitted, or required under the Plan shall be final and binding upon the
Employers and the Trustee, all persons who have or who claim an interest under
the Plan, and all third parties dealing with the Trustee or the Company.
10.3 Denial of Claims. Whenever the Company denies,
in whole or in part, a claim for benefits filed by any person (hereinafter
referred to in this Article X as the "Claimant"), the Company shall transmit a
written notice setting forth, in a manner calculated to be understood by the
Claimant, a statement of the specific reasons for the denial of the claim,
references to the
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specific Plan provisions on which the denial is based, a description of any
additional material or information necessary to perfect the claim and an
explanation of why such material or information is necessary, and an
explanation of the claims review procedure as set forth in Section 10.4. In
addition, the written notice shall contain the date on which the written notice
was sent and a statement advising the Claimant that, within 60 days of the date
on which such notice was received, he may obtain review of the decision of the
Company.
10.4 Claims Review Procedure. Within 60 days of the
date on which the notice of denial of claim is received by the Claimant, the
Claimant, or his authorized representative, may request that the claim denial
be reviewed by filing with the Company a written request therefor, which
request shall contain the following information:
(a) The date on which the notice of denial of claim
was received by the Claimant;
(b) The date on which the Claimant's request was
filed with the Company; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Company shall
control in the event that the date of the actual filing is later than
the date stated by the Claimant pursuant to this paragraph (b);
(c) The specific portions of the denial of his claim
which the Claimant requests the Company to review;
(d) A statement by the Claimant setting forth the
basis upon which he believes the
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Company should reverse its previous denial of his claim for benefits
and accept his claim as made; and
(e) Any written material (included as exhibits)
which the Claimant desires the Company to examine in its consideration
of his position as stated pursuant to paragraph (d).
Within 60 days of the date determined pursuant to paragraph (b) of this Section
10.4, the Company shall conduct a full and fair review of the decision denying
the Claimant's claim for benefits. Within ten days following the date of such
review, the Company shall send to the Claimant its written decision setting
forth, in a manner calculated to be understood by the Claimant, a statement of
the specific reasons for its decision, including references to the specific
Plan provision relied upon.
10.5 Indemnification. In addition to whatever rights
of indemnification the members of the Board of Directors of the Company and any
officer of the Company may be entitled under the Articles of Incorporation or
Regulations of the Company, under any provision of law or under any other
agreement, the Company shall satisfy any liability actually and reasonably
incurred by any such member or officer, including expenses, attorneys' fees,
judgments, fines, and amounts paid in settlement, in connection with any
threatened, pending, or completed action, suit, or proceeding which is related
to the exercise or failure to exercise by such member or officer of any of the
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authority, responsibilities, or discretion provided under this Agreement or
reasonably believed by such member or officer to be provided hereunder, and any
action taken by such member or officer in connection therewith.
10.6 Qualified Domestic Relations Orders. The
Company shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures
shall be in writing and shall comply with the provisions of Section 414(p) of
the Code and regulations issued thereunder. Notwithstanding anything to the
contrary contained in the Plan, the Company shall direct the Trustee to make
immediate distribution to or for the benefit of an alternate payee under a
domestic relations order that has been determined to be a qualified order of
the alternate payee's benefit under the Plan in any form which such benefit may
be paid under the Plan to the Participant or former Participant with respect to
whom such qualified order applies, but only if the qualified order provides for
the immediate distribution.
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ARTICLE XI
POWERS AND DUTIES OF THE TRUSTEE
11.1 Power and Duties. In the administration of the
Trust held hereunder, the Trustee shall have the powers and duties set forth in
this Article XI, in addition to all powers and duties otherwise expressly set
forth in this Agreement.
11.2 Trust Property and Investments. Subject to the
provisions of Sections 6.2, 6.3, 6.4, 11.3, and 11.7, the Trustee is empowered:
(a) to invest and reinvest all or any part of the
Trust property, including both principal and income, in such
securities, real estate, and other property as may be selected by it;
moreover, the Trustee may invest and reinvest the entire trust
property or any part thereof in qualifying Employer securities;
(b) to purchase annuities or otherwise insure the
payment of benefits under a contract or contracts with an insurance
company or companies, and hold and retain such contract or contracts
as part of the Trust;
(c) to sell, lease, exchange, or otherwise dispose
of all or any part of the Trust property at such prices, upon such
terms and conditions, and in such manner as it shall determine,
including the right to lease, with or without option to purchase, for
any term, irrespective of the period of the Trust, and also including
the right to surrender or cancel any insurance or annuity contract or
contracts at any time held in the Trust;
(d) to exercise, buy, or sell rights of conversion
or subscription; provided, however, that any conversion of Employer
securities shall be on the same terms as are applicable to all holders
of the convertible securities and in
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exchange for at least the fair market value of the securities
converted;
(e) to enter into or oppose any plan of
consolidation, merger, reorganization, capital readjustment, or
liquidation of any corporation or other issuer of securities held
hereunder (including any plan for the sale, lease, or mortgage of any
of its property or the adjustment or liquidation of any of its
indebtedness) and, in connection with any such plan, to enter into any
security holders' agreement, to deposit securities under such
agreement, and to pay assessments or subscriptions from the other
assets held hereunder;
(f) to retain in cash or securities in a form
unproductive of income such portion of the Trust property as it shall
determine is necessitated by the cash requirements of the Trust;
provided, however, that, to the maximum extent feasible, such amounts
shall be held in forms of investment which are productive of income
but are sufficiently liquid to meet such cash requirements;
(g) to deposit any securities held hereunder in any
depository;
(h) to deposit all or any part of the Trust
property, including both principal and income, in its own banking
department; provided, however, that any such deposits shall bear a
reasonable rate of interest; and provided, further, that such deposits
shall be subject to the provisions of Section 11.11;
(i) to invest and reinvest all or any part of the
Trust property under an insurance contract or contracts which contain
provisions relating to a guaranteed rate of return on such investment;
(j) to invest and reinvest, in its discretion,
notwithstanding the appointment of any Investment Manager pursuant to
the provisions of Section 11.7, such amounts of cash forming part of
the Trust property in such United States obligations, time deposits
(including savings accounts and certificates of deposit in the
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Society National Bank or its affiliates if such deposits bear a
reasonable rate of interest) or corporation commercial notes including
variable notes and units of a common trust fund holding any such
variable note administered by the Trustee as are then available and
which bear at the time of acquisition a maturity of not more than 15
months; and
(k) to transfer to and invest all or any part of the
Trust property in the Multiple Investment Trust for Employee Benefit
Plans of Society National Bank, in a master trust maintained for plans
of the Company and its affiliates (including the Oglebay Norton
Company Master Trust), or in any other appropriate collective
investment trust which constitutes an exempt trust within the meaning
of the Code and which is then maintained by a bank or trust company
when acting as Trustee, co-Trustee, agent for the Trustee, or as an
Investment Manager or by a bank or trust company that is a subsidiary
of, or under common control with, any such bank or trust company
acting as Trustee, co-Trustee, agent for the Trustee, or Investment
Manager; provided that the instrument establishing any such collective
investment trust, as amended from time to time, shall govern any
investment therein, which instrument is hereby made a part of this
Agreement as if fully set forth herein.
The term "securities", wherever used in this Agreement, shall include common
and preferred stocks, contractual obligations of every kind, whether secured or
unsecured, equitable interests in real or personal property, and intangible
property of every description and howsoever evidenced. Notwithstanding the
foregoing provisions of this Section 11.2, or of Sections 11.6 and 11.7, the
following provisions shall apply:
(l) the Trustee shall not acquire or hold any
Employer security unless it is a qualifying Employer security and
shall not acquire or
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hold any Employer real property unless it is qualifying Employer real
property. The terms "Employer security", "qualifying Employer
security", "Employer real property", and "qualifying Employer real
property" shall have the meanings provided in Section 407(d) of the
Act; and
(m) the Trustee is empowered to re-tain as an
investment, without liability for depreciation in value, any Employer
securities contributed to it by the Employers or acquired by it prior
to December 31, 1989, or as hereinafter provided at the direction of
the Compensation and Organization Committee, even though the purchase
or retention of such securities may result in a large portion of the
Trust property being invested in securities of a single corporation.
Furthermore, the Compensation and Organization Committee of the Board
of Directors may at any time and from time to time direct the Trustee
in writing regarding the purchase, sale, or retention of any such
Employer securities and regarding the voting of any such Employer
securities.
11.3 Investment Guidelines. The powers conferred
upon the Trustee in Section 11.2 shall be exercised by the Trustee in its sole
discretion, subject, however, to the provisions of paragraph (m) of Section
11.2, this Section 11.3, and Section 11.7. In investing and reinvesting the
assets of the Bond Fund, the Trustee shall be guided, in general, by a desire
to conserve principal while at the same time providing reasonable accumulations
of income, to which end a substantial part of the Bond Fund should at all times
be invested in securities and other property providing for a fixed return on
investment. Subject to the provisions of Section 6.2, in investing and
reinvesting the assets of the Equity Fund,
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the Trustee should be guided, in general, by a desire to provide for growth in
capital as well as some return on investment, to which end a substantial part
of the Equity Fund should be invested in equity securities; provided, however,
that such general guides set forth in this Section 11.3 are not to be applied
as a single standard for investment, but rather in conjunction with other
pertinent factors such as the relative state of the markets for equity and
fixed income securities, the size of the particular amounts to be invested from
time to time, the fiduciary standards established by the Act, and the like.
Such general guides are directory only and do not in any way limit the general
powers of investment otherwise set forth in Section 11.2. The assets of the
Insured Fund shall be invested by the Trustee under a contract or contracts
between the Trustee and an insurance company or companies, which contract or
contracts shall contain provisions relating to the return on investment that
such insurance company or companies shall be obligated to provide with respect
to amounts invested, and the repayment of such amounts in the event of
distribution made in accordance with the provisions of the Plan or in the event
of termination or discontinuance of such contract or contracts, or in such
other investments as are described in Section 6.3.
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11.4 Claims Against Trust. Subject to the provisions
of Section 11.8, the Trustee is empowered to compromise and adjust any and all
claims, debts, or obligations in favor of or against the Trust, whether such
claims be in litigation or not, upon such terms and conditions as it shall
determine, and to reduce the rate of interest on, to extend or otherwise
modify, or to foreclose upon default or otherwise enforce any such claim, debt,
or obligation.
11.5 Borrowing. Subject to the provisions of Section
11.8, the Trustee is empowered to make advances or borrow money upon such terms
and conditions as it deems desirable or proper for the improvement, protection,
preservation, or other best interest of the Trust. For the repayment of any
such advance with interest, the Trustee shall have a lien upon the property of
the Trust, and for any sum so borrowed may issue its promissory note as Trustee
and secure the repayment thereof by mortgaging or pledging any part or all of
the Trust property.
11.6 Voting Rights. Subject to the provisions of
Sections 11.2 and 11.7, the Trustee is empowered to exercise the voting rights
appurtenant to any securities held hereunder, either in person or by proxy, and
to execute proxies or powers of attorney to any one or more persons.
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11.7 Investment Manager. The powers conferred upon
the Trustee in Sections 11.2 and 11.6 shall be exercised by the Trustee in its
sole discretion; provided, however, that the Company at any time and from time
to time, by action of its Board of Directors, may appoint an Investment Manager
to manage the investment of any assets of the Trust. The term "Investment
Manager" shall have the same meaning as provided in Section 3(38) of the Act.
Upon appointment of the Investment Manager in writing and the written
acknowledgment by the Investment Manager of its status as a fiduciary with
respect to the Plan and Trust, it shall have such authority as is delegated to
it by the resolution of the Board of Directors in which it is appointed,
together with such authority as thereafter from time to time may be delegated
to it by resolution of the Board of Directors. Upon the appointment of an
Investment Manager and the delegation to it of authority over investment
management as herein provided, the Trustee shall be required to follow the
written investment directions of the Investment Manager. Any such written
direction of the Investment Manager may be of a continuing nature, or
otherwise, and may be revoked or superseded by the Investment Manager at any
time by notice in writing to the Trustee.
11.8 Directions. The powers conferred upon the
Trustee in Sections 11.4 and 11.5 shall be exercised by
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the Trustee in its sole discretion; provided, however, that the Company, at any
time and from time to time, by action of its Board of Directors, may direct the
Trustee in writing to obtain written approval of the Committee or of such
person or persons as the Board of Directors of the Company may designate before
exercising any one or more of such powers. Moreover, the Company, at any time
and from time to time, by action of its Board of Directors, may direct the
Trustee in writing to follow any written directions of the Committee or of such
person or persons as the Board of Directors may designate, with respect to the
exercising of any one or more of such powers. Any such written directions by
the Committee or by such designated person or persons may be of a continuing
nature, or otherwise, and may be revoked or superseded by the Committee or by
such person or persons, or by the Board of Directors, at any time by notice in
writing to the Trustee. The Trustee shall be required to follow the directions
so given to it; provided, however, that the Trustee shall not be required to
follow any directions which would result in a breach of the Trustee's fiduciary
duties; and provided, further, that the Trustee shall have no obligation by
reason of any such direction to make any advance or loan in its banking
capacity.
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11.9 Registration of Securities; Nominees. The
Trustee is empowered to register securities in its own name, or in the name of
its nominee without disclosing the Trust, or to hold the same in bearer form,
and to take title to other property in its own name or in the name of its
nominee without disclosing the Trust; but the Trustee shall be responsible for
the acts of its nominee.
11.10 Agents, Attorneys, Actuaries, and Accountants.
The Trustee is empowered to employ such agents, attorneys, actuaries, and
accountants as it may deem necessary or proper in connection with its duties
hereunder, and to determine and pay the reasonable compensation and expenses of
such agents, attorneys, actuaries, and accountants.
11.11 Deposit of Funds. The Trustee is empowered to
deposit funds, pending investment or distribution thereof, in any bank
organized under the national banking laws of the United States or under the
laws of the State of Ohio, or in an insured savings and loan association
located in the State of Ohio; and it is authorized to accept such regulations
covering the withdrawal of funds so deposited as it shall deem proper;
provided, however, that no funds may be deposited by the Trustee in its own
banking department under this Section 11.11 unless authorized pursuant to the
provisions of Section 408 of the Act.
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11.12 Legal Advice. The Trustee may consult with
counsel selected by it, who may be of counsel for the Company or a Related
Corporation, as to any matters or questions arising hereunder, and the opinion
of said counsel shall be full and complete authority and protection in respect
to any action taken, suffered, or omitted by the Trustee in good faith and in
accordance with the opinion of said counsel.
11.13 Other Authority. The Trustee is authorized to
execute and deliver any and all instruments and to perform any and all acts
which may be necessary or proper to enable it to discharge its duties under
this Agreement and to carry out the powers and authority conferred upon it.
11.14 Court Action Not Required. All the powers and
authority herein conferred upon the Trustee shall be exercised by it without
the necessity of applying to any court for leave or confirmation. No person
dealing with the Trustee shall be required to ascertain whether the Trustee
shall have obtained the approval of any court or of any person to any action
which it may propose to take hereunder, but every such person may rely upon the
deed, transfer, or assurance of the Trustee.
11.15 Trustee's Performance. In the exercise of any
of the powers and authorities conferred upon it
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herein, the Trustee at all times shall adhere to the fiduciary standards
established by the Act.
11.16 Directions to the Trustee. Any written
direction, request, approval, or other document signed in
the name of one of the Employers or an officer thereof, shall be conclusively
deemed to constitute the written direction, approval, or other document of such
Employer.
11.17 Payment of Taxes; Indemnity. The Trustee is
empowered to pay out of the assets of the Trust, as a general charge thereon,
any and all taxes of whatsoever nature assessed on or in respect thereto;
provided, however, that if the Company shall notify the Trustee in writing that
in the opinion of its counsel any such tax is not lawfully assessed, the
Trustee, if so requested by the Company, shall contest the validity of such tax
in any manner deemed appropriate by the Company or its counsel. The word
"taxes", as used herein, shall be deemed to include any interest or penalties
assessed in respect to such taxes. Unless the Trustee first shall have been
indemnified to its satisfaction, the Trustee shall not be required to contest
the validity of any tax, to institute, maintain, or defend against any other
action or proceeding, or to incur any other expense in connection with the
Trust except to the extent that the same is sufficient therefor.
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11.18 Compensation and Expenses. The Trustee shall
be entitled to such reasonable compensation for its service as the Company and
the Trustee from time to time shall agree, and shall be entitled to
reimbursement for all reasonable expenses incurred by the Trustee in the
administration of the Trust. Said compensation and expenses shall be paid from
the Trust property by the Trustee as a general charge thereon; provided,
however, that the Company may elect to make payment of such amounts subject,
however, to allocation among the Employers, the share of each to be determined
by the Company on a fair and equitable basis. Notwithstanding the foregoing,
the Trustee shall be empowered to pay expenses from a Separate Distribution
Fund as provided in Section 9.9. Costs incident to the purchase or sale of
securities, such as brokerage fees, commissions, and stock transfer taxes,
shall be changed to the fund or Separate Distribution Fund with respect to
which such purchases or sales are made.
11.19 Apportionment of Expenses. Expenses and other
charges made against the Trust property shall be apportioned equitably, by the
Trustee, as between the Fixed Income Fund, the Equity Fund, and the Insured
Fund, taking into consideration the extent to which a particular charge is
directly attributable to the operations of one Fund only
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and the extent to which a particular charge is attributable to the operations
of the Trust as a whole.
11.20 Records and Statements. The Trustee shall
keep accurate records of all receipts, disbursements, and other transactions
affecting the Trust which, together with the assets comprising the Trust and
all evidences thereof, shall be available during the Trustee's usual
business hours for inspection (or for the purpose of making copies or
reproductions thereof) by the Company or its duly authorized representatives.
The Trustee shall render to the Company monthly statements of
all receipts, disbursements, and other transactions affecting the Trust during
the preceding month, and the Trustee further shall render to the Company
annually, or more frequently if requested, a statement of all assets then held
by it hereunder. The Trustee shall notify the Company promptly concerning any
default of any kind with respect to securities held hereunder.
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ARTICLE XII
SUCCESSOR TRUSTEE
12.1 Resignation or Removal of the Trustee. The
Trustee may resign at any time by giving notice in writing to the Company at
least 30 days before such resignation is to become effective, unless the
Company shall accept as adequate a shorter notice. The Company, by action of
its Board of Directors, may remove, with or without cause, any Trustee acting
hereunder by giving notice in writing to such Trustee at least 30 days before
such removal is to become effective, unless the Trustee shall accept as
adequate a shorter notice.
12.2 Appointment of the Successor Trustee. If for
any reason a vacancy should occur in the trusteeship, then a successor trustee
shall be designated by the Company, by action of its Board of Directors, which
successor trustee may be either a corporation authorized to carry on a trust
business, a national banking association, or any three or more individuals
selected by the Company. Any successor trustee appointed hereunder shall
execute, acknowledge, and deliver to the Company an instrument in writing
accepting such appointment hereunder. Such successor trustee thereupon shall
become vested with the same title to the property comprising the Trust
property, and the same powers and duties with respect thereto, as hereby
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are vested in the original Trustee. The predecessor trustee shall execute all
such instruments and perform all such other acts as the successor trustee shall
reasonably request to effectuate the provisions hereof. The successor trustee
shall have no duty to inquire into the administration of the Trust for any
period prior to its succession.
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ARTICLE XIII
AMENDMENT AND TERMINATION
13.1 Amendment. Subject to the provisions of Section
13.2, the Company, at any time and from time to time, by action of its Board of
Directors, may amend this Agreement; provided, however, that no such amendment
shall substantially change the powers, duties, or liabilities of the Trustee,
without the approval of the Trustee; and provided, further, that the Board may
delegate its authority hereunder to the extent provided in a resolution setting
forth such delegation.
13.2 Limitation on Amendment. The Company shall make
no amendment to this Agreement which shall result in the forfeiture or
reduction of the interest of any Participant, former Participant, or
Beneficiary under the Trust; provided, however, that nothing herein contained
shall restrict the right to amend the provisions hereof relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be
made hereunder which shall permit any part of the Trust property to revert to
an Employer or be used for or be diverted to purposes other than the exclusive
benefit of the Participants, former Participants, and their Beneficiaries.
13.3 Termination. The Company reserves the right, by
action of its Board of Directors, to terminate
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the Plan as to each and every Employer at any time, which termination shall
become effective upon notice in writing to the Committee and to the Trustee
(the effective date of such termination being hereinafter referred to as the
"termination date"). The Plan shall terminate automatically if there shall be
a complete discontinuance of contributions by every Employer hereunder. In the
event of the termination of the Plan, written notice thereof shall be given to
all persons who have a vested interest hereunder and to the Trustee. Upon any
such termination of the Plan, the Trustee shall take the following actions for
the benefit of Participants, former Participants, and Beneficiaries:
(a) As of the termination date, the Trustee shall
value the Funds and adjust all accounts in the manner provided in
Section 7.2 with any unallocated contributions being allocated for the
Plan Year up to the termination date as otherwise provided in this
Agreement. The termination date shall become a Valuation Date for
purposes of Article VII. In determining the net worth of the Funds,
the Trustee shall include as a liability such amounts as in its
judgment shall be necessary to pay all expenses in connection with the
termination of the Trust and the liquidation and distribution of the
Trust property, as well as other expenses, whether or not accrued, and
shall include as an asset all accrued income.
(b) The Trustee thereafter shall dispose of all
Separate Accounts and Distribution Accounts to or for the benefit of
each Participant, former Participant, or Beneficiary, in accordance
with Article IX.
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Notwithstanding anything to the contrary contained in this Agreement, upon any
such Plan termination, the interest of each Participant, former Participant,
and Beneficiary shall become fully vested and nonforfeitable; and, if there is
a partial termination of the Plan, the interest of each Participant and
Beneficiary who is affected by such partial termination shall be fully vested.
Moreover, no such Plan termination shall affect distributions from any
Distribution Account or Separate Distribution Fund of Participants whose
Settlement Dates occurred prior to the termination date.
13.4 Withdrawal of an Employer. Any Employer other
than the Company, by action of its Board of Directors, may withdraw from the
Plan, such withdrawal to be effective upon notice in writing to the Committee
and the Trustee (the effective date of such withdrawal being hereinafter
referred to as the "withdrawal date"); and such withdrawing Employer shall
thereupon cease to be an Employer for all purposes hereof. Moreover, a
complete discontinuance by such an Employer of the contributions otherwise
required of it hereunder shall be deemed automatically to constitute a
withdrawal of such Employer from the Plan. In the event of any such
withdrawal, the Trustee, as of the withdrawal date, shall take the following
action or actions for the benefit of the Participants and
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former Participants employed by or formerly employed by such withdrawing
Employer, or their Beneficiaries:
(a) The Trustee shall value and adjust as of such
withdrawal date the balances of the Separate Accounts and Distribution
Accounts of such Participants and former Participants, in the manner
provided in Section 7.2 with respect to a Valuation Date, including
any accrued income and expenses.
(b) The balances of the Separate Accounts, as
determined under paragraph (a), of each such Participant employed
solely by such withdrawing Employer, who is not transferred to or
continued in employment with any other Employer or any Related
Corporation, shall be transferred to Distribution Accounts, and the
Trustee shall thereafter hold such Distribution Accounts for the
benefit of such Participant, on a nonforfeitable basis, and it shall
dispose of the same in accordance with the provisions of Article IX.
The interest of any Participant employed by such withdrawing Employer,
who is transferred to or continued in employment with any other
Employer or any Related Corporation, shall remain unaffected by such
withdrawal, and he shall continue as a Participant hereunder.
13.5 Special Rules Relating to Distribution Upon
Termination of Plan or Disposition of Assets or Subsidiary. Notwithstanding
anything to the contrary contained in this Agreement, in the event the Plan is
terminated or an Employer disposes of assets or a subsidiary, no distribution
shall be made from the Plan to a Participant prior to his separation from
service, other than a withdrawal made in accordance with Article VIII, except
upon the occurrence of one of the following events:
(a) The termination of the Plan without
establishment or maintenance of another
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defined contribution plan (other than an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code).
(b) The disposition by an Employer of substantially
all of the assets (within the meaning of Section 409(d)(2) of the
Code) used by such Employer in a trade or business of such Employer,
but only with respect to an employee who continues employment with the
corporation acquiring such assets.
(c) The disposition by an Employer of such
Employer's interest in a subsidiary (with the meaning of Section
409(d)(3) of the Code), but only with respect to an employee who
continues employment with such subsidiary.
An event shall not be treated as described in this Section 13.5 with respect to
any employee unless the employee receives a lump sum distribution by reason of
the event. For purposes of this Section 13.5, the term "lump sum distribution"
has the meaning given such term by Section 402(e)(4) of the Code, without
regard to clauses (i), (ii), (iii), and (iv) of subparagraph (A), subparagraph
(B), or subparagraph (H) thereof. Moreover, an event shall not be treated as
described in paragraph (b) or (c) of this Section 13.5 unless the transferor
corporation continues to maintain the Plan after the disposition.
13.6 Corporation Reorganization. The merger,
consolidation, or liquidation of the Company, any Employer, or any Related
Corporation with or into the Company, any other Employer, or any other Related
Corporation
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shall not constitute a termination of the Plan as to the Company or such
Employer.
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ARTICLE XIV
ADOPTION BY RELATED CORPORATIONS
A Related Corporation, with the consent of the Board
of Directors of the Company and as of the first day of any Plan Year, may adopt
the Plan and become an Employer hereunder by causing an appropriate written
instrument evidencing such adoption to be executed pursuant to the authority of
its Board of Directors and filed with the Company and the Trustee.
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ARTICLE XV
TOP-HEAVY PROVISIONS
15.1 Applicability. Notwithstanding any other
provision to the contrary, in the event the Plan is deemed to be a top-heavy
plan for any Plan Year, the provisions contained in this Article XV with
respect to vesting and Employer Contributions shall be applicable with respect
to such Plan Year. In the event the Plan is determined to be a top-heavy plan
and upon a subsequent termination date is determined to no longer be a
top-heavy plan, the vesting and the Employer Contribution provisions in effect
immediately preceding the Plan Year in which the Plan was determined to be a
top-heavy plan shall again become applicable as of such subsequent
determination date; provided, however, that in the event such prior vesting
schedule does again become applicable, the provisions of Section 9.5 and
Section 13.2 shall apply (a) to preserve the nonforfeitable accrued benefit of
any Participant, former Participant, or Beneficiary and (b) to permit any
Participant with three years of vested service to elect to continue to have his
nonforfeitable interest in his Separate Accounts attributable to Employer
Contributions determined in accordance with the vesting schedule applicable
while the Plan was a top-heavy plan.
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15.2 Top-Heavy Definitions. For purposes of this
Article XV, the following definitions shall apply:
(a) The term "determination date" with respect to
any Plan Year shall mean the last day of the preceding Plan Year.
(b) The term "key employee" shall mean any
Participant or former Participant who is a key employee pursuant to
the provisions of Section 416(i)(1) of the Code and any Beneficiary of
such Participant or former Participant.
(c) The term "non-key employee" shall mean any
Participant who is not a key employee.
(d) The term "permissive aggregation group" shall
mean those plans included in an Employer's required aggregation group
in conjunction with any other plan or plans of an Employer, so long as
the entire group of plans would continue to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) The term "required aggregation group" shall
include (i) all plans of an Employer in which a key employee is a
participant, and (ii) all other plans of an Employer which enable a
plan described in (i) to meet the requirements of Section 401(a)(4) or
Section 410 of the Code.
(f) A "super top-heavy group" with respect to a
particular Plan Year shall mean a required or permissive aggregation
group that, as of the determination date, would qualify as a top-heavy
group under the definition in paragraph (h) of this Section 15.2 with
"90 percent" substituted for "60 percent" each place where "60
percent" appears in such definition.
(g) The term "super top-heavy plan" with respect to
a particular Plan Year shall mean a plan that, as of the determination
date, would qualify as a top-heavy plan under the definition in
paragraph (i) of this Section 15.2 with "90 percent" substituted for
"60 percent" each place where "60 percent" appears in such definition.
A plan shall also be a "super top-heavy plan" if it is part of a super
top-heavy group.
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(h) The term "top-heavy group" with respect to a
particular Plan Year shall mean a required or a permissive aggregation
group if the sum, as of the determination date, of the present value
of the cumulative accrued benefits for key employees under all defined
benefit plans included in such group and the aggregate of the account
balances of key employees under all defined contribution plans
included in such group exceeds 60 percent of a similar sum determined
for all employees covered by the plans included in such group.
(i) The term "top-heavy plan" with respect to a
particular Plan Year shall mean (i) in the case of a defined
contribution plan, a plan for which, as of the determination date, the
aggregate of the accounts (within the meaning of Section 416(g) of the
Code and the regulations thereunder) of key employees exceeds 60
percent of the aggregate of the accounts of all participants under the
plan, with the accounts valued as of the applicable valuation date, or
(ii) in the case of a defined benefit plan, a plan for which, as of
the determination date, the present value of the cumulative accrued
benefits payable under the plan (within the meaning of Section 416(g)
of the Code and the regulations thereunder) to key employees exceeds
60 percent of the present value of the cumulative accrued benefits
under the plan for all employees, with present value of accrued
benefits to be determined as of the applicable valuation date in
accordance with the actuarial assumptions specified in such defined
benefit plan, and (iii) any plan included in a required aggregation
group which is a top-heavy group. For purposes of this paragraph (i),
the accounts and accrued benefits of any employee who has not
performed services for an Employer during the five-year period ending
on the determination date shall be disregarded. Notwithstanding the
foregoing, if a plan is included in a required or permissive
aggregation group which is not a top-heavy group, such plan shall not
be a top-heavy plan. The term "valuation date" with respect to each
determination date shall mean the most recent date used for computing
plan costs for minimum funding purposes in the case of a defined
benefit plan and the most recent date on which plan assets are
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valued for the purpose of determining the value of account balances in
the case of a defined contribution plan.
(j) The term "compensation" shall mean compensation
as described in paragraph (b) of Section 7.4.
15.3 Accelerated Vesting. In the event the Plan is
determined to be a top-heavy plan, a Participant shall have a vested interest
in the balances of his Separate Accounts determined no less rapidly than by
application of the following vesting schedule:
<TABLE>
<CAPTION>
Nonforfeitable
Years of Vested Service Percentage
----------------------- --------------
<S> <C>
Less than one 0%
One but less than two 10%
Two but less than three 20%
Three but less than four 40%
Four but less than five 60%
Five or more 100%
</TABLE>
15.4 Minimum Employer Contribution. In the event the
Plan is determined to be a top-heavy plan, effective for Plan Years beginning
on and after January 1, 1989, the Employer Contributions allocated to the
Separate Accounts of each non-key employee who is not separated from service
with an Employer as of the end of such Plan Year shall be no less than the
lesser of (a) three percent of his compensation or (b) the largest percentage
of compensation that is allocated for such Plan Year to the Separate Accounts
of any key employee attributable to Employer Contributions and Tax Deferred
Compensation Contributions,
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except that, in the event the Plan is part of a required aggregation group, and
the Plan enables a defined benefit plan included in such group to meet the
requirements of Section 401(a)(4) or 410 of the Code, the minimum allocation of
Employer Contributions to the Separate Accounts of each non-key employee shall
be three percent of the compensation of such non-key employees. Any minimum
allocation to the Separate Accounts of a Participant required by this Section
15.4 shall be made without regard to any social security contribution made by
an Employer on behalf of the Participant, and for this purpose an Eligible
Employee shall be deemed to be a Participant notwithstanding his failure to
make an election described in Section 2.2. Notwithstanding the minimum
top-heavy allocation requirements of this Section 15.4, in the event that the
Plan is a top-heavy plan, each non-key employee hereunder who is also covered
under a top-heavy defined benefit plan maintained by an Employer will receive
the top-heavy benefits provided for under such defined benefit plan equal to
his average compensation during the testing period multiplied by the lesser of
two percent times years of service with the Employers or twenty percent, all as
described in such plan, in lieu of the minimum top-heavy allocation under the
Plan.
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15.5 Adjustments to Section 415 Limitations.
Notwithstanding the provisions of paragraph (d) of Section 7.4, in the event
that the Plan is a top-heavy plan and an Employer maintains a defined benefit
plan covering some or all of the employees that are covered by the Plan,
Sections 415(e)(2)(B) and 415(e)(3)(B) of the Code shall be applied to the Plan
by substituting "1.0" for "1.25" and Section 415(e)(6)(B)(i) of the Code shall
be applied to the Plan by substituting "$41,500" for "$51,875", except that
such substitutions shall not be applied to the Plan if (a) the Plan is not a
super top-heavy plan, (b) the Employer Contribution for such Plan Year for each
non-key employee is not less than four percent of such non-key employee's
compensation, and (c) every non-key employee who receives his minimum benefit
under a defined benefit plan receives a benefit which is not less than his
average compensation for years in the testing period multiplied by the lesser
of three percent times years of service with such employer or thirty percent,
all as described in such defined benefit plans.
15.6 Compensation Taken Into Account. The annual
compensation of any Participant to be taken into account under the Plan during
any Plan Year in which the Plan is determined to be a top-heavy plan shall not
exceed
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$200,000 (or such adjusted amount determined by the Secretary of the Treasury
pursuant to Section 416(d)(2) of the Code).
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ARTICLE XVI
ROLLOVERS
16.1 Rollover Contributions. A Participant who prior
to his employment with an Employer was a participant in a plan maintained by a
previous employer and qualified under Section 401 of the Code and who receives
a distribution from such plan that he either elects (i) to roll over
immediately to a qualified retirement plan or (ii) to roll over into a conduit
IRA from which he receives a later distribution, may elect to make a Rollover
Contribution to the Plan if he is entitled under Section 402(a)(5) of the Code
to roll over such distribution to another qualified retirement plan. A
Participant shall make a Rollover Contribution to the Plan by delivering, or
causing to be delivered, to the Trustee the property which constitutes such
Rollover Contribution amount within 60 days of receipt of the distribution from
the plan or from the conduit IRA in such manner as shall be specified by the
Company.
16.2 Administration. Notwithstanding anything to the
contrary contained in the Agreement, all Rollover Contributions received by the
Trustee shall be held and administered by the Trustee in accordance with the
provisions of this Article XVI. Upon receipt of any Rollover Contribution, the
Trustee shall credit the appropriate
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Separate Account of the Participant to whom it is attributable in accordance
with the provisions of Section 5.1 with the fair market value of the property
that constitutes the Rollover Contribution on such date, and such property
shall be deposited in the Trust. The determination of the fair market value of
such property shall be made by the Trustee, subject to the provisions of
Section 7.2. The Participant's interest in his Separate Account to which any
Rollover Contributions have been credited shall at all times be fully vested.
16.3 Rollover Contributions not Considered for
Certain Plan Purposes. Separate Accounts to which any Rollover Contributions
have been credited shall not be aggregated with the other Separate Accounts
maintained under the Plan for purposes of determining whether the Plan is top
heavy within the meaning of paragraph (i) of Section 15.2, except that amounts
contained in a Separate Account that are attributable to any Rollover
Contributions made from a plan maintained by an Employer or a Related
Corporation shall be aggregated with the other Separate Accounts maintained
under the Plan for purposes of determining whether the Plan is top heavy.
16.4 Settlement or Termination. A Participant's
interest in his Separate Account to which any Rollover Contributions have been
credited shall, upon his
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<PAGE> 108
Settlement Date or in the event of termination of the Plan, be distributed at
such time and according to such method as is provided generally in the
Agreement with respect to such settlement or termination, as the case may be.
-102-
<PAGE> 109
ARTICLE XVII
MISCELLANEOUS PROVISIONS
17.l No Commitment as to Employment. Nothing herein
contained shall be construed as a commitment or agreement upon the part of any
Participant hereunder to continue his employment with an Employer, and nothing
herein contained shall be construed as a commitment on the part of an Employer
to continue the employment or rate of compensation of any Participant hereunder
for any period.
17.2 Benefits. Nothing in this Agreement shall be
construed to confer any right or claim upon any person other than the parties
hereto, Participants, former Participants, and Beneficiaries.
17.3 No Guarantees. Neither any Employer, nor the
Trustee guarantees the Trust from loss or depreciation, nor the payment of any
amount which may become due to any person hereunder.
17.4 Precedent. Except as otherwise specifically
provided, no action taken in accordance with this Agreement by the Company, any
other Employer, or the Trustee shall be construed or relied upon as a precedent
for similar action under similar circumstances.
17.5 Duty to Furnish Information. Each of the
Company, any other Employer, or the Trustee shall furnish to any of the others
any documents, reports, returns,
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<PAGE> 110
statements, or other information that any of the others reasonably deem
necessary to perform its duties imposed hereunder or otherwise imposed by law.
17.6 Withholding. The Trustee shall withhold any tax
which by any present or future law is required to be withheld and which the
Company notifies the Trustee in writing is to be so withheld, from any payment
to any Participant, former Participant, or Beneficiary hereunder, unless an
Employer shall have notified the Trustee in writing to the effect that such
Employer has withheld such tax.
17.7 Merger, Consolidation, or Transfer of Plan
Assets. The Plan shall not be merged or consolidated with any other plan, nor
shall any of its assets or liabilities be transferred to another plan, unless,
immediately after such merger, consolidation, or transfer of assets or
liabilities, each Participant in the Plan would receive a benefit under the
Plan which is at least equal to the benefit he would have received immediately
prior to such merger, consolidation, or transfer of assets or liabilities
(assuming in each instance that the Plan had then terminated).
17.8 Conditions and Limitations on Employer
Contributions. Notwithstanding anything to the contrary contained in this
Agreement, any obligation of any Employer
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<PAGE> 111
to make any contribution hereunder is hereby conditioned upon the continued
qualification of the Plan under Section 401(a) of the Code, the exempt status
of the Trust under Section 501(a) of the Code, and the deductibility of the
contribution under Section 404 of the Code. The Plan is designated as and
designed to qualify as a profit-sharing plan for all purposes of the Code,
although all contributions to the Plan by the Employers may be made without
regard to current or accumulated earnings and profits for the taxable year or
years ending with or within any Plan Year.
17.9 Return of Contributions to Employer. Except as
otherwise provided herein, in no event shall any portion of the Trust property
ever revert to or otherwise inure to the benefit of any Employer or any Related
Corporation. Notwithstanding anything to the contrary contained in the
Agreement, Employer Contributions and Tax Deferred Compensation Contributions:
(a) made under a mistake of fact, or
(b) the deduction of which under Section 404 of the
Code is disallowed, or
(c) with respect to which the Plan does not qualify
under Section 401(a) of the Code or the Trust is not exempt under
Section 501(a) of the Code (but only if such contribution is made
prior to December 22, 1987),
may be returned to the Employer by which made within one year after the payment
of the contribution, the
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<PAGE> 112
disallowance of the deduction to the extent disallowed, or the date of denial
of the qualification of the Plan or the exempt status of the Trust in
connection with an amendment, whichever is applicable. Any Tax Deferred
Compensation Contributions made on behalf of a Participant and returned to an
Employer pursuant to this Section 17.9 shall be distributed to such
Participant.
17.10 Back Pay Awards. The provisions of this
Section 17.10 shall apply only to an Employee or former Employee who becomes
entitled to back pay by an award or agreement of an Employer without regard to
mitigation of damages. For all purposes of the Plan, the years of service and
years of vested service of a person to whom this Section 17.10 applies for the
period to which such award or agreement relates shall include the number of
years, computed to the nearest 1/12th year, to which such award or agreement
relates unless such years are otherwise included in his years of service for
such period under Section 2.5 and, as applicable, in his years of vested
service for such period under Section 9.4. If a person to whom this Section
17.10 applies was or, after application of the foregoing provisions of this
Section 17.10, would have become an Eligible Employee during such period, and
if any such person who had not previously become a Participant pursuant to
Section 2.2 shall, within 30 days
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<PAGE> 113
of the date he receives notice of the provisions of this Section 17.10, make an
election to become a Participant in accordance with such Section 2.2
(retroactive to any Enrollment Date as of which he was or has become eligible
to do so), then any Regular Participant Contributions or Tax Deferred
Compensation Contributions which he previously had not made but which, after
application of the foregoing provisions of this Section 17.10, he would have
made under the provisions of Article II or Article III as in effect during each
of the months to which such award or agreement relates, if such Participant so
elects, shall be made out of the proceeds of such back pay award or agreement.
To the extent that any Regular Participant Contributions or Tax Deferred
Compensation Contributions are made during a month in accordance with the
provisions of the foregoing sentence, such Employer shall make an Employer
Contribution for such month, in addition to any other Employer Contribution for
such month, equal to the amount of the Employer Contribution which would have
been allocated to such Participant under the provisions of Article IV as in
effect during each of the months to which such Regular Participant
Contributions or Tax Deferred Compensation Contributions relate. The amounts
of such additional contributions shall:
(a) be credited to such Participant's Separate
Accounts, as appropriate, if such person
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<PAGE> 114
is a Participant when the award or agreement is made or becomes a
Participant as a result of the provisions of this Section 17.10; or
(b) if such person is a former Participant whose
Settlement Date occurred under Section 9.1 before the award or
agreement is made, be credited to his Distribution Accounts; moreover,
if a portion of such former Participant's Separate Accounts
attributable to Employer Contributions was not credited to his
Distribution Accounts under Section 9.3 as of his Settlement Date, the
amount of the additional Employer Contribution for him shall include
an amount equal to the difference, if any, between (i) the amount
which would have been so credited after application of the provisions
of this Section 17.10, and (ii) the amount which was so credited.
Any contributions made by such Participant and by the Employer pursuant to this
Section 17.10 shall be made in accordance with, and subject to the limitations
of, the applicable provisions of Articles III, IV, and VII.
17.11 Validity of Agreement. The validity of this
Agreement shall be determined and this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio. The invalidity
or illegality of any provision of this Agreement shall not affect the legality
or validity of any other part thereof.
17.12 Parties Bound. This Agreement shall be binding
upon the Company, any other Employer, the Trustee, all Participants, former
Participants, and Beneficiaries hereunder, and, as the case may be, the heirs,
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<PAGE> 115
executors, administrators, successors, and assigns of each of them.
* * *
IN WITNESS WHEREOF, the parties hereto, each by its
duly authorized officers, have caused this Agreement to be executed as of the
day and year first above written.
<TABLE>
<S> <C>
OGLEBAY NORTON COMPANY
By /s/ H. William Ruf
----------------------------
Title: Vice President -
Personnel and
Industrial
Relations
And /s/ Richard J. Kessler
----------------------------
Title: Vice President -
Finance and
Treasurer
SOCIETY NATIONAL BANK,
Trustee
By /s/ Mark O. Minar
----------------------------
Title: Senior Trust Officer
And /s/ Richard Lutts
----------------------------
Title: Vice President
</TABLE>
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<PAGE> 1
Exhibit 10(d)
CONFORMED COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into on this ________ day of June,
1987, by and between OGLEBAY NORTON COMPANY, a Delaware corporation (the
"Company"), and JOHN L. SELIS ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for many years served the Company as an executive
officer, has fully and ably discharged his responsibilities and duties in his
service to the Company to date, and is now serving the Company as Vice
President-Administration and Law;
WHEREAS, the Company desires to assure itself of continuity of management
in the event of any threatened or actual Change in Control (as hereafter
defined);
WHEREAS, the Company desires to provide inducements for Employee not to
engage in activity competitive with the Company;
WHEREAS, the Company desires to assure itself, in the event of any
threatened or actual Change in Control, of the continued performance of
services by Employee on an objective and impartial basis and without
distraction by concern for his employment status and security;
WHEREAS, Employee is willing to continue in the employ of the Company but
desires assurance that his responsibilities and status as an executive of the
Company will not be
<PAGE> 2
adversely affected by any threatened or actual Change in Control;
NOW, THEREFORE, the Company and Employee agree as follows:
1. Operation of Agreement. This Agreement shall be effective and
binding immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement shall not be operative unless and
until there has been a Change in Control while Employee is in the employ of the
Company. For purposes of this Agreement, a Change in Control shall have
occurred if at any time any of the following events occurs:
(a) a report is filed with the Securities and Exchange Commission (the
"SEC") on Schedule 13D or Schedule 14D-1 (or any successor schedule, form, or
report), each as promulgated pursuant to the Securities Exchange Act of 1934
(the "Exchange Act"), disclosing that any "person" (as the term "person" is
used in Section 13(d) or Section 14(d)(2) of the Exchange Act) is or has
become a beneficial owner, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;
(b) the Company files a report or proxy statement with the SEC pursuant
to the Exchange Act disclosing in response to Item 1 of Form 8-K thereunder
or Item 5(f) of Schedule 14A thereunder that a Change in Control of the
<PAGE> 3
Company has or may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction;
(c) the Company is merged or consolidated with another corporation and,
as a result thereof, securities representing less than 50% of the combined
voting power of the surviving or resulting corporation's securities (or of
the securities of a parent corporation in case of a merger in which the
surviving or resulting corporation becomes a wholly-owned subsidiary of the
parent corporation) are owned in the aggregate by holders of the Company's
securities immediately prior to such merger or consolidation;
(d) all or substantially all of the assets of the Company are sold in a
single transaction or a series of related transactions to a single purchaser
or a group of affiliated purchasers; or
(e) during any period of 24 consecutive months, individuals who were
Directors of the Company at the beginning of such period cease to constitute
at least a majority of the Company's Board of Directors (the "Board") unless
the election, or nomination for election by the Company's shareholders, of
more than one half of any new Directors of the Company was approved by a vote
of at least two-thirds of the Directors of the Company then still in office
who were Directors of the Company at the beginning of such 24 month period.
<PAGE> 4
The first date on which a Change in Control occurs is referred to herein as the
"Change in Control Date." Upon the occurrence of a Change in Control while
Employee is in the employ of the Company, this Agreement shall become
immediately operative.
2. Employment, Contract Period.
(a) Subject to the terms and conditions of this Agreement, upon the
occurrence of a Change in Control, the Company shall continue to employ
Employee and Employee shall continue in the employ of the Company for the
period specified in Paragraph 2(b) (the "Contract Period"), in the position
and with the duties and responsibilities set forth in Paragraph 3.
(b) The Contract Period shall commence on the date of occurrence of a
Change in Control (the "Change in Control Date") and, subject only to the
provisions of Paragraph 8 below, shall continue for a period of thirty months
to the close of business on the day (the "Contract Expiration Date") falling
thirty months after the Change in Control Date.
3. Position, Duties, Responsibilities. At all times during the Contract
Period, Employee shall:
(a) hold the same position with substantially the same duties and
responsibilities as an executive officer of the Company as Employee held
immediately before the Change in Control Date and as those duties and
responsibilities may be extended, from time to time during the Contract
Period, by the Board with Employee's consent;
<PAGE> 5
(b) adhere to and implement the policies and directives promulgated, from
time to time, by the Board;
(c) observe all Company policies applicable to executive officers of the
Company; and
(d) devote his business time, energy, and talent to the business of and
to the furtherance of the purposes and objectives of the Company to generally
the same extent as he has so devoted his business time, energy, and talent
before the Change in Control Date, and neither directly nor indirectly render
any business, commercial, or professional services to any other person, firm,
or organization for compensation without the prior approval of the Board.
Nothing in this Agreement shall preclude Employee from devoting reasonable
periods of time to charitable and community activities or the management of his
investment assets provided such activities do not materially interfere with the
performance by Employee of his duties hereunder.
<PAGE> 6
4. COMPENSATION. For services actually rendered by Employee on behalf of
the Company during the Contract Period as contemplated by this Agreement the
Company shall pay to Employee a base salary at a rate equal to the highest of
(a) the rate in effect immediately before the Change in Control Date, (b) the
rate in effect exactly two years before the Change in Control Date, or (c) such
greater rate as the Company may determine. The base salary shall be paid to
Employee in the same increments and on the same schedule each month as in
effect immediately before the Effective Date. Employee shall not be entitled
to any base salary during any period when he is receiving long-term disability
benefits under the Disability Benefit Arrangement provided to Employee by the
Company.
5. VACATION. Employee will be entitled to such periods of vacation and
sick leave allowance each year as are determined by the Company's vacation and
sick leave policy for executive officers as in effect immediately before the
Change in Control Date or as may be increased from time to time thereafter.
Neither vacation time nor sick leave allowance will be accumulated from year to
year.
6. OTHER COMPANY PLANS, BENEFITS, AND PERQUISITES. During the Contract
Period Employee shall be entitled to participate in the Company's Pension Plan
for Salaried Employees (the "Salaried Plan") and the related Excess Benefit
Retirement Plan (the "Excess Benefit Plan"); the Salary Continuation
Arrangement; the Disability Benefit Arrangement; his Split Dollar Insurance
Agreement with the Company; the post-retirement Death Benefit Arrangement; the
Incentive Savings Plan; the 1983 Stock Equivalent Plan; and every other
employee benefit plan not specifically referred to in this Agreement that is
generally available to executive officers of the Company immediately before the
Change in Control Date. Employee's participation in and benefits under any
such plan shall be on the terms and subject to the conditions specified in the
governing document of the particular plan as in effect immediately before the
Change in
<PAGE> 7
Control Date, which terms and conditions shall not be amended during the
Contract Period unless the benefits to Employee are at least as great under the
plan as amended (or under a substitute plan or arrangement) as were the
benefits under the plan as in effect immediately before the Change in Control
Date. The Company will also provide Employee with such perquisites during the
Contract Period as the Company customarily provided to its top executive
officers in the period immediately before the Change in Control Date.
7. Effect of Disability. If during the Contract Period and before his
employment hereunder is otherwise terminated, Employee becomes disabled to
such an extent that he is prevented from performing his duties hereunder by
reason of physical or mental incapacity: (a) he shall be entitled to
disability and other benefits at least equal to those that would have been
available to him had the Company continued, throughout the period of Employee's
disability, all of its programs, benefits, and policies with respect to
disabled employees that were in effect immediately before the Change in
Control; and (b) if he recovers from his disability before the end of the
Contract Period he shall be reinstated as an active employee for the remainder
of the Contract Period under and subject to all of the terms of this Agreement
including, without limitation, the Company's right to terminate Employee with
or without cause under Paragraph 8(b).
8. Termination Following a Change in Control. Following a Change in
Control:
<PAGE> 8
(a) Employee's employment hereunder will terminate without further notice
upon the death of Employee;
(b) The Company may terminate Employee's employment hereunder effective
immediately upon giving notice of such termination;
(i) For "cause," (A) if Employee commits an act of fraud, embezzlement,
theft, or other similar criminal act constituting a felony and involving the
Company's business or (B) if Employee breaches his agreement with respect to
the time to be devoted to the business of the Company set forth in Paragraph
3(d) hereof and fails to cure such breach within 30 days of receipt of
written notice of such breach from the Board; or
(ii) without cause at any time; and
(c) Employee may terminate his employment hereunder effective immediately
upon giving of notice of such termination:
(i) without cause at any time; or
(ii) for "good reason," which, for purposes of this Agreement shall mean
the occurrence of any of the following:
<PAGE> 9
(A) any reduction in base salary or position or any material reduction in
responsibilities or duties contemplated for Employee under this Agreement or
any material reduction in the aggregate of employee benefits, perquisites, or
fringe benefits contemplated for Employee under this Agreement, provided that
any particular reduction described in this clause (A) shall constitute "good
reason" only if Employee terminates his employment within six months of the
date of the reduction; or
(B) any good faith determination by Employee that, as a result of
fundamental differences of opinion between Employee and the Board as to the
goals of the Company, Employee is unable to carry out the responsibilities
and duties contemplated for Employee under this Agreement, provided that any
determination by Employee described in this clause (B) shall constitute "good
reason" only if Employee terminates his employment within six months of the
Change in Control Date.
9. SEVERANCE COMPENSATION.
(a) If, before the Contract Expiration Date, Employee's employment is
terminated by the Company without cause or by Employee for good reason, then,
except as provided in Paragraph 9(b), 9(c), or 9(d), the Company shall pay
and provide to Employee the following compensation and benefits through the
last to occur of (x) the expiration of six months after the effective date of
the termination, and (y) the Contract Expiration Date (such last-to-occur
date is hereinafter referred to as the "Severance Benefits Termination
Date"):
(i) base salary at the highest monthly rate payable to Employee during
the Contract Period, to be paid at the times provided in Paragraph 4 hereof;
<PAGE> 10
(ii) coverage under the Company's medical insurance plan, short-term
disability plan, long-term disability plan, Salary Continuation Arrangement,
Disability Benefit Arrangement, Split Dollar Insurance Agreement, and
post-retirement Death Benefit Arrangement, each as in effect on the Change in
Control Date (or, if subsequently amended to increase benefits to Employee or
his dependents, as so amended) and each as if Employee's employment had
continued through the Severance Benefits Termination Date; and
(iii) coverage and service credit under the Salaried Plan and the Excess
Benefit Plan so that the aggregate benefits payable to or with respect to
the Employee under the Salaried Plan and the Excess Benefit Plan will be
equal to the aggregate benefits that would have been paid to or with respect
to Employee under the Salaried Plan and the Excess Benefit Plan if
Employee's employment had continued through the Severance Benefits
Termination Date.
<PAGE> 11
If any of the benefits to be provided under one or more of the plans,
agreements, or arrangements specified above cannot be provided through that
plan, agreement, or arrangement to Employee following termination of his
employment, the Company shall directly provide the full equivalent of such
benefits to Employee. For example, since it is not possible to provide
additional service credit directly through the Salaried Plan, if Employee
becomes entitled to an additional 18 months of service credit under the
Salaried Plan pursuant to (iii) above, the Company will be required to pay to
Employee, from its general assets, on each date on which Employee receives a
payment from the Salaried Plan, a supplemental payment equal to the amount by
which that particular payment under the Salaried Plan would have been increased
if Employee's total service credit under the Salaried Plan were 18 months
greater than is actually the case. In addition, if in these circumstances any
payments become due under the Salaried Plan with respect to Employee following
his death, the Company will be obligated to make similar supplemental payments
with respect to Employee on the dates on which payments are made with respect
to Employee under the Salaried Plan.
(b) If Employee becomes entitled to compensation and benefits pursuant to
Paragraph 9(a) he shall use reasonable efforts to seek other employment,
provided, however, that he shall not be required to accept a position of less
importance and dignity or of substantially different character than that of his
position with the Company or a position that would require Employee to engage
in activity in violation of Employee's agreement with respect to noncompetition
set forth in Paragraph 11 hereof nor shall he be required to accept a position
outside the greater Cleveland area. The Company's obligations under items (i)
and (ii) of Paragraph 9(a) will be offset by payments and benefits received by
Employee from another employer to the following extent:
(i) The Company's obligation to pay any particular installment of base
salary following Employee's termination will be offset, on a dollar for
dollar basis, by any cash
<PAGE> 12
compensation received by Employee from another employer before the date on
which the installment of base salary is payable by the Company.
(ii) To the extent that Employee is provided medical, dental, or
short-term or long-term disability income protection benefits by another
employer during any period, the Company will be relieved of its obligation to
provide such benefits to Employee. For example, if a new employer provides
Employee with a medical benefits plan that pays $500.00 for a specific claim
made by Employee and the Company's medical insurance plan would have paid
$750.00 for that claim, then the Company will be obligated to pay Employee
$250.00 with respect to that claim.
Other than as provided in this Paragraph 9(b) Employee shall have no duty to
mitigate the amount of any payment or benefit provided for in this Agreement.
(c) If during any period in which Employee is entitled to payments or
benefits from the Company under Paragraph 9(a):
(i) Employee materially and willfully breaches his agreement with respect
to confidential information set forth in Paragraph 10 hereof and such breach
directly causes the Company substantial and demonstrable damage; or
(ii) Employee materially and willfully breaches his agreement with respect
to noncompetition set forth in
<PAGE> 13
Paragraph 11 hereof and such breach directly causes the Company substantial
and demonstrable damage; then the Company will be relieved of its obligations
under Paragraph 9(a) hereof as of the first day of the month immediately
following the date of such material breach.
(d) If Employee dies on or before the Severance Benefits Termination Date
and immediately before his death he is entitled to payments or benefits from
the Company under Paragraph 9(a), the Company will be relieved of its
obligations under item (i) of Paragraph 9(a) as of the first day of the month
immediately following the month in which Employee dies and thereafter the
company will provide to Employee's beneficiaries and dependents salary
continuation payments, benefits under the Excess Benefits Plan (as supplemented
by item (iii) of Paragraph 9(a)), and continuing medical and dental benefits to
the same extent (subject to reduction for payments or benefits from a new
employer under Paragraph 9(b)) as if Employee's death had occurred while
Employee was in the active employ of the Company.
10. CONFIDENTIAL INFORMATION. Employee agrees that he will not, during
the term of the Agreement or at any time thereafter, either directly or
indirectly, disclose or make known to any other person, firm, or corporation
any confidential information, trade secret, or proprietary information of the
Company that Employee may acquire in the performance of Employee's duties
hereunder. Upon the termination of Employee's employment with the Company,
Employee agrees to deliver forthwith to the
<PAGE> 14
Company any and all literature, documents, correspondence, and other materials
and records furnished to or acquired by Employee during the course of such
employment.
11. NONCOMPETITION. During any period in which Employee is receiving
base salary under this Agreement (whether during the Contract Period pursuant
to Paragraph 4 or following termination pursuant to Paragraph 9(a)), Employee
shall not act as a proprietor, investor, director, officer, employee,
substantial stockholder, consultant, or partner in any business engaged to a
material extent in direct competition with the Company in any market in any
line of business engaged in by the Company during the Contract period. If
Employee delivers to the Company a written waiver of his right to receive any
further compensation or benefits pursuant to Paragraph 9(a), he shall be
released, effective as of the date of delivery of the notice, from the
post-termination noncompetition covenant contained in this Paragraph 11.
12. COSTS OF ENFORCEMENT. The Company shall pay and be solely
responsible for any and all costs and expenses (including attorneys' fees)
incurred by Employee in seeking to enforce the Company's obligations under this
Agreement unless and to the extent a court of competent jurisdiction determines
that the Company was relieved of those obligations because (a) the Company
terminated Employee for cause (as determined under Paragraph 8(b)(i) hereof),
(b) Employee voluntarily terminated his employment other than for good reason
(as determined under Paragraph 8(c)(ii) hereof), or (c) Employee materially and
willfully breached his
<PAGE> 15
agreement not to compete with the Company or his agreement with respect to
confidential information and such breach directly caused substantial and
demonstrable damage to the Company. The Company shall forthwith pay directly
or reimburse Employee for any and all such costs and expenses upon presentation
by Employee or by counsel selected from time to time by Employee of a statement
or statements prepared by Employee or by such counsel of the amount of such
costs and expenses. If and to the extent a court of competent jurisdiction
renders a final binding judgment determining that the Company was relieved of
its obligations for any of the reasons set forth in (a), (b), or (c) above,
Employee shall repay the amount of such payments or reimbursements to the
Company. In addition to the payment and reimbursement of expenses of
enforcement provided for in this Paragraph 12, the Company shall pay to
Employee in cash, as and when the Company makes any payment on behalf of, or
reimbursement to, Employee, an additional amount sufficient to pay all federal,
state, and local taxes (whether income taxes or other taxes) incurred by
Employee as a result of (x) payment of the expense or receipt of the
reimbursement, and (y) receipt of the additional cash payment. The Company
shall also pay to Employee interest (calculated at the Base Rate from time to
time in effect at National City Bank, Cleveland, Ohio, compounded monthly) on
any payments or benefits that are paid or provided to Employee later than the
date on which due under the terms of this Agreement.
13. EMPLOYMENT RIGHTS. Nothing expressed or implied in this Agreement
shall create any right or duty on the
<PAGE> 16
part of the Company or Employee to have Employee remain in the employ of the
Company before any Change in Control and Employee shall have no rights under
this Agreement if his employment with the Company is terminated for any reason
or for no reason before any Change in Control. Nothing expressed or implied in
this Agreement shall create any duty on the part of the Company to continue in
effect, or continue to provide to Employee, any plan or benefit unless and
until a Change in Control occurs. If, before a Change in Control, the Company
ceases to provide any plan or benefit to Employee, nothing in this Agreement
shall be construed to require the Company to reinstitute that plan or benefit
to Employee upon the later occurrence of a Change in Control.
14. NOTICES. For purposes of this Agreement, all communications provided
for herein shall be in writing and shall be deemed to have been duly given when
delivered or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the Company (Attention:
President) at its principal executive office and to Employee at his principal
residence, or to such other address as either party may have furnished to the
other in writing and in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
15. ASSIGNMENT, BINDING EFFECT.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the Company and the Company's successors and assigns. The Company shall
require any
<PAGE> 17
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and or assets of the
Company, by agreement in form and substance satisfactory to Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
(b) This Agreement shall be binding upon Employee and this Agreement and
all rights of Employee hereunder shall inure to the benefit of, and be
enforceable by, Employee and his personal or legal representatives,
executors, or administrators. No right, benefit, or interest of Employee
hereunder shall be subject to assignment, anticipation, alienation, sale,
encumbrance, charge, pledge, hypothecation, or to execution, attachment,
levy, or similar process; except that Employee may assign any right, benefit,
or interest hereunder if such assignment is permitted under the terms of any
plan or policy of insurance or annuity contract governing such right,
benefit, or interest.
16. INVALID PROVISIONS.
(a) Any provision of this Agreement that is prohibited or unenforceable
shall be ineffective to the extent, but only to the extent, of such
prohibition or unenforceability without invalidating the remaining portions
hereof and such remaining portions of this Agreement shall continue to be in
full force and effect.
<PAGE> 18
(b) In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable, the parties will negotiate in good
faith to replace such provision with another provision that will be valid or
enforceable and that is as close as practicable to the provision held invalid
or unenforceable.
17. MODIFICATION. No modification, amendment, or waiver of any of the
provisions of the Agreement shall be effective unless in writing, specifically
referring hereto, and signed by both parties.
18. WAIVER OF BREACH. The failure at any time to enforce any of the
provisions of this Agreement or to require performance by the other party of
any of the provisions of this Agreement shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part of this Agreement or the right of either party thereafter to enforce
each and every provision of this Agreement in accordance with the terms hereof.
19. GOVERNING LAW. This Agreement has been made in and shall be governed
and construed in accordance with the laws of the State of Ohio.
20. LIMITATION ON CONTINGENT PAYMENTS. Notwithstanding any other
provision of this Agreement to the contrary, amounts and benefits to be paid
and provided by the Company to Executive under this Agreement ("Agreement
Benefits") shall be reduced if necessary to avoid the application of sections
<PAGE> 19
280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
to Agreement Benefits. This Paragraph 20 will be applicable to reduce
Agreement Benefits only if (a) without regard to this Paragraph 20, the
aggregate present value of the payments in the nature of compensation to (or
for the benefit of) Employee that are contingent on a Change in Control would
equal or exceed an amount equal to three times Employee's "base amount" (as
defined in section 280G of the Code) and if (b) reducing the aggregate present
value of such contingent payments by reducing Agreement Benefits would result
in a greater after-tax benefit to Employee from such contingent payments. If
the foregoing conditions are satisfied, the aggregate present value of all
Agreement Benefits will be limited to the maximum amount that can be paid
without equalling the threshold amount (three times Employee's base amount)
provided in section 280G(b)(2)(A)(ii) of the Code. If reductions in the amount
of Agreement Benefits are necessary to satisfy the limit stated in the
immediately preceding sentence, the reductions shall be made in the following
order:
(a) The present value of the obligation to pay base salary will be
reduced (but not to less than one half of the present value of that
obligation before reduction) by decreasing (but not by more than 50%) the
rate at which base salary is paid pursuant to Paragraph 9(a)(i). (No change
will be made in the timing of the payments of installments of base salary.)
<PAGE> 20
(b) The present value of the Salary Continuation Arrangement, of the
Disability Arrangement, and of the post-retirement Death Benefit Arrangement
will be reduced by reducing (to zero if necessary) the amount to be paid in
the future under each such arrangement upon the occurrence of certain events.
(No change will be made in the timing of any of such benefits, if any, that
are payable in spite of the reduction.)
(c) The present value of coverage under the Company's medical insurance
plan, short-term disability plan, and long-term disability plan will be
reduced by reducing the level of coverage under each such plan (to zero if
necessary).
(d) The present value of any obligation to pay base salary (as reduced
under item (a)) will be further reduced by decreasing the rate at which base
salary is paid pursuant to Paragraph 9(a)(i).
Agreement Benefits in each of the first three categories above, (a), (b), and
(c), respectively, will be reduced to zero (to 50% of the unreduced present
value in the case of the reduction in category (a) in the present value of the
obligation to pay base salary), if necessary, before any reduction is made in
any Agreement Benefits listed in a later category. At any time and from time
to time the Company and Employee may agree upon a different method of reduction
of any contingent payments to avoid the application of sections 280G and 4999
of the Code if the different method is not prohibited by regulations issued
under
<PAGE> 21
those sections of the Code. If the Company's obligation to pay any Agreement
Benefit is reduced by mitigation as provided in Paragraph 9(b) and, as a result
of that mitigation and reduction, the amounts of other Agreement Benefits that
have been reduced under this Paragraph 20 to avoid the application of sections
280G and 4999 of the Code can be restored in whole or in part without
triggering the application of those sections, the amount of those other
Agreement Benefits shall be so restored and paid by the Company to the maximum
extent possible without triggering the application of those sections. Except
as provided in either of the immediately preceding sentences, after contingent
payments having an aggregate present value equal to such maximum amount that
can be paid or provided without equalling the threshold amount have been paid
or provided, no further Agreement Benefits will be paid or provided by the
Company to Employee. For purposes of this Paragraph 20, contingent payments
include all payments and benefits in the nature of compensation to or for the
benefit of Employee that are required to be taken into account for purposes of
section 280G(b)(2)(A)(ii) of the Code. For purposes of this Paragraph 20, the
present value of Agreement Benefits shall be determined using the interest rate
prescribed by section 1274(b)(2) of the Code and applicable regulations and the
method described by section 280G(d)(4) of the Code and applicable regulations.
<PAGE> 22
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
on the day and year first above written.
OGLEBAY NORTON COMPANY
By: /s/ Renold D. Thompson
--------------------------
Renold D. Thompson, President
and Chief Executive Officer
/s/ John L. Selis
------------------------------
John L. Selis
(Employee)
<PAGE> 1
Exhibit 10(e)
RIGHT OF FIRST REFUSAL
The undersigned director and shareholder (the "Shareholder") of
Oglebay Norton Company, a Delaware corporation (the "Company"), in
consideration of similar grants by other directors of the Company, hereby
grants a right of first refusal with respect to the sale of Common Shares of
the Company (the "Common Shares") owned by him, upon the following terms and
conditions:
1. Right of First Refusal. Except as provided in Section 2, before
selling any Common Shares owned by him, or permitting any individual,
corporation or other entity that he controls or that is otherwise affiliated
with him (his "affiliate") to sell any Common Shares owned by his affiliate,
the Shareholder will notify the Company of the person proposing to purchase the
Common Shares and the price and other terms of the proposed sale. The Company
will have 30 days following its receipt of this notice to purchase the Common
Shares at the price and on the other terms set forth in the notice. If the
Company is not willing and able to complete the purchase within the 30-day
period, the Shareholder, or his affiliate, as the case may be, may sell the
Common Shares to the person, at the price, and on the other terms specified in
the notice, provided that the sale is completed within 60 days following the
end of the 30-day period.
2. Exceptions. The notice and right of first refusal referred to in
Section 1 will not apply to (a) sales made pursuant to a tender offer approved
or recommended by the Company's Board of Directors and (b) open-market sales of
not more than 1% of the outstanding Common Shares during any twelve month
period (provided that the open-market sale is not made to a person known by the
Shareholder to own more than 5% of the outstanding Common Shares at the time of
the sale).
3. Gifts and Bequests. The Shareholder will not, and will not permit
an affiliate of his to, give, bequeath, or otherwise transfer any Common Shares
without consideration unless the recipient of the Common Shares agrees to take
the Common Shares subject to the restrictions on transfer set forth in this
instrument.
4. Term of Restrictions on Transfer. The restrictions on transfer set
forth in this instrument will last for the longer of (a) the Shareholder's
tenure as a director of the Company and (b) five years from the date of this
instrument.
<PAGE> 2
5. Confidentiality. The Shareholder acknowledges that, because he is
a director of the Company, he must hold in confidence and may not disclose to
any person or use, except as may be required for the discharge of his duties as
a director, any trade secrets or other confidential information about the
Company that may come to his knowledge, including but not limited to technical
data or "know how," financial information, information relating to customers
and suppliers, business plans and forecasts, and other information relating to
the Company's assets and operations. When he ceases to be a director of the
Company, the Shareholder will deliver to the Company (a) all documents
containing such confidential information then in his possession and (b) all
other material then in his possession furnished to him by the Company in his
capacity as a director.
6. Miscellaneous. This instrument will be binding upon the
Shareholder, his assigns, executors, administrators, and personal
representatives; will be interpreted and enforced in accordance with the laws
of the State of Ohio; and represents the entire understanding on its subject
matter and supersedes all prior understandings. If any provision of this
instrument is held to be invalid, void, or unenforceable for any reason, the
remaining provisions will nevertheless continue to be in full force and effect.
IN WITNESS WHEREOF, the Shareholder has signed this instrument on July
26, 1989.
<TABLE>
<S> <C>
/s/ Malvin E. Bank
-------------------------------
The "Shareholder"
Also Signed By:
William G. Bares
Courtney Burton
A. M. Rankin
Herbert S. Richey
Renold D. Thompson
Fred R. White, Jr.
</TABLE>
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<PAGE> 1
Exhibit 10(f)
AGREEMENT
THIS AGREEMENT, entered into as of March 2, 1992, is
between OGLEBAY NORTON COMPANY, a Delaware corporation (the "Company"), and Mr.
John D. Weil ("Weil").
In consideration of the mutual covenants and
agreements contained in this Agreement, Weil and the Company agree as follows:
1. Definitions. For purposes of this Agreement, the
following terms will have the meanings set forth below:
(a) An "affiliate" of a person is another person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with that person. Weil's affiliates
are deemed to include (but are not limited to) the holders of shares identified
in Item 5 of Amendment No. 4 to Schedule 13D, dated February 17, 1992, signed
by Weil (the "Schedule 13D"); such inclusion does not, however, constitute a
representation or warranty by Weil that he in fact controls, is controlled by,
or is under common control with any of such persons. Weil's affiliates are
also deemed to include any trust to which Weil or any of his affiliates
transfers voting securities of the Company and of which the spouse, children,
or grandchildren of Weil or one of his affiliates, as the case may be, are the
beneficiaries.
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<PAGE> 2
(b) "Control," when used with respect to any person,
means the power to direct the management or policies of that person, either
directly or indirectly, whether through the ownership of voting securities, by
contract, or otherwise.
(c) "Person" includes (but is not limited to) any
individual, corporation, company, partnership, joint venture, group,
organization, plan, trust, or other entity.
(d) "Voting securities" means securities entitled to
vote in the election of directors and securities convertible into, or
exchangeable or exercisable for, such securities.
2. Confidentiality. From and after the date of this
Agreement, Weil will hold in confidence and will not disclose to any person or
use, except as may be required for the discharge of his duties as a director of
the Company, any Confidential Information. When Weil ceases to be a director
of the Company, he will forthwith deliver to the Company all documents
containing such Confidential Information then in his possession and all other
material then in his possession furnished to him by the Company in his capacity
as a director. As used herein, "Confidential Information" means any trade
secrets or other confidential information about the Company that may come to
his knowledge during the term of Weil's serving as a director of the Company,
including but not limited to
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<PAGE> 3
technical data or "know how," financial information, information relating to
customers and suppliers, business plans and forecasts, and other information
relating to the Company's assets and operations. Notwithstanding the above,
Confidential Information will not include any information which: (i) is in the
public domain or becomes generally available to the public through no wrongful
act of Weil, (ii) is contained in any public or governmental filings, including
without limitation any filings with the Securities and Exchange Commission or
any state securities authorities, or (iii) is disclosed to Weil by a party who
is not a director, officer, employee, or agent of the Company.
3. Standstill. During the Term of this Agreement (as
defined in Section 8), without the prior approval of a majority of the
Company's Board of Directors or except as required or authorized by the terms
of this agreement, Weil will not, and will cause his affiliates not to:
(a) acquire, directly or indirectly, alone or
together with his affiliates, "beneficial ownership" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of more than 11% of the
voting securities of the Company then outstanding; except that, if the
beneficial ownership of voting securities by Weil and his affiliates exceeds
11% of the outstanding voting securities solely by reason of the purchase by
the Company of
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<PAGE> 4
outstanding voting securities, Weil and his affiliates will not be required to
dispose of voting securities to reduce their beneficial ownership to not more
than 11% of the voting securities then outstanding;
(b) except for taking action solely in his capacity
as a director of the Company and for the voting of voting securities of the
Company beneficially owned by him in accordance with the terms of this
Agreement, take, either alone or in concert with any other person, any action
that is designed to cause, or may have the effect of causing, a change in the
control, management, business or policies of the Company;
(c) act jointly with any person (other than the
holders of shares included in the Schedule 13D) in the acquisition, holding,
disposition, or voting of any voting securities of the Company;
(d) "solicit" or participate with others in the
solicitation of proxies with respect to voting securities of the Company in
opposition to the recommendation of a majority of the Company's Board of
Directors, or become a "participant" in opposition to the recommendation of a
majority of the Company's Board of Directors in an "election contest" relating
to the election of directors of the Company, as those terms are defined in
Regulation 14 under the Securities Exchange Act of 1934, as amended;
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<PAGE> 5
(e) initiate, propose, or support (except for taking
action solely in his capacity as a director of the Company and for the voting
of voting securities of the Company beneficially owned by him in accordance
with the terms of this Agreement) any stockholder proposal relating to the
Company that is not supported by a majority of the Company's Board of
directors, or induce or attempt to induce any other person to initiate or
propose any stockholder proposal relating to the Company that is not supported
by a majority of the Company's Board of Directors; or
(f) deposit any voting securities of the Company in
a voting trust, or subJect any such securities to a voting agreement or other
arrangement of similar effect; except that, Weil and his affiliates may deposit
any voting securities of the Company in a voting trust, or subject any such
securities to a voting agreement or other arrangement of similar effect, if
either (i) no securities other than those beneficially owned by Weil or any of
the holders of shares included in the Schedule 13D are subject to the voting
trust, voting agreement, or other arrangement or (ii) Weil retains sole voting
power with respect to all of the securities subject to the voting trust, voting
agreement, or other arrangement.
4. Sale of Voting Securities of the Company. During
the Term of this Agreement, without the prior approval of a majority of the
Company's Board of
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<PAGE> 6
Directors, Weil will not, and will cause his affiliates not to, dispose of any
voting securities of the Company, except:
(a) pursuant to a tender offer approved or
recommended by the Company's Board of Directors;
(b) in open-market sales during any three-month
period not exceeding 1% of the shares outstanding as shown by the most recent
Quarterly or Annual Report of the Company to the Securities and Exchange
Commission; provided that no such sale may be made if Weil knows that the sale
is being made to a purchaser that beneficially owns at the time of the sale 5%
or more of the outstanding voting securities of any class of the Company;
(c) in a sale as to which the Company has been given
a right of first refusal in accordance with this section 4(c). To make such a
sale, Weil or his affiliates, as the case may be, must notify the Company of
the person proposing to purchase the voting securities and the price and other
terms of the proposed sale. The Company will have 15 days following its
receipt of this notice to purchase the voting securities at the price and on
the other terms set forth in the notice. If the Company is not willing and
able to complete the purchase within the 15-day period, Weil or his affiliates,
as the case may be, may sell the voting securities to the person, at the price,
and on the other terms specified in the notice, provided that
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<PAGE> 7
the sale is completed within 60 days following the end of the 15-day period; or
(d) in a gift or other transfer without
consideration to (i) an exempt organization under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, (ii) to the spouse, children, or
grandchildren of Weil or one of his affiliates, as the case may be, provided
that the purpose of the transfer is not to circumvent the provisions of this
Agreement, or (iii) to a trust of which the spouse, children, or grandchildren
of Weil or one of his affiliates, as the case may be, are the beneficiaries.
If Weil or one or more of his affiliates shall desire to dispose of any voting
securities of the Company and shall be precluded from doing so by the terms of
this Agreement, the Company and Weil or such affiliates shall cooperate with
each other in a good faith effort to arrange a purchase of such voting
securities by the Company or by a mutually satisfactory third party or third
parties upon mutually acceptable terms.
5. Voting of Voting Securities Beneficially owned by
Weil and his Affiliates.
(a) During the Term of this Agreement, Weil will:
(i) not vote any voting securities of the Company
beneficially owned by him, and cause his affiliates not to vote any
voting securities of the Company beneficially owned by them, for
-7-
<PAGE> 8
any nominee for election as a director who is not recommended by a
majority of the Company's Board of Directors; if any voting securities
of the Company beneficially owned by Weil or his affiliates are
included in a quorum at any stockholders meeting at which directors
are elected, Weil will vote or cause to be voted all such voting
securities for the election of the nominee or nominees recommended by
a majority of the Company's Board of Directors.
(ii) not vote any voting securities of the Company
beneficially owned by him, and cause his affiliates not to vote any
voting securities of the Company beneficially owned by them, for any
proposal to amend the Certificate of Incorporation or the Bylaws of
the Company, or to adopt a new or restated Certificate of
Incorporation or Bylaws of the Company, unless the proposal is
recommended by a majority of the Company's Board of Directors.
(b) In all matters submitted to the Company's
stockholders for a vote other than those referred to in Section 5(a), including
but not limited to any action on stock option or other executive compensation
plans, Weil and his affiliates may vote their voting securities without
restriction.
-8-
<PAGE> 9
6. Remedies.
(a) Weil agrees that he will, forthwith upon the
request of the Company's Board of Directors, resign as a director of the
Company in the event that he deliberately breaches any of his covenants in this
Agreement. Any such resignation will not terminate this Agreement or preclude
the Company or Weil from seeking any other remedies to which either of them may
be entitled by reason of the breach by the other party of any term of this
Agreement.
(b) Weil acknowledges that any breach of his
covenants in this Agreement would cause immediate and irreparable harm to the
Company and, therefore, consents to the entry, by a court of competent
jurisdiction, of any temporary, preliminary, or permanent injunction that would
arrest or redress any such breach. The Company agrees that any such injunction
would be its exclusive remedy for a breach by Weil of his obligations under
Sections 3, 4, and 5 of this Agreement, except that, in the event Weil (i)
solicits or participates in the solicitation of proxies or participates in an
election contest in violation of his obligations Section 3(d) or (ii)
initiates, proposes, or supports, or induces any other person to initiate or
propose, any stockholder proposal in violation of his obligations under Section
3(e), the Company will also be entitled to recover monetary damages in the
amount of the expenses (including attorneys' fees) incurred by the
-9-
<PAGE> 10
Company in opposing the proxy contest, election contest, or stockholder
proposal. The inability of Weil to cause his affiliates to act in accordance
with the provisions of this Agreement, following diligent efforts to cause them
to do so, shall not result in liability to Weil for monetary damages hereunder.
7. Election of Weil as a Director. Following the
execution and delivery of this Agreement, the Board of Directors will nominate
Weil for, and will solicit proxies for his election for, successive terms as a
Director of the Company ending not sooner than the Annual Meeting of
Stockholders to be held in 1998.
8. Term of Agreement. The "Term of this Agreement"
will begin on the date that this Agreement is approved by the Company's Board
of Directors and will end as follows:
(a) If the Board of Directors fails to nominate Weil
for, or to solicit proxies for his election for, successive terms as a Director
of the Company ending not sooner than the Annual Meeting of Stockholders to be
held in 1998, the Term of this Agreement will end when Weil's term in office
expires.
(b) If Weil ceases to serve as a Director by reason
of his resignation, death, or incapacity, the term of this Agreement will end
upon the expiration of both (i) the date on which Weil ceases to serve as a
Director and (ii) one year following the date of this Agreement.
-10-
<PAGE> 11
A termination under this Section 8 shall relieve Weil
of all of his obligations hereunder other than the obligations relating to
confidentiality set forth in Section 2.
9. Miscellaneous. This Agreement will be binding
upon the Company, its successors and assigns, and upon Weil, his assigns,
executors, administrators, or personal representatives; will be interpreted and
enforced in accordance with the laws of the State of Ohio; and represents the
entire understanding between the parties on its subject matter and supersedes
all prior understandings. If any provision of this Agreement is held to be
invalid, void, or unenforceable for any reason, the remaining provisions of
this Agreement will nevertheless continue to be in full force and effect.
IN WITNESS WHEREOF, the Company and Weil have
executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
OGLEGAY NORTON COMPANY
By /s/ Renold D. Thompson
-----------------------------
/s/ John D. Weil
-------------------------------
John D. Weil
</TABLE>
-11-
<PAGE> 1
Exhibit 10(g)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 26th day of
February, 1992, by and between OGLEBAY NORTON COMPANY, a Delaware corporation
(the "Company"), and R. THOMAS GREEN, JR., ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for many years served the Company in many
different capacities, each with increasing responsibility and increasing
importance to the Company, and has fully, ably, and responsibly discharged the
duties of his various positions with the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it would be in the best interests of the Company and its
shareholders to have the Company enter into this Employment Agreement with
Employee to secure his services as Chairman of the Board, President, and Chief
Executive Officer of the Company;
NOW, THEREFORE, the Company and Employee agree as follows;
1. Employment Contract Period.
(a) During the period specified in Paragraph 1(b),
the Company shall employ Employee, and Employee shall serve the
Company, as Chairman of the
<PAGE> 2
Board, President, and Chief Executive Officer of the Company on the
terms and subject to the conditions set forth herein.
(b) The term of Employee's employment hereunder
shall commence on April 1, 1992 (the "Effective Date") and, subject to
prior termination as provided in Paragraph 7 hereof, shall continue
for three years until March 31, 1995. The term of Employee's
employment hereunder is sometimes hereinafter referred to as the
"Contract Period".
2. Position, Duties, Responsibilities. At all times
during the Contract Period, Employee shall:
(a) Hold the position and have the duties and
responsibilities of Chairman of the Board, President, and Chief
Executive Officer of the Company as those duties and responsibilities
have been understood by the executive officers of the Company and by
its Board through the Effective Date and as those duties and
responsibilities may be defined and extended, from time to time after
the Effective Date, by the Board with Employee's consent;
(b) Adhere to and implement the policies and
directives promulgated, from time to time, by the Board;
(c) Observe all Company policies applicable to
executive officers of the Company;
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<PAGE> 3
(d) Devote his business time, energy, and talent to
the business of and to the furtherance of the purposes and objectives
of the Company to generally the same extent as he has so devoted his
business time, energy, and talent as an officer of the Company before
the Effective Date, and neither directly nor indirectly render any
business, commercial, or professional services to any other person,
firm, or organization for compensation without the prior approval of
the Board; and
(e) Serve as a Director of the Company and as a
member of any Board committees determined by the Board, upon the same
terms and conditions as any other employee of the Company who also
serves as a Director.
Nothing in this Agreement shall preclude Employee from devoting reasonable
periods of time to charitable and community activities or the management of his
investment assets provided such activities do not materially interfere with the
performance by Employee of his duties hereunder.
3. Compensation. For services actually rendered by
Employee on behalf of the Company during the Contract Period as contemplated by
this Agreement the Company shall pay to Employee a base salary at the rate of
$225,000 per year or such greater amount as the Board, upon recommendation of
the Compensation and Organization Committee, may determine. The base salary
shall be paid to
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<PAGE> 4
Employee in the same increments and on the same schedule each month as in
effect for Employee's base salary as an officer of the Company on the Effective
Date. Employee shall not be entitled to any base salary during any period when
he is receiving long-term disability benefits under the Disability Benefit
Arrangement provided to Employee by the Company.
4. Automobile. During the Contract Period, the
Company will provide Employee with a suitable automobile (of a class and
relative model year at least as good as provided to Employee on the Effective
Date) purchased or leased by the Company. The Company will pay all maintenance
expenses with respect to the automobile; will procure and maintain in force at
the Company's expense collision, comprehensive, and liability insurance
coverage with respect to the automobile; and will pay operating expenses with
respect to the automobile to the extent such operating expenses are incurred in
the conduct of the Company's business.
5. Vacation. Employee will be entitled to such
periods of vacation and sick leave allowance each year as are determined by the
Company's vacation and sick leave policy for executive officers as in effect on
the Effective Date or as may be increased from time to time thereafter.
Neither vacation time nor sick leave allowance will be accumulated from year to
year.
-4-
<PAGE> 5
6. Other Company Plans, Benefits, and Perquisites.
Employee shall be entitled to participate in the Company's Pension Plan for
Salaried Employees; the unfunded excess benefit plan maintained in conjunction
with the Salaried Plan; the Salary Continuation Arrangement; the Disability
Benefit Arrangement; his Split Dollar Insurance Agreement with the Company; the
post-retirement Death Benefit Arrangement; the Incentive Savings Plan; the 1983
Stock Equivalent Plan; and every other employee benefit plan not specifically
referred to in this Agreement that is generally available to executive officers
of the Company at any time during the Contract Period. Employee's
participation in and benefits under any such plan shall be on the terms and
subject to the conditions specified in the governing document of the particular
plan which terms and conditions shall not be amended during the Contract Period
unless the benefits to Employee are at least as great under the plan as amended
(or under a substitute plan or arrangement) as were the benefits under the plan
as in effect on the Effective Date. The Company will also provide Employee
with such perquisites as the Company has customarily provided to its top
executive officers.
7. Termination.
(a) Employee's employment hereunder will terminate
without further notice upon the death of Employee.
-5-
<PAGE> 6
(b) The Company may terminate Employee's employment
hereunder effective immediately upon giving notice of such
termination;
(i) For "cause," (A) if Employee commits an act of
fraud, embezzlement, theft, or other similar criminal act
constituting a felony and involving the Company's business or
(B) if Employee breaches his agreement with respect to the
time to be devoted to the business of the Company set forth in
Paragraph 2(d) hereof and fails to cure such breach within 30
days of receipt of written notice of such breach from the
Board; or
(ii) Upon disability, if Employee is prevented from
performing his duties hereunder by reason of physical or
mental incapacity for a period of 180 consecutive days.
(c) Employee may terminate his employment hereunder
effective immediately upon giving of notice of such termination:
(i) Without cause at any time; or
(ii) For "good reason," which, for purposes of this
Agreement shall
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<PAGE> 7
mean the occurrence of any of the following:
(A) Any reduction in aggregate direct remuneration,
position, responsibilities, or duties contemplated for
Employee under this Agreement or any material reduction in
the aggregate of employee benefits, perquisites, or fringe
benefits contemplated for Employee under this Agreement; or
(B) Any good faith determination by Employee that,
as a result of fundamental differences of opinion between
Employee and the Board as to the goals of the Company,
Employee is unable to carry out the responsibilities and
duties contemplated for Employee under this Agreement.
8. Severance Compensation.
(a) If Employee's employment is terminated before
March 31, 1995 by the Company without cause or by Employee for good
reason, then, except as provided in Paragraph 8(b), 8(c), 8(d), or
8(e), the Company
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<PAGE> 8
shall pay and provide to Employee the following compensation and
benefits through March 31, 1995:
(i) Base salary at the highest monthly rate payable
to Employee during the Contract Period, to be paid at the
times provided in Paragraph 3 hereof;
(ii) Coverage under the Company's medical insurance
plan, short-term disability plan, and long-term disability
plan, Salary Continuation Arrangement, Disability Benefit
Arrangement, Split Dollar Insurance Agreement, and
post-retirement Death Benefit Arrangement, each as in effect
on the Effective Date (or, if terminated and replaced by a
successor plan or benefit arrangement, as so provided in such
successor plan or benefit arrangement or, if subsequently
amended to increase benefits to Employee or his dependents, as
so amended) and each as if Employee's employment had continued
through March 31, 1995; and
(iii) Coverage under the Company's unfunded excess
benefit plan
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<PAGE> 9
as if Employee's employment had continued through March 31,
1995.
If any of the benefits to be provided under one or more of the plans,
agreements, or arrangements specified above can not be provided
through that plan, agreement, or arrangement to Employee following
termination of his employment, the Company shall directly provide the
full equivalent of such benefits to Employee.
(b) If Employee becomes entitled to compensation and
benefits pursuant to Paragraph 8(a) he shall use reasonable efforts to
seek other employment, provided, however, that he shall not be
required to accept a position of less importance and dignity or of
substantially different character than that of Chairman of the Board,
President, and Chief Executive Officer of the Company or a position
that would require Employee to engage in activity in violation of
Employee's agreement with respect to noncompetition set forth in
Paragraph 10 hereof nor shall he be required to accept a position
outside the greater Cleveland area. The Company's obligations under
items (i) and (ii) of Paragraph 8(a) will be offset by payments and
benefits received by Employee from another employer to the following
extent:
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<PAGE> 10
(i) The Company's obligation to pay any particular
installment of base salary following Employee's termination
will be offset, on a dollar for dollar basis, by any cash
compensation received by Employee from another employer before
the date on which the installment of base salary is payable by
the Company.
(ii) To the extent that Employee is provided
medical, dental, short-term or long-term disability income
protection, or life insurance benefits by another employer
during any period, the Company will be relieved of its
obligation to provide such benefits to Employee. For example,
if a new employer provides Employee with a medical benefits
plan that pays $500.00 for a specific claim made by Employee
and the Company's medical insurance plan would have paid
$750.00 for that claim, then the Company will be obligated to
pay Employee $250.00 with respect to that claim.
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<PAGE> 11
Other than as provided in this Paragraph 8(b) Employee shall have no
duty to mitigate the amount of any payment or benefit provided for in
this Agreement.
(c) If during any period in which Employee is
entitled to payments or benefits from the Company under Paragraph
8(a);
(i) Employee materially and willfully breaches his
agreement with respect to confidential information set forth
in Paragraph 9 hereof and such breach directly causes the
Company substantial and demonstrable damage; or
(ii) Employee materially and willfully breaches his
agreement with respect to noncompetition set forth in
Paragraph 10 hereof and such breach directly causes the
Company substantial and demonstrable damage;
then the Company will be relieved of its obligations under Paragraph
8(a) hereof as of the first day of the month immediately following the
date of such material breach.
(d) If Employee dies during any period in which he
is entitled to payments or benefits from the Company under Paragraph
8(a), the Company will be relieved of its obligations under item (i)
of
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<PAGE> 12
Paragraph 8(a) and the Company will provide to Employee's
beneficiaries and dependents death benefits and continuing medical and
dental benefits to the same extent as if Employee's death had occurred
while Employee was in the active employ of the Company.
(e) If at any time Employee becomes entitled to
payments or benefits from the Company both under Paragraph 8(a) of
this Agreement and under any provision of the "Change of Control
Agreement" (defined and amended by Paragraph 11, below), Employee
shall be entitled to receive, with respect to each category of
payments and benefits, all of the payments and benefits provided for
under that agreement (either this Agreement or the Change of Control
Agreement) that is most favorable to Employee but Employee shall not
be entitled to a double payment with respect to any calendar period.
9. Confidential Information. Employee agrees that he
will not, during the term of the Agreement or at any time thereafter, either
directly or indirectly, disclose or make known to any other person, firm, or
corporation any confidential information, trade secret, or proprietary
information of the Company that Employee may acquire in the performance of
Employee's duties hereunder. Upon the termination of Employee's employment
with the Company, Employee agrees to deliver forthwith to the
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<PAGE> 13
Company any and all literature, documents, correspondence, and other materials
and records furnished to or acquired by Employee during the course of such
employment.
10. Noncompetition. During any period in which
Employee is receiving base salary under this Agreement (whether during the
Contract Period pursuant to Paragraph 3 or following termination pursuant to
Paragraph 8(a)) and for a period of one year after Employee last receives base
salary under this Agreement, Employee shall not act as a proprietor, investor,
director, officer, employee, substantial stockholder, consultant, or partner in
any business engaged to a material extent in direct competition with the
Company in any market in any line of business engaged in by the Company during
the Contract Period.
11. Change of Control Agreement. The Company and
Employee are parties to another employment agreement (intended to become
effective upon a change of control of the Company) entered into in 1987 by and
between the Company and Employee (as amended to date, as amended in the
remainder of this Paragraph 11, and as may be amended from time to time by the
Company and Employee, the "Change of Control Agreement"). The Change of
Control Agreement is hereby amended by substituting for the original Paragraph
20 thereof (captioned "Limitation on Contingent
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<PAGE> 14
Payments") a new Paragraph 20 to read in its entirety, with its caption, as
follows:
"20. Excise Tax. As to the Company's obligation if
any of the payments or benefits to be paid and provided to Employee by
the Company under any provision of this Agreement or any portion of
any such payment or benefits would constitute "excess parachute
payments" within the meaning of section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor provision, see
Paragraph 13 of the Employment Agreement between Employee and the
Company pursuant to which Employee is employed as Chairman of the
Board, President, and Chief Executive Officer effective April 1, 1992.
Except for the prohibition of double payments contained in Paragraph 8(e),
above, nothing in this Agreement shall limit Employee's rights under the Change
of Control Agreement.
12. Costs of Enforcement. The Company shall pay and
be solely responsible for any and all costs and expenses (including attorneys'
fees) incurred by Employee in seeking to enforce the Company's obligations
under this Agreement unless and to the extent a court of competent jurisdiction
determines that the Company was relieved of those obligations because (a) the
Company terminated Employee for cause (as determined under
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<PAGE> 15
Paragraph 7(b)(i) hereof), (b) Employee voluntarily terminated his employment
other than for good reason (as determined under Paragraph 7(c)(ii) hereof), or
(c) Employee materially and willfully breached his agreement not to compete
with the Company or his agreement with respect to confidential information and
such breach directly caused substantial and demonstrable damage to the Company.
The Company shall forthwith pay directly or reimburse Employee for any and all
such costs and expenses upon presentation by Employee or by counsel selected
from time to time by Employee of a statement or statements prepared by Employee
or by such counsel of the amount of such costs and expenses. If and to the
extent a court of competent jurisdiction renders a final binding judgment
determining that the Company was relieved of its obligations for any of the
reasons set forth in (a), (b), or (c) above, Employee shall repay the amount of
such payments or reimbursements to the Company. In addition to the payment and
reimbursement of expenses of enforcement provided for in this Paragraph 12, the
Company shall pay to Employee in cash, as and when the Company makes any
payment on behalf of, or reimbursement to, Employee, an additional amount
sufficient to pay all federal, state, and local taxes (whether income taxes or
other taxes) incurred by Employee as a result of (x) payment of the expense or
receipt of the reimbursement, and (y) receipt of the
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<PAGE> 16
additional cash payment. The Company shall also pay to Employee interest
(calculated at the Base Rate from time to time in effect at National City Bank,
Cleveland, Ohio, compounded monthly) on any payments or benefits that are paid
or provided to Employee later than the date on which due under the terms of
this Agreement.
13. Excise Tax. If any of the payments or benefits
to be paid and provided to Employee by the Company under any provision of this
Agreement, under any provision of the Change of Control Agreement, or under any
provision of any other agreement, plan, or arrangement, or any portion of any
such payment or benefits would constitute "excess parachute payments" within
the meaning of section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), or any successor provision, the Company shall make additional
cash payments to Employee at the same times as any such payment or benefit
constituting an excess parachute payment is paid or provided and in such
amounts as are necessary to put Employee in the same position after payment of
all federal, state, and local taxes (whether income taxes, excise taxes under
section 4999 of the Code or otherwise, or other taxes) as he would have been in
after payment of all federal, state, and local income taxes if the payments or
benefits had been subject only to federal, state, and local income taxes
generally applicable to compensation income. For example,
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<PAGE> 17
if a $100,000 payment to Employee constituted an excess parachute payment
subject to a 20% excise tax under section 4999 of the Code, as well as federal
income tax at a 28% effective rate, state income tax at a 10% marginal rate,
and local income tax at a 2% marginal rate and no other taxes, and the state
and local taxes were deductible for federal income tax purposes, the Company
would be required to pay to Employee an additional $46,748 with respect to the
$100,000 excess parachute payment. The net amount available to Employee after
all taxes, including the excise tax on both the $100,000 and the $46,748, would
be $63,630, the same amount that would be available to Employee had the
$100,000 payment been subject only to federal, state and local income taxes.
14. Notices. For purposes of this Agreement, all
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or when mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed to the
Company (Attention: Secretary) at its principal executive office and to
Employee at his principal residence, or to such other address as either party
may have furnished to the other in writing and in accordance effective only
upon receipt.
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<PAGE> 18
15. Assignment Binding Effect.
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company and the Company's successors and
assigns. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Employee, to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place.
(b) This Agreement shall be binding upon Employee
and this Agreement and all rights of Employee hereunder shall inure to
the benefit of, and be enforceable by, Employee and his personal or
legal representatives, executors, or administrators. No right,
benefit, or interest of Employee hereunder shall be subject to
assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation, or to execution, attachment, levy, or similar
process; except that Employee may assign any right, benefit, or
interest hereunder if such assignment is permitted under the terms of
any plan or policy of insurance or annuity contract governing such
right, benefit, or interest.
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<PAGE> 19
16. Invalid Provisions.
(a) Any provision of this Agreement that is
prohibited or unenforceable shall be ineffective to the extent, but
only to the extent, of such prohibition or unenforceability without
invalidating the remaining portions hereof and such remaining portions
of this Agreement shall continue to be in full force and effect.
(b) In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable, the
parties will negotiate in good faith to replace such provision with
another provision that will be valid or enforceable and that is as
close as practicable to the provision held invalid or unenforceable.
17. Entire Agreement, Modification. Except for the
Change of Control Agreement, this Agreement contains the entire agreement
between the parties with respect to the employment of Employee by the Company
and supersedes all prior and contemporaneous agreements, representations, and
understandings of the parties. No modification, amendment, or waiver of any of
the provisions of the Agreement shall be effective unless in writing,
specifically referring hereto, and signed by both parties.
18. Waiver of Breach. The failure at any time to
enforce any of the provisions of this Agreement or
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<PAGE> 20
to require performance by the other party of any of the provisions of this
Agreement shall in no way be construed to be a waiver of such provisions or to
affect either the validity of this Agreement or any part of this Agreement or
the right of either party thereafter to enforce each and every provision of
this Agreement in accordance with the terms hereof.
19. Governing Law. This Agreement has been made in
and shall be governed and construed in accordance with the laws of the State of
Ohio.
IN WITNESS WHEREOF, the Company and Employee have
executed this Agreement as of the day and year first above written.
<TABLE>
<S> <C>
Attest: OGLEBAY NORTON COMPANY
/s/ David A. Kuhn By: /s/ Richard J. Kessler
- ----------------------------------------- ----------------------------------
David A. Kuhn Richard J. Kessler
Secretary Vice President-Finance
and Treasurer
/s/ R. Thomas Green, Jr.
----------------------------------
R. Thomas Green, Jr.
</TABLE>
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<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF OGLEBAY NORTON COMPANY
--------------------------------------
Jurisdiction
Subsidiaries of Incorporation
------------ ----------------
California Silica Products Company California
Canadian Ferrto Hot Metal
Specialties Limited Ontario
Central Silica Company Ohio
Indiana Manufacturing Company Inc. Indiana
Laxare, Inc. West Virginia
National Perlite Products Company Idaho
Oglebay Norton Sales Company Ohio
Oglebay Norton Taconite Company Minnesota
ON Coast Petroleum Company Texas
ONCO Eveleth Company Minnesota
ONCO Minerals, Inc. Ohio
ONCO WVA, Inc. West Virginia
ON Corp. Delaware
Pringle Transit Company Ohio
Saginaw Mining Company Ohio
TBF, Inc. Ohio
Texas Mining Company Texas
Tuscarawas Manufacturing Company Ohio
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the following Registration
Statements and Post-Effective Amendment of our report dated February 18, 1994,
with respect to the consolidated financial statements and schedules of Oglebay
Norton Company included in this Annual Report (Form 10-K) for the year ended
December 31, 1993:
Registration Statement Number 33-37974 on Form S-8 dated November 23, 1990
pertaining to the Olgebay Norton Company Incentive Savings Plan and Trust;
Registration Statement Number 33-37975 on Form S-8 dated November 23, 1990
pertaining to the Olgebay Norton Taconite Company Thrift Plan and Trust;
Post-Effective Amendment Number 4 to Registration Statement Number
2-80895 on Form S-8 dated February 13, 1990 pertaining to the Olgebay
Norton Company Incentive Savings Plan and Trust;
Registration Statement Number 33-29046 on Form S-8 dated June 9, 1989
pertaining to the Olgebay Norton Company Employee Stock Ownership Plan and
Trust;
Registration Statement Number 33-21006 on Form S-8 dated April 21, 1988
pertaining to the Olgebay Norton Company Employee Stock Ownership Plan and
Trust.
/S/ ERNST & YOUNG
ERNST & YOUNG
Cleveland, Ohio
March 28, 1994
