<PAGE> 1
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SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
OGLEBAY NORTON COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):_____________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid:________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________________
(2) Form, Schedule or Registration Statement No.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
================================================================================
<PAGE> 2
OGLEBAY NORTON COMPANY
1100 SUPERIOR AVENUE [LOGO] CLEVELAND, OHIO 44114-2598
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1996
The Annual Meeting of Stockholders of Oglebay Norton Company will be held
in Suite 1200 of the Diamond Building Conference Center located at 1100 Superior
Avenue, Cleveland, Ohio, on Wednesday, April 24, 1996, at 9:00 a.m., Cleveland,
Ohio time, for the following purposes:
1. To elect directors of the class whose terms in office will expire in
1999;
2. To approve the Oglebay Norton Company Long-Term Incentive Plan; and
3. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 12, 1996,
as the record date for determining stockholders entitled to notice of the
meeting and to vote.
Please sign, date and return the enclosed Proxy in the envelope provided
for that purpose, whether or not you expect to be present at the meeting. If you
attend the meeting, you may revoke your Proxy and vote your shares in person.
The Proxy Statement accompanies this Notice.
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
By Order of the
Board of Directors
DAVID G. SLEZAK,
Secretary and Director of Legal Affairs
March 27, 1996
<PAGE> 3
OGLEBAY NORTON COMPANY
1100 SUPERIOR AVENUE CLEVELAND, OHIO 44114-2598
PROXY STATEMENT
ANNUAL MEETING, APRIL 24, 1996
THE PROXY AND SOLICITATION
This Proxy Statement is being mailed on March 27, 1996, to the stockholders
of Oglebay Norton Company in connection with the solicitation by the Board of
Directors of Oglebay Norton Company of the enclosed form of Proxy for the Annual
Meeting of Stockholders ("Annual Meeting") to be held on April 24, 1996. A
stockholder giving a Proxy may revoke it at any time before it is exercised by
giving notice to the Company in writing or in open meeting. The cost of
soliciting Proxies will be borne by the Company.
- --------------------------------------------------------------------------------
PURPOSES OF
ANNUAL
MEETING
The Annual Meeting has been called for the purposes of electing directors
of the class whose terms in office will expire in 1999 and to approve the
Oglebay Norton Company Long-Term Incentive Plan (the "Long-Term Incentive
Plan"). The three persons named in the enclosed Proxy, who have been selected by
the Board of Directors, have indicated that, unless otherwise directed in the
enclosed Proxy, they intend to vote for the election as directors of the three
nominees listed below and for adoption of the Long-Term Incentive Plan. In the
event of the unavailability of any of the nominees, the Proxy to that extent
will be voted for such other person or persons as the Board of Directors may
recommend. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve as directors. Messrs. R. Thomas Green, Jr. and
Renold D. Thompson were elected for three-year terms by the stockholders at the
1993 Annual Meeting. Mr. Ralph D. Ketchum, who was elected for a three-year term
by the stockholders at the 1994 Annual Meeting, resigned from the director class
of 1997; and was elected by the Board of Directors on January 31, 1996, to fill
the vacancy created by the death of Mr. Fred R. White, Jr., for the remainder of
Mr. White's term, which expires on the date of the 1996 Annual Meeting. Mr.
White died on December 10, 1995. The Company has no knowledge of any other
matters to be presented at the Annual Meeting; but, in the event other matters
do properly come before the meeting, the persons named in the Proxy will vote in
accordance with their judgment on such matters.
- --------------------------------------------------------------------------------
VOTING
SECURITIES
The Company has outstanding and entitled to vote at the meeting 2,447,432
shares of Common Stock, each of which is entitled to one vote. The Board of
Directors has fixed the close of business on March 12, 1996, as the record date
for determining stockholders entitled to notice of the meeting and to vote.
Under the Delaware General Corporation Law and the Company's Restated
Certificate of Incorporation ("Charter"), each stockholder has the right to
cumulate his votes in the election of directors and to give one nominee a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which his shares are entitled, or he may distribute his votes on the
same principle among two or more nominees as he sees fit. In the event that any
stockholder distributes his votes in this manner, the persons named in the Proxy
will then decide the manner in which they will allocate the votes represented by
valid Proxies held by them among the nominees named below. The Company has not
been advised of any stockholder who intends to cumulate his votes. If a
stockholder withholds authority to vote for any of the nominees, none of his
shares will be voted cumulatively for those nominees for whom authority to vote
was withheld. Under Delaware law and the Company's Charter and By-Laws,
Directors are elected by a plurality of the votes of the shares present at a
meeting, at
1
<PAGE> 4
which a quorum is present, and entitled to vote on the election of directors.
Proposals, other than the election of directors, are adopted and approved by the
vote of a specified percentage of the outstanding shares of the Company present
at a meeting, at which a quorum is present, and entitled to vote on the
proposal. Abstentions are tabulated in determining the votes present at a
meeting. Consequently, an abstention has the same effect as a vote against a
proposal or a director nominee, as each abstention would be one less vote in
favor of a proposal or for a director nominee. Broker nonvotes may not be
counted in determining the votes present at a meeting and entitled to vote on
proposals as to which the broker does not have discretionary authority to vote
and has not been instructed by the beneficial owner of the stock to vote,
although they may be counted for purposes of determining if a quorum is present.
Consequently, a broker nonvote will have no effect on nondiscretionary
proposals, although they may be counted as part of the voting power for other
proposals.
- --------------------------------------------------------------------------------
BOARD OF
DIRECTORS
The Charter and the By-Laws of the Company presently provide for 10
directors, divided into three classes, three of whom are in the class of 1996,
four of whom are in the class of 1997, and three of whom are in the class of
1998. On December 10, 1995, Fred R. White, Jr., Vice Chairman Emeritus and a
director whose term of office would have otherwise expired on the date of the
1996 Annual Meeting, passed away. In order to balance the number of directors in
each of the three classes of directors, as contemplated in the Company's
Charter, Ralph D. Ketchum, on January 31, 1996, resigned as a director in the
class of 1997 and, upon recommendation of the Director Search Committee, was
elected by the Board of Directors on that date to fill the remainder of Mr.
White's term in the class of 1996. On February 28, 1996, the Board of Directors,
upon recommendation of the Director Search Committee, elected James T. Bartlett
as a director to fill the vacancy in the class of 1997 created by Mr. Ketchum's
resignation. Except where a director is elected to fill a vacancy in an existing
term, each of the directors serves for a term of three years ending on the date
of the Annual Meeting in the year of the director's class and until a successor
is elected and shall have qualified.
The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of the Company.
However, in accordance with corporate legal principles, it is not involved in
day-to-day operating details. Members of the Board of Directors are kept
informed of the Company's business through discussions with the Chairman,
President and Chief Executive Officer and other officers, by reviewing analyses
and reports sent to them each month, and by participating in Board and committee
meetings.
The Board of Directors held eight meetings during 1995, in addition to
several meetings of the various Board Committees. No director attended fewer
than 75 percent of the aggregate of all Board meetings and of all meetings held
by any committee of the Board on which the director served.
COMMITTEES
OF THE
BOARD
There are four committees of the Board of Directors, each of which is
briefly described below:
Executive Committee. The Executive Committee is composed of the following
directors: Malvin E. Bank (Chairman), Brent D. Baird, William G. Bares and R.
Thomas Green, Jr. The Executive Committee met four times during 1995. The
Committee meets each month in which there is not a regularly scheduled or
special meeting of the Board of Directors and, in the absence of the Board of
Directors, at such other times as may be necessary to conduct the business of
the Company.
Compensation and Organization Committee. The Compensation and Organization
Committee, which is composed of the following directors: William G. Bares
(Chairman), Malvin E. Bank, Ralph D. Ketchum and John D. Weil, met four times
during 1995. The functions of the Compensation and Organization Committee
include fixing compensation for executive officers of the Company and
considering corporate organizational matters and employee benefit programs
generally.
Audit Committee. The Audit Committee, which met twice during 1995, is
composed of the following directors: Albert C. Bersticker (Chairman), Brent D.
Baird, John J. Dwyer, and
2
<PAGE> 5
Renold D. Thompson. The functions of the Audit Committee include reviewing with
the independent auditors of the Company the scope and thoroughness of the
auditors' examination; considering recommendations of the independent auditors;
reviewing with the independent auditors and management the adequacy of the
Company's internal accounting controls; recommending to the Board of Directors
the appointment of independent auditors for the year; reviewing the activities
conducted under the Company's Legal and Ethical Compliance Program; and
reviewing management reports on operational controls.
Director Search Committee. The Director Search Committee, which is
composed of the following directors: Ralph D. Ketchum (Chairman), Albert C.
Bersticker, Renold D. Thompson and John D. Weil, met once during 1995. The
functions of the Director Search Committee include: establishing and reviewing
criteria and qualifications of candidates for membership on the Company's Board
of Directors; identifying and making recommendations regarding nominations for
candidates and renominations of incumbent directors for election to the
Company's Board of Directors; reviewing with each director standing for
renomination such director's contributions to the Company's Board of Directors
and its Committees, and such director's desire to stand for reelection; studying
and making recommendations concerning director succession, tenure, size, and
composition of the Board of Directors; and, performing such other actions it
deems necessary in the performance of its oversight function. The Director
Search Committee will consider nominees for director submitted by stockholders.
Stockholders desiring to make recommendations concerning new directors must
submit a statement setting forth the nominee's name, age, business and residence
addresses, principal occupation, a list of companies of which the nominee is an
officer or director, qualifications, a statement on whether the nominee is a
Citizen of the United States of America, and the number of shares of the Company
owned by the nominee and the name, record address, and number of shares of the
Company owned by the stockholder recommending the nomination, and the
candidate's written consent to nomination, to: Chairman, Director Search
Committee, c/o David G. Slezak, Secretary and Director of Legal Affairs, Oglebay
Norton Company, 1100 Superior Avenue -- 20th Floor, Cleveland, Ohio 44114-2598.
COMPENSATION
OF DIRECTORS
Each member of the Board of Directors who is not also an employee of the
Company received a retainer in the amount of $3,000 for each quarter in which
the director served ($12,000 per year), an annual grant of 100 shares of the
Company's stock under the Oglebay Norton Director Stock Plan, and $750 for each
Board and committee meeting attended during 1995.
OTHER
INFORMATION
The Company and Brent D. Baird are parties to a standstill agreement that,
as to Mr. Baird and his affiliates, limits to 11% the percentage of outstanding
voting securities of the Company that they may own, prohibits them from
participating in a proxy contest in opposition to a majority of the Company's
Board of Directors, limits their right to sell voting securities of the Company,
and requires them to vote at least 75% of their voting securities for the
election as directors of the nominees of the Company's Board of Directors. The
11% ownership limitations will not be affected by increases in percentage caused
solely by reason of the purchase by the Company of its outstanding voting
securities. Pursuant to this agreement, the Company's Board of Directors elected
Mr. Baird as a director in February, 1990, and nominated him for election as a
director at the 1991 and 1994 Annual Meetings of Stockholders.
The Company and John D. Weil are parties to a standstill agreement that, as
to Mr. Weil and his affiliates, limits to 11% the percentage of outstanding
voting securities of the Company that they may own, prohibits them from
participating in a proxy contest in opposition to a majority of the Company's
Board of Directors, limits their right to sell voting securities of the Company,
prohibits them from voting securities of the Company, and prohibits them from
voting for any director nominee or any Charter or By-Law amendment not
recommended by the Company's Board of Directors. The 11% ownership limitations
will not be affected by increases in percentage caused solely by reason of the
purchase by the Company of its outstanding voting securities. Pursuant to this
agreement, the Company's Board of Directors nominated Mr. Weil for election as a
director at the 1992 and 1995 Annual Meetings of Stockholders.
3
<PAGE> 6
- --------------------------------------------------------------------------------
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS TO THE CLASS OF 1999
ELECTION OF
DIRECTORS
Pursuant to the provisions in the Company's Charter and its By-Laws
relating to the arrangement of its Board of Directors into three classes, there
are three directors of the Company whose terms expire at the Annual Meeting in
1996. The three directors whose terms are expiring in 1996 are described in the
section immediately below. Each of those directors has been nominated by the
Board of Directors for election to new terms extending to the Annual Meeting in
1999. Directors whose terms expire at the Annual Meetings in 1997 and 1998 are
described in separate sections below:
<TABLE>
<CAPTION>
Principal Occupation,
Business Experience, and Director
Name Age Other Directorships Since
- --------------------- --- ----------------------------------------------------------- --------
<S> <C> <C> <C>
NOMINEES FOR THE TERM TO EXPIRE IN 1999
R. Thomas Green, Jr. 58 Chairman of the Board of Directors, President and Chief 1992
Executive Officer of the Company since April 1, 1992;
Executive Vice President of the Company from 1990 until
March 31, 1992; and Vice President -- Iron Ore Operations
of the Company from 1984 to 1990.
Ralph D. Ketchum 69 President and Chief Executive Officer of RDK Capital, Inc., 1992
general partner of RDK Capital Limited Partnership
(investments), and CEO of Heintz Corporation (manufacturer
of jet engine components) for more than five years. An
August, 1993 petition was filed by Heintz Corporation, a
subsidiary of RDK Capital Limited Partnership, for
reorganization under the Federal bankruptcy laws. Prior to
his election to Oglebay Norton Company's Board, Mr. Ketchum
was a long-term officer and employee of General Electric
Company, rising to the position of Senior Vice President
and Group Executive of the Lighting Group at the time of
his retirement in 1987. Mr. Ketchum is also a director of
Thomas Industries, Inc., Pacific Scientific Company,
Lithium Technologies, Inc. and Metropolitan Savings Bank.
Renold D. Thompson 69 Vice Chairman of the Board of Directors of the Company 1973
since April 1, 1992; President and Chief Executive Officer
of the Company from May 1982 until March 31, 1992. Mr.
Thompson is also a director of The Lubrizol Corporation and
First Union Management, Inc.
PRESENT DIRECTORS WHOSE TERM OF OFFICE EXPIRES IN 1998
Malvin E. Bank 65 Partner, Thompson Hine & Flory, P.L.L., Cleveland, Ohio, 1977
attorneys, for more than five years. Mr. Bank also serves
on the Board of Metropolitan Financial Corporation.
William G. Bares 54 President and Chief Executive Officer since January 1, 1982
1996, President and Chief Operating Officer from 1987 to
1995, of The Lubrizol Corporation, Cleveland, Ohio,
supplier of chemical additives for use in lubricants and
fuels. Mr. Bares is also a director of The Lubrizol
Corporation, Bearings, Inc. and KeyCorp.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
Principal Occupation,
Business Experience, and Director
Name Age Other Directorships Since
- --------------------- --- ----------------------------------------------------------- --------
<S> <C> <C> <C>
John D. Weil 55 President of Clayton Management Co., St. Louis, Missouri, 1992
investments for more than five years. Mr. Weil also serves
on the Boards of CleveTrust Realty Investors, Cliffs
Drilling Company, Physicians Insurance Company of Ohio,
Todd Shipyards Corporation and Southern Investors Service
Co. Inc.
PRESENT DIRECTORS WHOSE TERM OF OFFICE EXPIRES IN 1997
Brent D. Baird 57 Private Investor; formerly Limited Partner, Trubee, Collins 1990
& Co., Buffalo, New York, member, New York Stock Exchange,
Inc., for more than five years. Mr. Baird is a director of
First Carolina Investors, Inc., First Empire State
Corporation, Todd Shipyards Corporation, Exolon-Esk, Inc.
and Merchants Group, Inc.
James T. Bartlett 59 Managing Director, Primus Venture Partners, the fund 1996
manager for Primus Capital Fund and Primus Capital Fund II,
venture capital limited partnerships, for more than five
years. Mr. Bartlett is also a director of Keithley
Instruments, Inc. and LCI International, Inc.
Albert C. Bersticker 61 Chairman and Chief Executive Officer since January 1, 1996, 1992
President and Chief Executive Officer from May 1991 until
December 1995, and President and Chief Operating Officer
from May 1988 to May 1991, of Ferro Corporation, producer
of specialty coatings, plastics, chemicals and ceramics.
Mr. Bersticker also serves on the Boards of Brush Wellman
Corporation, Centerior Energy Corporation, Ferro
Corporation and KeyCorp.
John J. Dwyer 78 Retired President of the Company for more than five years. 1968
Mr. Dwyer also serves on the Board of NACCO Industries,
Inc.
</TABLE>
- --------------------------------------------------------------------------------
OWNERSHIP
OF VOTING
SECURITIES
The following table shows certain information with respect to the
beneficial ownership of the outstanding shares of the common stock of the
Company on March 12, 1996, by each director and nominee of the Company, certain
executive officers, and by all of the Company's directors and executive officers
as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name Beneficial Ownership Class
--------------------------------------- -------------------- ----------
<S> <C> <C>
Brent D. Baird 273,700(1)(4) 11.18%
1350 One M&T Plaza
Buffalo, New York 14203
Malvin E. Bank 161,345(2)(4) 6.59%
3900 Society Center
127 Public Square
Cleveland, Ohio 44114
John D. Weil 274,700(3)(4) 11.22%
200 North Broadway, Suite 825
St. Louis, Missouri 63102-2573
William G. Bares 400(4) (6)
James T. Bartlett 100(4) (6)
Albert C. Bersticker 450(4) (6)
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name Beneficial Ownership Class
--------------------------------------- -------------------- ----------
<S> <C> <C>
John J. Dwyer 300(4) (6)
R. Thomas Green, Jr. 6,130(5) (6)
Ralph D. Ketchum 1,200(4) (6)
Renold D. Thompson 32,575(4) 1.33%
John L. Selis 4,010(5) (6)
Stuart H. Theis 762(5) (6)
H. William Ruf 3,120(5) (6)
Richard J. Kessler 4,398(5) (6)
Directors and executive officers as a group 763,868(4)(5) 31.20%
including those listed above (17 persons)
<FN>
- ------------------------
(1) Mr. Baird, together with other reporting persons, as a group, holds sole
voting and sole dispositive power as to 273,600 shares (11.18%), of which
8,700 (0.36%) are held by Mr. Baird individually. As a trustee, Mr. Baird
has sole voting and dispositive power as to 3,000 shares (0.12%).
(2) Mr. Bank's shares include 160,770 shares (6.59%) held in various trusts. As
a trustee, Mr. Bank has sole voting and dispositive power as to 107,384
shares (4.39%) and, as to 53,386 shares (2.18%), Mr. Bank shares the voting
power and the dispositive power with co-trustees. In addition, Mr. Bank has
the sole voting and dispositive power as to 575 shares held individually.
(3) Mr. Weil, on behalf of himself and other disclosed persons, reported that he
and such other persons held, as a group, 274,600 shares (11.22%), of which
he held sole voting and sole dispositive power as to 119,400 shares (4.88%)
and shared voting and shared dispositive power as to 17,400 shares (0.71%).
(4) Includes 100 shares which the individual (and 900 shares for directors and
executive officers as a group) will acquire, within 60 days, on the date of
the 1996 Annual Meeting pursuant to the Oglebay Norton Company Director
Stock Plan.
(5) Includes the following numbers of shares, rounded to the nearest whole
share, beneficially owned by the following executives under the Company's
Employee Stock Ownership Plan as of December 31, 1995: Green -- 4,320
shares; Selis -- 3,810 shares; Theis -- 562 shares; Ruf -- 3,113 shares;
Kessler-- 3,798 shares; and directors and executive officers as a group --
16,281 shares.
(6) Less than 1% of the outstanding shares of Common Stock
</TABLE>
The following table shows certain information with respect to all persons
who, as of March 12, 1996, were known by the Company to beneficially own more
than five percent of the outstanding shares of Common Stock of the Company other
than Mr. Baird, Mr. Bank and Mr. Weil whose beneficial ownership of shares of
the Common Stock of the Company is reported on page 5.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name of Owner Beneficially Owned Class
- ----------------------------------- ------------------ ----------
<S> <C> <C>
KeyCorp 289,133(1) 11.81%
127 Public Square
Cleveland, Ohio 44114
The Huntington Trust Company, N.A. 170,398(2) 6.96%
41 South High Street
Columbus, Ohio 43216
Robert I. Gale, III 152,855(3) 6.25%
17301 St. Clair Avenue
Cleveland, Ohio 44110
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
Number of Shares Percent of
Name of Owner Beneficially Owned Class
- ----------------------------------- ------------------ ----------
<S> <C> <C>
Douglas N. Barr 140,420(4) 5.74%
3900 Society Center
127 Public Square
Cleveland, Ohio 44114-1216
Warburg Pincus Counsellors, Inc. 127,900(5) 5.23%
466 Lexington Avenue
New York, New York 10017-3147
<FN>
- ------------------------
(1) On February 14, 1996, KeyCorp (formerly Society Corporation) reported that
it had sole voting power as to 173,752 shares (7.10%), shared voting power
as to 64,131 shares (2.62%), sole dispositive power as to 212,813 shares
(8.70%), and shared dispositive power as to 76,320 shares (3.12%).
(2) On February 14, 1996, The Huntington Trust Company, N.A. reported that it
had sole voting power as to 175,098 shares (7.15%) and shared dispositive
power as to 167,623 shares (6.85%).
(3) As a trustee, Mr. Gale has sole voting and dispositive power as to 25,761
(1.05%) of these shares, shares dispositive power as to 2,775 (0.11%) of
these shares and, together with Mr. Douglas N. Barr, shares voting and
dispositive power as to 122,220 (4.99%) of these shares.
(4) As a trustee, Mr. Barr has sole voting and dispositive power as to 18,000
(0.74%) of these shares and, together with Mr. Robert I. Gale III, shares
voting and dispositive power as to 122,220 (4.99%) of these shares.
(5) Warburg Pincus Counsellors, Inc. reported to the Company that on February
28, 1996 it acquired 127,900 shares (5.23%) of the Company's stock, of which
it has the sole voting and dispositive power.
- --------------------------------------------------------------------------------
</TABLE>
COMPENSATION
OF EXECUTIVE
OFFICERS
The following table sets forth individual compensation information for the
fiscal year ended December 31, 1995, for the Company's chief executive officer
and the four other most highly paid executive officers whose total annual salary
and bonus for the fiscal year ended December 31, 1995, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------
(e)
Other Annual (f)
(a) (b) (c) (d) Compensation All Other
Name and Principal Position Year Salary ($) Bonus ($) (1) ($) (2) Compensation ($) (3)
- -------------------------------- ---- ---------- ------------- ------------ --------------------
<S> <C> <C> <C> <C> <C>
R. Thomas Green, Jr. 1995 $ 276,600 $ 68,000 $ 16,638 $ 42,305
Chairman, President and 1994 250,000 168,000 16,638 45,717
Chief Executive Officer 1993 250,000 90,000 11,633 38,885
John L. Selis 1995 147,600 45,000 8,879 25,143
Vice President -- 1994 141,000 65,000 8,879 27,320
Iron Ore 1993 141,000 45,000 7,353 30,834
Stuart H. Theis 1995 136,600 44,100 -0- 12,441
Vice President -- Marine 1994 120,000 61,000 -0- 13,294
Transportation 1993 91,385 5,000 -0- 1,828
H. William Ruf 1995 125,600 40,950 6,716 20,289
Vice President -- 1994 117,017 49,000 7,561 21,813
Administrative and Legal 1993 103,500 35,000 7,159 23,984
Affairs
Richard J. Kessler 1995 147,000 18,600 8,879 25,088
Vice President -- Finance 1994 140,400 62,000 8,879 27,254
and Development 1993 140,400 45,000 7,353 30,753
7
<PAGE> 10
<FN>
- ------------------------
(1) Amount shown for 1995 bonus is the portion of the named executive's total
1995 bonus received in cash
under the Company's Annual Incentive Plan. Total amount of 1995 bonus
earned under the Annual Incentive Plan and portion of that bonus elected to
be deferred by the named executive under the Company's Long-Term Incentive
Plan were, respectively, as follows: Green ($170,000 and $102,000); Selis
($62,000 and $17,000); Theis ($49,000 and $4,900); Ruf ($58,500 and
$17,550); and Kessler ($62,000 and $43,400). Deferred portions of the 1995
bonus, which were automatically converted upon deferral into share units
based on the fair market value of the Company's common stock, are shown in
the Long-Term Incentive Plan Table, below. Bonuses for 1993 and 1994 were
paid solely in cash, without provision for deferral.
(2) Represents "gross-up" for taxes in respect of payments by the Company to the
named executives for life insurance premiums.
(3) Includes Company contributions for the named executives under the Company's
Incentive Savings Plan (the "Savings Plan") and the Company's Employee Stock
Ownership Plan (the "ESOP"), respectively (Green -- $3,000 and $10,661;
Selis -- $2,952 and $10,491; Theis -- $2,732 and $9,709; Ruf -- $2,512 and
$8,927; and Kessler $2,940 and $10,448); payments by the Company to the
named executive for life insurance premiums (Green -- $19,200; Selis --
$11,700; Ruf -- $8,850; and Kessler -- $11,700); and contributions in the
amount of $9,444 by the Company for Mr. Green under the Supplemental Savings
and Stock Ownership Plan.
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Performance or
Name Number of Shares, Other Period Until
Units or Other Rights Maturation or
(#) (1) Payout (2)
(a) (b) (c)
- --------------------- --------------------- ------------------
<S> <C> <C>
R. Thomas Green, Jr. 3,923.07 5 years
John L. Selis 653.85 5 years
Stuart H. Theis 188.46 5 years
H. William Ruf 675.00 5 years
Richard J. Kessler 1,669.23 5 years
<FN>
- ------------------------
(1) Reflects the portion of the named executive's total 1995 bonus deferred
under the Company's Long-Term Incentive Plan and the 50% Company match of
the deferred amounts under that plan, respectively, as converted into share
units based upon the fair market value of the Company's common stock (Green
-- 2,615.38 and 1,307.69; Selis -- 435.90 and 217.95; Theis -- 125.64 and
62.82; Ruf -- 450.00 and 225.00; and Kessler -- 1,112.82 and 556.41). Bonus
and matching contribution amounts were automatically converted into share
units at the rate of $39.00 per share, the closing price of the Company's
stock on the date the 1995 bonuses were paid and portions thereof were
elected to be deferred.
(2) Share units reflecting the portion of the total bonus elected to be deferred
by the named executive, and dividends paid on those share units, are fully
vested upon allocation to the named executive's plan account. Share units
reflecting the matching contribution, and dividends paid on those share
units, do not generally vest until the fifth anniversary of the date the
matching share unit contribution is allocated to the executive's plan
account, assuming the executive's continuous service with the Company for
the five-year period. Notwithstanding the foregoing, distributions of vested
amounts will generally be made only upon a participant's retirement, death
or other termination of employment. Assuming shareholder approval of the
Long-Term Incentive Plan is obtained, all distributions will be made in the
common stock of the Company.
</TABLE>
8
<PAGE> 11
RETIREMENT
PLANS
The following table sets forth the annual pension payable under the Oglebay
Norton Company Pension Plan for Salaried Employees (the "Salaried Plan") and the
Company's Excess and TRA Supplemental Benefit Retirement Plan (the "Excess
Benefit Retirement Plan") at normal retirement age:
<TABLE>
<CAPTION>
Estimated Annual Benefit
(assuming retirement on January 1, 1996)
Final Average ----------------------------------------------------
Compensation 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs. 35 Yrs.
-------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 75,000............ $ 16,875 $ 22,500 $ 28,125 $ 33,750 $ 39,375
100,000............ 22,500 30,000 37,500 45,000 52,500
150,000............ 33,750 45,000 56,250 67,500 78,750
200,000............ 45,000 60,000 75,000 90,000 105,000
250,000............ 56,250 75,000 93,750 112,500 131,250
300,000............ 67,500 90,000 112,500 135,000 157,500
350,000............ 78,750 105,000 131,250 157,500 183,750
400,000............ 90,000 120,000 150,000 180,000 210,000
450,000............ 101,250 135,000 168,750 202,500 236,250
500,000............ 112,500 150,000 187,500 225,000 262,500
550,000............ 123,750 165,000 206,250 247,500 288,750
</TABLE>
The amounts shown in the foregoing table represent the annual pension
benefit payable to a participant for life only. The years of benefit service on
December 31, 1995 of the executive officers named in the Summary Compensation
Table on page 7 who participate in the Salaried Plan are as follows: Mr. Green -
30.6 years; Mr. Selis -- 21.5 years; Mr. Theis -- 3.0 years; Mr. Ruf -- 30.7
years; and Mr. Kessler -- 26.2 years.
All officers and salaried employees of the Company are participants in the
Salaried Plan, benefits under which are funded by contributions made by the
Company to a trust fund maintained by an independent trustee. Since the
Company's contributions to the Salaried Plan cannot be separately calculated for
each participant, the Summary Compensation Table does not include any portion of
the Company's contribution to the Salaried Plan for the year ended December 31,
1995. The Salaried Plan provides for a monthly pension benefit based on average
monthly compensation during the 60 consecutive month period during the 120
calendar months preceding retirement that produces the highest average and which
is equal to 1 1/2% of such average monthly compensation multiplied by the
participant's years of benefit service, subject to a minimum formula amount
unrelated to compensation. In no event, however, will annual compensation in
excess of $200,000, or $150,000 (such amounts may be adjusted from time-to-time
for increases in the cost of living), be taken into account in computing benefit
amounts under the Salaried Plan for any year ending after December 31, 1988, or
December 31, 1993, respectively. Benefits payable under this plan are not
subject to any deduction for Social Security or any other offset.
Compensation for purposes of the Salaried Plan and the Excess Benefit
Retirement Plans is total base pay and incentive compensation during the
calendar year including amounts deferred under the Long-Term Incentive Plan less
amounts deducted under the Savings Plan. Compensation for the purpose of the
Savings Plan and the Excess Benefit Retirement Plan is substantially the same as
shown in columns (c) and (d) of the Summary Compensation Table, including total
bonus referred to in footnote 1 thereto less amounts deducted under the Savings
Plan.
In addition to pension benefits payable upon retirement after reaching
normal retirement age (age 65 or five years of plan participation, whichever is
later), the Salaried Plan provides benefits upon early retirement and
termination due to the permanent closing of a mine, plant, division, or
department, as well as certain surviving spouse benefits. Participants are fully
vested in their accrued pension benefits after five years of service. The normal
method of payment of pension benefits is a straight life annuity form.
The Excess Benefit Retirement Plan is an unfunded excess benefit retirement
plan that provides benefits to Salaried Plan participants in a monthly amount
equal to the difference between the monthly benefit computed under the Salaried
Plan without regard to the maximum limitations on benefits imposed by Section
415, and maximum covered compensation under Section 401(a)(17), of the Code
9
<PAGE> 12
and the benefit actually payable from the Salaried Plan. The Excess Benefit
Retirement Plan also provides supplemental benefits to certain Salaried Plan
participants in an amount determined with reference to Salaried Plan provisions
in effect prior to January 1, 1989, in the event the provisions of the Salaried
Plan in effect after December 31, 1988, would result in a lesser benefit. Based
on current compensation levels, Mr. Green will be the only participant receiving
such a supplemental benefit from the Excess Benefit Retirement Plan, which
benefit is estimated to be equal to $5,843 annually commencing at normal
retirement age and continuing for life.
SUPPLEMENTAL
SAVINGS AND STOCK
OWNERSHIP PLAN
In addition to the Savings Plan and the ESOP, the Company also maintains
the Oglebay Norton Company Supplemental Savings and Stock Ownership Plan (the
"Supplemental Plan"), which provides supplemental benefits upon retirement or
other termination of employment to certain executive or managerial employees
selected to participate in the Supplemental Plan by the Compensation and
Organization Committee of the Board of Directors. The Supplemental Plan, which
is unfunded, provides a benefit upon retirement or other termination of
employment based upon the amount of Company contributions and forfeitures that
would have been allocated to a participant under the Savings Plan and the ESOP
but for certain limitations imposed by the Internal Revenue Code (the "Code"),
taking into consideration the investment results that would have occurred with
respect to such amounts under the Savings Plan and the ESOP and differing tax
treatment available for such amounts upon distribution. Benefits are payable in
cash only at such time and in such manner as the Compensation and Organization
Committee of the Board of Directors may select from among those methods
otherwise available under the Savings Plan and the ESOP, respectively. Benefits
under the Supplemental Plan are also subject to the conditions that a
participant neither engage in competition with the Company within the 10-year
period following his retirement or other termination of employment nor
wrongfully disclose any trade secret of the Company. Based on current
compensation levels, the only named executive officer eligible for benefits
under the Supplemental Plan is Mr. Green who would be entitled to a benefit of
$43,695.
OTHER
INFORMATION
Officer Agreements Effective Upon "Change in Control". The Company has
entered into separate agreements (collectively the "Officer Agreements") with
the named executive officers referred to in the Summary Compensation Table. The
Officer Agreements are designed to retain these officers and provide for
continuity of management in the event of any actual or threatened change in
control of the Company. Each Officer Agreement only becomes operative if a
"Change in Control" of the Company (as defined in the Officer Agreements) occurs
while the officer is in the employ of the Company.
Each Officer Agreement provides that, following a Change in Control, the
named executive officer will be entitled to continued employment with the
Company, or to continuing compensation in lieu of continuing employment, for a
specified period at a rate equal to the highest of (i) the rate in effect
immediately before the Change of Control, (ii) the rate in effect two years
before the Change in Control, or (iii) such greater rate as the Company may
determine. Each Officer Agreement also provides for a continuance at not less
than present levels of employee benefits generally available to executives
immediately before the Change in Control. Following a Change in Control, if an
officer (i) is terminated by the Company without "cause" (as defined in the
Officer Agreements) or (ii) terminates his employment for "good reason" (as
defined in the Officer Agreements), he will be entitled, until the last to occur
of (a) the end of the Contract Period and (b) the date six months after the
termination, to his base salary at the highest rate payable during the Contract
Period (as defined in the Officer Agreements) plus participation in specified
employee benefit plans as if he continued as an executive officer of the
Company. The officer is obligated to endeavor to mitigate damages by seeking
comparable employment elsewhere and, to the extent he receives compensation and
benefits from another employer, the foregoing payments and benefits provided by
the Company will be reduced. In each Officer Agreement, the officer agrees that
he will forfeit the foregoing payments and benefits if he engages in
"competition" with the Company during the period that any payments are made or
benefits are provided under the Officer Agreement and agrees not to disclose to
others, either while in the employ of the Company or thereafter, any
confidential information relating to the Company. For each
10
<PAGE> 13
of the named executive officers who is a party to an Officer Agreement, the
contract period is 30 months from the date of the Change in Control of the
Company. Each Officer Agreement provides that the benefits to the named
executive officer will be reduced if and to the extent necessary to prevent the
treatment of any portion of the benefits as an excess parachute payment under
Sections 280G and 4999 of the Code.
Agreement With Officer. Effective April 1, 1995, the Company entered into
an employment agreement with R. Thomas Green, Jr. The agreement has a three-year
term unless terminated by either party upon certain conditions. The agreement
provides for an annual base salary of not less than $276,600 and participation
in the Company's benefit plans available to executive officers generally,
including the Excess Benefit Retirement Plan. In the event that the agreement is
terminated prior to March 31, 1998, by the Company without "cause" (as defined
in the agreement) or by the employee for "good reason" (as defined in the
agreement), the Company is generally obligated to continue to pay and provide to
Mr. Green the base salary and benefits otherwise provided for under the
agreement through March 31, 1998. In the event of a Change of Control of the
Company that results in Mr. Green becoming entitled to benefits under both his
Officer Agreement and the early termination provisions of the employment
agreement, Mr. Green shall be entitled to the payments and benefits under
whichever agreement is most favorable to him, but he shall not be entitled to
double payments with respect to any calendar period. The agreement expires on
March 31, 1998.
Irrevocable Trust Agreements. The Company has established two irrevocable
trusts to provide additional assurances to former and current officers and
executives of the Company, who are or may become entitled to benefits under
various executive benefit plans and contracts with the Company, that benefits
under those plans and contracts will be paid when due. Irrevocable Trust
Agreement I is intended to provide such additional assurances with respect to
benefits under salary continuation and post retirement death benefit plans as
well as under a 1974 Supplemental Retirement Plan, all of the participants in
which have already retired from the service of the Company. Irrevocable Trust
Agreement II is intended to provide such additional assurances with respect to
benefits or other payments due under the Excess Benefit Retirement Plan, the
Supplemental Plan, the employment agreement with Mr. Green, an employment
agreement with a former executive officer of the Company, and the Officer
Agreements. The Company has contributed certain Company-owned life insurance
policies to the trust held under Irrevocable Trust Agreement I but has not
contributed any other significant assets to either of the trusts. At the
discretion of the Executive Committee of the Board of Directors, the Company may
contribute additional assets to either or both trusts. Any assets held in either
trust will be subject to the claims of the Company's general creditors so long
as the assets remain in the trust. Until benefits are paid out of one of the
trusts, an executive will have no right with respect to those assets and his
status as an unsecured creditor of the Company will remain unchanged. If the
funds in the trusts are insufficient to pay amounts due under a plan or
agreement, the Company will remain obligated to pay those amounts.
Compensation Committee Interlocks and Insider Participation. Malvin E.
Bank, a member of the Compensation and Organization Committee of the Board of
Directors of the Company, is a partner of the law firm of Thompson Hine & Flory
P.L.L., Cleveland, Ohio, which provided legal services to the Company in 1995
and continues to provide such services in 1996.
- --------------------------------------------------------------------------------
REPORT OF THE
COMPENSATION
COMMITTEE ON
EXECUTIVE
COMPENSATION
The Compensation and Organization Committee of the Board of Directors of
the Company (the "Committee") seeks to compensate executive officers of the
Company in a manner that reflects each officer's contribution to the long-term
success of the Company. The compensation policy is designed to attract and
retain those executive officers who are able to make significant contributions
to both the long-term and short-term success of the Company.
Long-Term Incentive Plan. The Committee has determined to enhance the
performance orientation of its executive compensation program by supplementing
its current short-term incentive bo-
11
<PAGE> 14
nus program with the Oglebay Norton Long-Term Incentive Plan (the "Long-Term
Incentive Plan"), a program intended to serve as incentive for performance to
occur over a period longer than one fiscal year and to provide for equity-based
compensation for executive officers and other key employees. The Long-Term
Incentive Plan is subject to the approval of the stockholders at this Annual
Meeting. See Proposal to approve the Oglebay Norton Company Long-Term Incentive
Plan, at page 15 in this Proxy Statement.
The Committee believes that the Company will be better able to attract,
retain and motivate its executives to achieve superior financial performance if
a portion of executive compensation is equity-based, thereby promoting the
ownership and holding of the Company's common stock by its officers. In so
doing, the Committee believes its executives' financial interests will be more
closely aligned with that of the Company's common stockholders and that
management will have an additional incentive to contribute to the Company's
future success and prosperity.
As described in the "Summary of Plan Features", the Long-Term Incentive
Plan provides executives with the opportunity to defer a portion of any bonus
received under the Company's existing short-term Annual Incentive Plan. Amounts
deferred will be invested in "share units" based on the fair market value of the
Company's common stock on the date the bonus otherwise would have been due, and
will be paid, once the plan is approved by stockholders, only in the common
stock of the Company. Deferred amounts will generally be payable only upon
termination of employment, death or retirement. The Committee believes that this
equity-based deferral arrangement, along with the five-year vesting schedule for
all matching contributions made by the Company on deferred amounts (which
contributions will also be invested in Company "share units"), provides
executives of the Company with an incentive for longer-term commitments to the
Company and encourages long-term share ownership. The Committee also believes
that the deferral program will serve as an incentive for executive decisions and
activities meant to enhance shareholder value.
In addition to the deferral program, the Long-Term Incentive Plan provides
the Committee with the authority to grant equity-based awards, including Stock
Options, Stock Appreciation Rights and Restricted Stock, to the Company's
officers and other key employees. The Committee believes that these features
provide the Company with additional compensation components which will serve to
further align management's interests with the interests of stockholders while
providing a long-term incentive for the enhancement of stockholder value.
Finally, the Long-Term Incentive Plan authorizes the Committee to grant
Performance Awards to the Company's officers and other key employees, which
awards will be payable upon the attainment of certain performance criteria
determined by the Committee. The Performance Awards will be payable at the end
of a particular performance period only to the extent the performance goals have
been met and may be paid in cash or in shares of the Company's common stock. By
conditioning a portion of management's compensation on long-term
performance-based criteria, the Committee believes that the authority to grant
Performance Awards will provide the Company with an additional method of
motivating the Company's officers to achieve superior financial performance.
The Committee urges stockholders to approve the Long-Term Incentive Plan to
enable the Company to establish a component of its executive compensation
program which provides for long-term incentives for its officers and key
employees and promotes ownership by management of the Company's common stock.
Annual Salary. In 1995, executive officers' annual compensation packages,
including that of the Chief Executive Officer, were comprised of an annual
salary and an annual bonus. Executive officers' annual salaries, including that
of the Chief Executive Officer (subject to the terms of his employment
agreement, discussed below), were set by the Committee after consideration of
several factors. Most importantly, the Company's financial performance and its
business and financial prospects for the coming years were considered. The
impact of general economic conditions on these factors was also considered.
Further, each executive officer's contribution to the Company's performance in
1995, including that of the Chief Executive Officer, and the Company's prospects
for the future were reviewed. A determination was also made as to whether or not
each executive officer, including the Chief Executive Officer, achieved
satisfactory performance and business plan objectives.
Salaries for comparable positions with other companies with sales and
revenues similar to that of
12
<PAGE> 15
the Company were also considered. This comparison group of companies is not
identical to those companies included in the ValueLine Composite Index or the
S&P 500 Composite Index, both of which indices are used in the graph showing the
5-year cumulative total shareholder return on page 14. These indices are
broad-based composites of companies with comparable market capitalization and
size. They do not necessarily include companies competing in the same businesses
as does the Company, nor do they necessarily include companies that would
compete for the talent and executive skills that the Company desires to retain.
Executive officers, including the Chief Executive Officer, who make
positive contributions to the prospects of the Company and who meet specified
objectives will be awarded an annual salary that the Committee believes will
reward that officer for his or her contributions to the success of the Company
and assure that the officer will remain with the Company and continue to make
positive contributions. With respect to 1995, the Committee reviewed executive
officer salaries and recommended to the Board that selected adjustments be made,
based on an overall assessment of individual executive officer performance and
the assumption of new responsibilities on the part of certain executive
officers.
Incentive Compensation. Beginning with the year ended December 31, 1994,
in addition to annual salary, executive officers, including the Chief Executive
Officer, were eligible to receive cash bonuses under the Company's Annual
Incentive Plan (the "Incentive Plan"). The Incentive Plan was adopted by the
Committee in February 1994 and was effective for the year that began on January
1, 1994. The Incentive Plan is designed to directly link executive officer
compensation with both corporate and individual performance.
Under the Incentive Plan, the Committee establishes corporate, business
unit and individual performance measures, such as income from operations or
return on assets or achievement of specified corporate or business unit
strategic objectives, for the coming year. The Committee also establishes
specific performance goals applicable to each such measure. The amount of the
incentive award under the Incentive Plan, if any, to a participant, including
the Chief Executive Officer, is based on the participant's target award level,
the weightings assigned to each corporate, business unit and individual
performance measure applicable to the participant and achievement of those
goals.
Target awards are determined with reference to the participant's base
salary. The target award for the Chief Executive Officer is 50% of base salary;
and for senior executive and other officers, 15 to 35% of base salary. Actual
awards may range from 0% to 150% of target awards, depending on the extent to
which performance goals are met or exceeded. If threshold performance goals are
not achieved, no award may be made under the Incentive Plan. Notwithstanding the
amount of any incentive award otherwise payable under the Incentive Plan, the
Committee may increase or decrease the amount of the award by a maximum of 25%.
The corporate and business unit performance measures for 1995 under the
Incentive Plan were corporate income from operations and business unit operating
profit, respectively. For corporate participants, the corporate performance
measure accounted for 75% of the 1995 award and the individual performance
measures represented 25%. For business unit participants, corporate performance,
business unit performance and individual performance accounted for 35%, 50% and
15% respectively, of the 1995 award.
Corporate and most business unit performance goals were exceeded in 1995
and, excluding the award to the Chief Executive Officer, awards for the
executive officers under the Incentive Plan for 1995, after giving effect to the
applicable weightings and achievement or non-achievement, as the case may be, of
individual performance goals, ranged from 102% to 142% of the individual
executive officers' target awards.
Chief Executive Officer. For Mr. Green, the Company's Chief Executive
Officer, the Committee recommended for approval by the Board of Directors a base
salary of $276,600 effective January 1, 1995. As discussed below under the
heading "Agreement With Officer" on page 11, Mr. Green is entitled to a minimum
base salary of $276,600 under his employment agreement with the Company. In
recommending Mr. Green's 1995 base salary, the Committee considered Mr. Green's
performance in continuing to execute the new Strategic Plan, the Company's
financial performance and his salary level relative to the salary levels of
other Chief Executive Officers in companies which compete in similar markets and
businesses.
13
<PAGE> 16
In addition to his base salary, Mr. Green was also eligible for an award
under the Incentive Plan ranging from 0% to 150% of his target award. Mr.
Green's target award was 50% of his 1995 base salary. As noted above, the actual
award under the Incentive Plan is based on achievement of the performance goals
for each performance measure applicable to a participant and the weightings
assigned to the performance measures applicable to that participant. As a
corporate participant in the Incentive Plan, Mr. Green's incentive award was
based on a weighting of 75% assigned to the corporate performance measure
(income from operations) and 12.5% assigned to each of two individual
performance measures. The performance goal applicable to the corporate
performance measure was exceeded and the performance goals applicable to the two
individual performance measures was met, resulting in an award of $170,000 under
the Incentive Plan. Mr. Green's award represented a payout of approximately 122%
of his target award.
Federal Income Tax Regulations. Subject to certain exceptions, Section
162(m) of the Internal Revenue Code precludes a publicly held corporation from
taking a deduction for certain compensation in excess of $1 million paid or
accrued with respect to the executive officers of the Company. Section 162(m) is
not currently expected to have an impact on the deductibility of compensation
paid by the Company. Further discussion of Section 162(m) as it relates to the
Long-Term Incentive Plan being proposed for shareholder approval is provided in
the "Summary of Plan Features" portion of this Proxy Statement.
This report was prepared and adopted by the Compensation and Organization
Committee of the Board of Directors of Oglebay Norton Company, none of whose
members is a former or current officer or employee of the Company or any of its
subsidiaries.
COMPENSATION AND
ORGANIZATION COMMITTEE
William G. Bares, Chairman
Malvin E. Bank
Ralph D. Ketchum
John D. Weil
February 28, 1996
- --------------------------------------------------------------------------------
COMPARISON
OF FIVE-YEAR
CUMULATIVE
RETURN
The following graph shows a five-year comparison of cumulative total
shareholder return for the Company, S&P 500 Composite Index and ValueLine
Composite Index. The graph assumes dividend reinvestment and that the value of
the Company's shares of common stock and each index was $100 as of December 31,
1990. As a diversified marine transportation, mining and manufacturing concern,
the Company is not easily categorized with other more specific industry indices.
Further, many of the companies with which the Company competes are private, and
peer group comparative data is not available.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN -- OGLEBAY NORTON COMPANY,
S&P 500 COMPOSITE INDEX AND VALUELINE COMPOSITE INDEX
<TABLE>
<CAPTION>
S&P 500 VALUELINE
MEASUREMENT PERIOD OGLEBAY NOR- COMPOSITE COMPOSITE
(FISCAL YEAR COVERED) TON STOCK INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 100 131 127
1992 83 141 136
1993 83 155 151
1994 119 157 142
1995 150 215 169
</TABLE>
14
<PAGE> 17
- --------------------------------------------------------------------------------
PROPOSAL NUMBER 2
APPROVAL OF THE OGLEBAY NORTON COMPANY
LONG-TERM INCENTIVE PLAN
PROPOSAL TO
APPROVE THE
OGLEBAY NORTON
COMPANY
LONG-TERM
INCENTIVE PLAN
The Company's Board of Directors believes that attracting, retaining and
motivating its executives to achieve superior financial performance is a key
component of the Company's growth and success. In this regard, the Board of
Directors believes that equity-based compensation provides an important
incentive for executive decisions and activities meant to enhance shareholder
value. In addition, these types of equity-based pay components promote the
ownership and holding of the Company's common stock by its officers. In so
doing, the Board of Directors believes its executives' financial interests will
be more closely aligned with that of the Company's common stockholders and that
management will have an additional incentive to contribute to the Company's
future success and prosperity.
In light of these benefits, on December 13, 1995, the Board of Directors
adopted, subject to stockholder approval at the 1996 Annual Meeting of
Stockholders, the Oglebay Norton Company Long-Term Incentive Plan (the
"Long-Term Incentive Plan"). The terms of the Long-Term Incentive Plan provide
executives with the opportunity to invest incentive awards received under the
Company's Annual Incentive Plan in the Company's common stock and also gives the
Compensation Committee of the Board of Directors (the "Committee") the authority
to grant a variety of equity-based awards, including stock options and stock
appreciation rights. In addition, the Long-Term Incentive Plan provides the
Committee with the ability to condition the exercisability or payment of such
awards on the attainment of certain pre-established performance goals. Upon
approval of the Long-Term Incentive Plan by the Company's stockholders, the plan
will meet the requirements of Section 162(m) of the Internal Revenue Code and
the regulations promulgated thereunder ("Section 162(m)"). As a result, to the
extent applicable, grants and awards made under the Long-Term Incentive Plan may
qualify as "performance-based" compensation for purposes of Section 162(m).
SUMMARY OF PLAN FEATURES. The following summary is a brief description of
the material provisions of the Long-Term Incentive Plan.
Administration. The Long-Term Incentive Plan is administered by the
Committee. To the extent applicable, each member of the Committee must be a
"disinterested person" as defined under Rule 16b-3 of the Securities Exchange
Act of 1934, as amended ("Rule 16b-3"), and an "outside director" as defined
under Section 162(m). Subject to the terms of the Long-Term Incentive Plan, the
Committee will have the authority to select participants, determine the terms of
any deferral or grant made under the Long-Term Incentive Plan, and interpret,
construe and supervise the administration of the plan.
Participants. Those officers and other key employees selected by the
Committee will be eligible to elect to defer a portion of their annual incentive
award or to be granted awards under the plan. Eligible officers may include
those officers named in the Summary Compensation Table. At present, there are
eight (8) officers selected for participation in the Long-Term Incentive Plan.
Shares Available under the Plan; Award Limitations. Pursuant to the terms
of the Long-Term Incentive Plan, the maximum number of shares authorized with
respect to the deferrals or grant of awards under the Long-Term Incentive Plan
is one hundred thousand (100,000) shares of the Company's common stock, one
dollar ($1.00) par value per share. In addition, the maximum number of shares of
common stock covered by deferrals or awards under the Long-Term Incentive Plan
provided or granted to any participant for any year may not exceed ten thousand
(10,000). In addition, the amount of cash which may be paid to a participant
during any year in connection with any award made to that participant may not
exceed an amount equal to that calculated by multiplying the greater of the
15
<PAGE> 18
fair market value of the Company's common stock at the date of grant or the date
of settlement by 10,000 (the total number of shares available for grant or
deferral to any participant during any year). Upon the event of a merger,
reorganization, consolidation, stock split, stock dividend or other
recapitalization of the Company's stock, the Committee will take any action it
deems necessary to preserve the benefits to participants in the plan, including,
without limitation, adjusting the aggregate number of shares reserved under the
plan and the maximum number of shares which may be available for grant or
deferral to any participant.
On March 12, 1996, the closing price of the Company's common stock as
quoted by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") was $40.00 per share.
ANNUAL INCENTIVE DEFERRAL PROGRAM.
Election to Defer and Investment. The Long-Term Incentive Plan provides
participants with the ability to elect to defer the receipt of all or a portion
of any incentive award payable to such participant under the Oglebay Norton
Company Annual Incentive Plan. Such deferred amounts will be converted into
"share units" based on the fair market value of the common stock of the Company
on the date the deferred incentive award would have otherwise been paid.
Dividends in an amount equal to the actual dividends paid on the Company's
common stock will be credited to the share units allocated to a participant's
deferral account and will be converted into share units based on the fair market
value of the Company's common stock on the applicable dividend payment date.
Matching Contributions. Pursuant to the terms of the Long-Term Incentive
Plan, the Company will make an annual matching contribution of fifty percent
(50%) of the participant's deferred incentive award made for that year. In
addition, the Committee has the discretion to make an additional matching
contribution of up to fifty percent (50%) of a participant's annual deferred
incentive award. The Committee may condition the receipt of an additional
discretionary matching contribution on the attainment of specified performance
measures, additional vesting requirements or other limitations. Similar to the
incentive award deferrals, matching contributions are converted into share units
based on the fair market value of the Company's common stock on the date
allocated to a participant's account.
Vesting. All annual incentive award deferrals (and related dividends) are
one hundred percent (100%) vested at all times. Matching contributions (and
related dividends) become one hundred percent (100%) vested on the fifth
anniversary of the date they are allocated to a participant's account, assuming
the employee has been in continuous service with the Company for the entire
five-year period. Prior to the fifth anniversary of a particular allocation, a
matching contribution may become one hundred percent (100%) vested upon the
occurrence of certain events, including, without limitation, a participant's
early retirement or disability or a "change of control" (as such term is defined
under the terms of the plan).
Distributions. All distributions will be made in the common stock of the
Company, unless stockholder approval of the Long-Term Incentive Plan is not
obtained (in which case all distributions will be made in cash based upon the
fair market value of the Company's common stock at the time of distribution).
Distributions of all vested amounts will be made upon a participant's
retirement, death or other termination of employment, upon a "change of control"
(as such term is defined under the terms of the Long-Term Incentive Plan), or
upon any other event deemed appropriate by the Committee. A participant may
elect to make in-service withdrawals of all or a portion of his incentive award
deferrals (and related dividends), provided that the withdrawn deferrals have
been allocated to the participant's account for at least a five-year period
prior to withdrawal. Upon taking such a withdrawal, all of a participant's
matching contributions will be immediately forfeited.
LONG-TERM INCENTIVE PROGRAM
Types of Grants and Awards. The Long-Term Incentive Plan also provides for
the grant of options (which may be "incentive stock options", within the meaning
of Section 422 of the Internal Revenue Code, or nonqualified options), stock
appreciation rights, restricted stock and performance awards.
Exercise Price of Options. As determined by the Committee, the exercise
price under any option will be not less than the fair market value of the
Company's common stock ($1 par value) at the date of grant, provided, however,
that the exercise
16
<PAGE> 19
price under an incentive stock option granted to a holder of more than ten
percent (10%) of the voting power of the Company's stock may not be less than
one hundred and ten percent (110%) of such fair market value on the date of
grant. The exercise price of an option may be paid in cash, check, common stock
of the Company owned by the optionee or by sale of shares acquired in the
exercise of the option, or any combination thereof.
Exercise, Term and Transferability of Options. Pursuant to the terms of the
Long-Term Incentive Plan, stock options may not be exercised during the six
months following the date of grant. Thereafter, the options may be exercised in
accordance with the terms of the option as determined by the Committee,
including, without limitation, the requirement that an option be exercisable on
an installment basis. An option will expire in accordance with the terms
established by the Committee, but may not be exercisable more than ten years
after the date of grant (provided, however, that an incentive stock option
granted to the owner of more than ten percent (10%) of the voting power of the
Company's stock may not have a term in excess of five years).
In general, an option may only be exercised while the optionee is an
employee and will terminate, unless otherwise determined by the Committee, upon
the termination of an optionee's employment for reasons other than death,
"Disability" or "Retirement" (as such terms are defined for purposes of the
Long-Term Incentive Plan). An option may, however, be exercised (to the extent
exercisable upon the optionee's termination) for the lesser of three months or
the balance of such option's term, if the optionee is involuntarily terminated
by the Company without "Cause" (as such term is defined for purposes of the
Long-Term Incentive Plan). If an optionee's employment is terminated by reason
of death, Disability or Retirement, an option will become immediately
exercisable and may thereafter be exercised for a period equal to the shorter of
two years from the date of such termination (or such shorter period specified by
the Committee) or until the expiration of the term of the option. Any incentive
stock option exercised following the termination of employment due to Disability
or Retirement will be treated as a non-qualified option to the extent such
exercise occurs after the expiration of the applicable exercise periods under
Section 422 of the Code. To the extent required to qualify for any applicable
exemption, options granted under the Long-Term Incentive Plan (and any other
awards deemed to be "derivative securities" for purposes of Rule 16b-3) will
generally be non-transferable.
Cash-out of Option. Pursuant to the terms of the Long-Term Incentive Plan,
the Committee may, upon notice of exercise, elect to cash out all or part of the
portion of the option to be exercised and pay the optionee an amount equal to
the excess of the fair market value of the Company's common stock over the
option price (the "Spread Value"). The payment of the Spread Value may be made,
at the Committee's discretion, in cash or common stock of the Company,
including, if the terms of the option so designate, restricted shares of the
Company's common stock.
Stock Appreciation Rights. The Committee has the authority to grant
"tandem" and "non-tandem" stock appreciation rights ("Tandem SARs" and
"Non-Tandem SARs", respectively) under the Long-Term Incentive Plan. Tandem SARs
may be granted in conjunction with all or part of any option or other award
granted under the Long-Term Incentive Plan and provide the holder with the right
to surrender to the Company all or a portion of an option or other award in
exchange for an amount equal to the Spread Value. Non-Tandem SARs are granted
separately from an option or other award under the Long-Term Incentive Plan and
provide the holder with the right to receive an amount equal to the difference
between (a) the fair market value, as of the exercise date, of a number of
shares of the Company's common stock designated in the grant of the right, and
(b) the fair market value of such shares as of the date the right is granted.
A Tandem SAR will terminate and no longer be exercisable upon the
termination or exercise of the related option, except that, unless otherwise
determined by the Committee, a Tandem SAR granted with respect to less than the
full number of shares covered by a related option will not be reduced until the
number of shares covered by the termination or exercise of the option exceeds
the number of shares not covered by the Tandem SAR. Tandem SARs may be exercised
by surrendering the applicable portion of the related option. Options which are
so surrendered, in whole or in part, will no longer be exercisable to the extent
the related Tandem SARs have been exercised. Non-Tandem SARs granted under the
Long-Term Incentive Plan
17
<PAGE> 20
will be subject to such terms and conditions as are determined by the Committee
in accordance with the provisions of the Long-Term Incentive Plan.
Restricted Stock. The Committee may grant awards to participants
consisting of shares of restricted stock, with respect to which the Committee is
authorized to condition the vesting on the attainment of specified performance
goals or such other factors as the Committee may determine. See "Performance
Goals", below. In general, the acquisition price for shares of restricted stock
may be equal to or less than their par value or may be zero. Subject to the
terms of any particular grant, shares of restricted stock granted under the
Long-Term Incentive Plan will be subject to the restrictions that, for a set
period of time (the "Restriction Period"), the grantee not sell, transfer,
pledge, assign or otherwise encumber shares of restricted stock awarded to such
grantee under the Long-Term Incentive Plan. Within these limits, and subject to
the terms of the Long-Term Incentive Plan, the Committee is authorized to
provide for the lapse, waiver or acceleration of such restrictions, in whole or
in part, based on such factors, including performance criteria, which the
Committee determines.
Holders of shares of restricted stock granted under the Long-Term Incentive
Plan will have full voting and dividend rights with respect to such shares,
provided, however, that the Committee may determine, at the time the grant is
made, to permit or require the payment of cash dividends to be deferred or
reinvested in additional shares of restricted stock. Upon termination of a
participant's employment with the Company for any reason during the Restriction
Period, all shares still subject to restrictions will be forfeited by the
participant, provided, however, that in the case of hardship or other special
circumstances, the Committee may waive, in whole or in part, any or all
remaining restrictions with respect to shares of restricted stock held by a
participant whose employment with the Company is involuntarily terminated
without Cause.
Notwithstanding the foregoing, no action on the part of the Committee to
provide for the lapse, waiver or acceleration of any restrictions may be taken
with respect to shares of restricted stock granted under the Long-Term Incentive
Plan which are intended to qualify as "performance-based" compensation under
Section 162(m) to the extent any such action would cause the shares to fail to
so qualify.
Performance Awards. The Committee may grant to eligible participants
performance awards with respect to which the participant's receipt of value will
be contingent upon attainment of one or more pre-established performance goals
set by the Committee during a particular period of time (a "Performance
Period"). See "Performance Goals", below. At the beginning of each Performance
Period, the Committee will determine the range of dollar values or number of
shares of common stock to be awarded to the participant at the end of the
Performance Period if and to the extent the relevant performance goals related
to the particular performance award are met. The Committee has the discretion,
subject to the terms of the Long-Term Incentive Plan, in the event of special or
unusual events or circumstances affecting the application of any performance
objective, to revise the performance objectives applicable to any performance
award to avoid unintended windfalls or hardship.
If a participant's employment is terminated other than due to death,
Disability or Retirement, the participant will not be entitled to any payment
with respect to a performance award, except as otherwise determined by the
Committee. Unless otherwise designated by the Committee in the applicable award
agreement, upon termination of employment during a Performance Period because of
death, Disability or Retirement, such participant may be entitled to payment
with respect to an outstanding performance award at the end of the applicable
Performance Period (a) based upon the participant's performance, to the extent
relevant, for the portion of the Performance Period ending on the date of
termination and the performance of the applicable business unit for the entire
Performance Period and (b) where deemed appropriate by the Committee, prorated
for the portion of the Performance Period during which the participant was
employed by the Company. In addition, the Committee may provide for an earlier
payment in settlement of the award in an amount and upon such terms and
conditions as the Committee deems appropriate.
The earned portion of any performance award may be paid currently or
deferred with interest or earnings as may be determined by the Committee.
Payment may be made in the form of cash or shares of common stock of the
Company, including shares of restricted stock, and may be paid in a lump sum or
in installments, as the Committee may determine at or after grant.
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<PAGE> 21
Notwithstanding the foregoing, no revision may be made, or other action
taken, with respect to any performance shares granted under the Long-Term
Incentive Plan which are intended to qualify as "performance-based" compensation
under Section 162(m) to the extent any such revision or action would cause the
shares to fail to so qualify.
Performance Goals. With respect to performance awards and restricted stock
grants made under the Long-Term Incentive Plan, the Committee will have the
discretion to set such performance objectives as it deems appropriate. Such
performance objectives may vary from participant to participant and between
groups of participants and will be based upon such Company, business unit and/or
individual performance factors and criteria as the Committee may deem
appropriate, including, but not limited to, earnings per share and return on
equity. Notwithstanding the foregoing, in the event that any grant of
performance awards or restricted stock is intended to qualify as
"performance-based" compensation under Section 162(m), such performance
objectives will be limited to stock price, market share, sales, earnings per
share, return on assets, return on equity, costs, cash flow or any combination
thereof.
Effect of Change of Control. The Committee has the authority, in its
discretion, to provide at the time of a grant of any award under the Long-Term
Incentive Plan, that the terms of the grant or the date on which an award vests
or becomes exercisable may be modified in the event of a change-of-control.
Subject to the terms of the Long-Term Incentive Plan, the Committee may
determine at any time at or after a particular grant (a) the criteria used to
determine whether a change-of-control has occurred and (b) whether a change-of-
control has in fact occurred. Notwithstanding the foregoing, no modification may
be made upon a change-of-control with regard to any award intended to qualify as
"performance-based" compensation under Section 162(m) to the extent any such
modification would cause the award to fail to so qualify.
Amendment and Term of the Long-Term Incentive Plan. The Board of Directors
may amend, alter or discontinue the Long-Term Incentive Plan at any time and
from time to time, provided, however, that no such amendment, alteration or
discontinuation may be made which would impair the rights of a participant with
respect to any outstanding deferral or award without the participant's consent.
In addition, no amendment, alteration, or discontinuation may be made without
the approval of the Company's stockholders which would (a) increase the total
number of shares reserved for purposes of the Long-Term Incentive Plan, (b)
extend the maximum option period applicable under the Long-Term Incentive Plan,
(c) otherwise cause the Long-Term Incentive Plan to fail to qualify for an
exemption under Rule 16b-3 it is seeking to rely upon, or (d) otherwise cause
the Long-Term Incentive Plan to fail to satisfy the requirements of applicable
securities or tax law or the applicable rules and regulations promulgated by
NASDAQ.
Subject to the terms of the Long-Term Incentive Plan, the effectiveness of
the Long-Term Incentive Plan is conditioned on the approval of the Long-Term
Incentive Plan by the stockholders of the Company. All awards made under the
Long-Term Incentive Plan, if any, prior to the date upon which the stockholders
of the Company approve the Long-Term Incentive Plan shall be null and void if
the Long-Term Incentive Plan is not so approved. Notwithstanding the foregoing,
all deferrals of annual incentive awards made pursuant to the provisions of the
Long-Term Incentive Plan prior to the attainment of stockholder approval shall
continue to be effective without stockholder approval, provided, however, that
payment of such deferrals will be made only in cash, rather than in the common
stock of the Company.
New Plan Benefits Table. The following table reflects the amount of share
units allocated to participant accounts for each of the persons and groups
identified as a result of matching contributions made by the Company on deferred
annual incentive awards earned under the Oglebay Norton Company Annual Incentive
Plan for 1995. The dollar value of grants and awards under the Long-Term
Incentive Plan to the persons and groups identified are not presently
determinable.
19
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NEW PLAN BENEFITS
OGLEBAY NORTON COMPANY LONG-TERM INCENTIVE PLAN (1)
<TABLE>
<CAPTION>
Name and Position Units
------------------------------------------------------------------- --------
<S> <C>
R. Thomas Green, Jr. 1,307.69
Chairman, President and Chief Executive Officer
John L. Selis 217.95
Vice President -- Iron Ore
Stuart H. Theis 62.82
Vice President -- Marine Transportation
H. William Ruf 225.00
Vice President -- Administrative and Legal Affairs
Richard J. Kessler 556.41
Vice President -- Finance and Development
Executive Group 3,207.05
Non-Executive Director Group -0-
Non-Executive Officer Employee Group -0-
<FN>
- ---------------
(1) Share units noted reflect the matching contributions made to each of the
named executives and the Executive Group under the Long-Term Incentive
Program, matching contributions are made in an amount which equal to 50% of
the portion of an executives' bonus elected to be deferred under the Long-
Term Incentive Plan. Share units attributed to all defined bonus amounts are
also allocated to each executive's account.
</TABLE>
Federal Income Tax Consequences of Awards.
The following is a brief general discussion of the anticipated income tax
treatment of the deferral of incentive awards and the grant and exercise of
awards to participants and to the Company under current provisions of the
Internal Revenue Code.
Annual Incentive Deferral Program. In general, an employee who receives
payment of an annual incentive award in cash or in shares of common stock of the
Company will recognize compensation income at the time of payment equal to the
amount of the payment or the fair market value of the shares, and the Company
will be entitled to a compensation deduction at the same time for the same
amount. If the employee elects to defer receipt of the payment, the employee
generally will not recognize compensation income, and the Company will not be
entitled to a compensation deduction, until the time of the payment.
Incentive Stock Options. The grant of an incentive stock option will have
no immediate tax consequences to the Company or the optionee. If the optionee
has remained an employee of the Company from the date of grant until at least
the day three months before the date of exercise (one year before the date of
exercise in the case of an employee who is disabled), the optionee will
recognize no taxable income and the Company will not be entitled to any tax
deduction at the time of exercise of an incentive stock option. However, the
amount by which the fair market value of the acquired shares at the time of
exercise exceeds the exercise price will be an adjustment to alternative minimum
taxable income for purposes of the alternative minimum tax. If an optionee
exercises an incentive stock option more than three months after terminating
employment (one year in the case of an employee who is disabled), the exercise
of the option will be treated in the same manner as the exercise of a
nonqualified stock option.
If an optionee holds the shares received upon exercise of an incentive
option for at least two years after the date of grant and for at least one year
from the date of exercise, gain or loss on a subsequent sale of the shares will
be a long-term capital gain or loss. If an optionee disposes of shares acquired
upon exercise of an incentive stock option before these holding periods are
satisfied, the optionee generally will recognize compensation income equal to
the lesser of (a) the excess of the fair market value of the stock on the
exercise date over the exercise price or (b) the excess of the amount realized
on disposition over the exercise price. Any additional gain will be taxable as a
short-term capital gain, and any loss will be treated as short-term capital
loss. Upon any
20
<PAGE> 23
such premature disposition by an employee, the Company will be entitled to a
deduction in the amount of compensation income realized by the employee. For
purposes of calculating the alternative minimum tax for the year of the
disposition of a share acquired upon exercise of an incentive stock option, any
adjustment to alternative minimum taxable income reported upon exercise of the
incentive stock option will be included in the basis of the share.
Nonqualified Stock Options. The grant of a nonqualified stock option will
have no immediate tax consequences to the Company or the optionee. An optionee
will recognize compensation income at the time of exercise of a nonqualified
option in an amount equal to the difference between the exercise price and the
fair market value on the exercise date of the acquired shares. The Company will
be entitled to a deduction in the same taxable year and in the same amount as an
optionee recognizes compensation income as a result of the exercise of a
nonqualified option, provided that the Company satisfies applicable withholding
requirements.
Stock Appreciation Rights. Grants of Tandem SARs or Non-Tandem SARs will
have no immediate tax consequences to the Company or the participant receiving
the grant. The amount received by a participant upon the exercise of a Tandem
SAR or Non-Tandem SAR will constitute compensation income to the participant at
the time of exercise. The Company will be entitled to a deduction for
compensation paid in that amount at that time.
Restricted Stock. Unless a participant makes an election under Section
83(b) of the Internal Revenue Code, a participant will recognize no income and
the Company will be entitled to no deduction at the time restricted stock is
awarded to a participant. As and when the restrictions on restricted stock lapse
or are otherwise removed, the participant will recognize compensation income
equal to the excess of the fair market value of the restricted stock on the date
the restrictions lapse or are otherwise removed over the amount paid by the
participant for the restricted stock, if any, and the Company will be entitled
to a corresponding deduction for compensation paid, provided that the Company
satisfies applicable withholding requirements. Dividends paid on restricted
stock during the restriction period will constitute compensation income to the
participant receiving the dividend and will give rise to a deduction for the
Company. Upon disposition of common stock of the Company after the restrictions
lapse or are otherwise removed, any gain or loss realized by a participant will
be treated as short-term or long-term capital gain or loss depending upon the
period of time between the disposition and the earlier lapse or removal of the
restrictions on those shares of common stock. If a participant files an election
under Section 83(b) with the Internal Revenue Service within 30 days after the
grant of restricted stock, the participant will recognize compensation income on
the date of the grant, equal to the excess of the fair market value of the
shares of common stock of the Company on that date over the price paid for those
shares and the Company will be entitled to a corresponding deduction, provided
the Company satisfies applicable withholding requirements. Dividends paid on
restricted stock after an election under Section 83(b) of the Internal Revenue
Code has been made will be taxed as dividends and will not be deductible by the
Company. Any gain or loss realized by a participant upon a disposition of
restricted stock after an election under Section 83(b) of the Internal Revenue
Code has been made will be treated as short-term or long-term capital gain or
loss depending upon the period of time between the disposition and the earlier
date of grant.
Performance Awards. The grant of performance awards will not have any
immediate tax consequences to a participant receiving the performance awards or
to the Company. In general, at the time the Company pays any amount in cash, or
in unrestricted shares of common stock of the Company, to an employee with
respect to performance awards, the participant will recognize compensation
income equal to the amount of that payment, or the fair market value of the
unrestricted shares of common stock of the Company at the time of payment, and
the Company will be entitled to a corresponding deduction. If the payment to an
employee with respect to performance awards is made in restricted stock, the tax
consequences described above with respect to restricted stock will apply.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH IN THIS SECTION IS INCLUDED FOR
GENERAL INFORMATION ONLY AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR
LISTING OF ALL POTENTIAL TAX CONSEQUENCES. THE DISCUSSION DOES NOT ADDRESS THE
TAX CONSEQUENCES ARISING
21
<PAGE> 24
UNDER THE LAWS OF ANY STATE, LOCALITY, OR FOREIGN JURISDICTION. THE DISCUSSION
IS BASED UPON THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, TREASURY
REGULATIONS THEREUNDER, AND ADMINISTRATIVE RULINGS AND COURT DECISIONS AS OF THE
DATE HEREOF. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH CHANGE
COULD AFFECT THE CONTINUING VALIDITY OF THE DISCUSSION. PLAN PARTICIPANTS SHOULD
CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM,
INCLUDING THE EFFECT OF FOREIGN, STATE, AND LOCAL TAXES.
The favorable vote of the holders of a majority of the Company's common
stock present in person or by proxy at the meeting will be required for such
approval.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE LONG-TERM INCENTIVE PLAN.
- --------------------------------------------------------------------------------
OTHER INFORMATION
RELATED
PARTY
TRANSACTIONS
Oglebay Norton Industrial Sands, Inc., a wholly owned subsidiary of the
Company, sells ground silica to, and purchases heavy density grinding media and
ceramic mill lining from, Ferro Corporation. Mr. Bersticker is the Chairman and
Chief Executive Officer of Ferro Corporation. During the fiscal year ended
December 31, 1995, total sales to and purchases from Ferro Corporation by
Oglebay Norton Industrial Sands, Inc. were $293,650 and $408,227, respectively.
The transactions described in this section were entered into by the Company
pursuant to arm's length negotiations in the ordinary course of business and on
terms the Company believes to be fair.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 31, 1995, is
being mailed to each stockholder with this Proxy Statement.
INDEPENDENT
AUDITORS
Ernst & Young LLP has been appointed as the Company's independent auditors
for the fiscal year ending December 31, 1996, pursuant to the recommendation of
the Company's Audit Committee. A representative of Ernst & Young LLP is expected
to be present at the meeting with an opportunity to make a statement if the
representative desires to do so and to respond to appropriate questions with
respect to that firm's examination of the Company's consolidated financial
statements and records for the fiscal year ended December 31, 1995.
1997 ANNUAL
MEETING
The 1997 Annual Meeting of Stockholders is presently scheduled to be held
on April 30, 1997. The deadline for stockholders to submit proposals to be
considered for inclusion in the proxy statement for that meeting is November 26,
1996.
By Order of the DAVID G. SLEZAK,
Board of Directors Secretary and Director
of Legal Affairs
March 27, 1996
22
<PAGE> 25
[OGLEBAY NORTON LOGO]
<PAGE> 26
OGLEBAY NORTON COMPANY
LONG-TERM INCENTIVE PLAN
<PAGE> 27
OGLEBAY NORTON COMPANY
LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
Table of Contents
-----------------
Page
----
<S> <C> <C> <C>
ARTICLE I - PURPOSE AND DEFINITIONS
Section 1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Definitions and Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - STOCK SUBJECT TO THE PLAN
Section 2.1 Stock Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Annual Per-Participant Limitations . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Computation of Stock Available for the Plan . . . . . . . . . . . . . . . . 5
Section 2.4 Unused, Forfeited and Reacquired Shares . . . . . . . . . . . . . . . . . . 5
Section 2.5 Other Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III - ELIGIBILITY
Section 3.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV - ANNUAL INCENTIVE DEFERRAL PROGRAM
Section 4.1 Election to Defer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Investment of Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.3 Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.4 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.5 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.6 In-Service Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V - LONG-TERM INCENTIVE PROGRAM
Section 5.1 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.2 Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.3 Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.4 Performance Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI - ADMINISTRATION, GENERAL PROVISIONS
Section 6.1 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.2 Authority of the Committee . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.3 Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.4 Unfunded Status of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.5 Change-of-Control Provisions . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.6 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.7 Effective Date of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.8 Term of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.9 Proceeds and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.11 Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.12 Awards in Substitution for Awards Granted by Other Companies . . . . . . . 22
</TABLE>
<PAGE> 28
OGLEBAY NORTON COMPANY
LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSE AND DEFINITIONS
SECTION 1.1 PURPOSE. The name of this plan is the Oglebay Norton Company
Long-Term Incentive Plan (the "Plan"). The purpose of the Plan is to promote
ownership and holding of Oglebay Norton Company stock by key employees, thereby
reinforcing a mutuality of interest with other stockholders, and to enable the
Company to attract, retain and motivate key employees by sharing in the growth
of the value of the Company.
This Plan is an integrated compensation and incentive program composed of five
(5) operative long-term incentive compensation features. These separate
incentive compensation programs are designed to accomplish distinct purposes
under uniform administration and with a common goal of maximizing stockholder
value.
SECTION 1.2 DEFINITIONS AND USAGE. For the purposes of the Plan, the
following terms, when used with initial capital letters, shall have the
meanings as set forth below:
"ACCOUNT" means the bookkeeping account established by the Company for
a Participant who elects to defer a portion of his Annual Incentive
Award pursuant to Article IV which will reflect the deferrals,
matching contributions and dividends allocable to him pursuant to
Article IV.
"AFFILIATE" means (a) a corporation which, for purposes of Section 422
of the Code, is a parent or subsidiary of the Company, and (b) any
other entity in which the Company has a substantial equity investment,
as designated by the Committee.
"ANNUAL INCENTIVE AWARD" means the amount payable to a Participant
under the Oglebay Norton Company Annual Incentive Plan.
"ANNUAL INCENTIVE AWARD DEFERRALS" means the portion of the Annual
Incentive Award that a Participant elects to defer pursuant to Section
4.1.
"BASE AMOUNT" means the amount of the Annual Incentive Award that the
Participant elects to receive immediately upon payment.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means, in connection with an involuntary termination by the
Company of a Participant's employment, (a) the willful and continued
failure by the Participant to perform substantially the duties of the
Participant's position or (b) the willful engaging by
<PAGE> 29
the Participant in conduct which is demonstrably injurious to the
Company, monetarily or otherwise.
"CHANGE OF CONTROL" means (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 Exchange Act, disclosing that any "person" (as the
term "person" is defined 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 twenty-five
percent (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 6(e) of Schedule 14A
thereunder that a Change in Control of the 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 fifty percent (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 twenty-four (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 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 twenty-four (24) month period.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
"COMMITTEE" means the Compensation and Organization Committee of the
Board or any subcommittee thereof established by the Board.
"COMPANY" means the Oglebay Norton Company, a corporation organized
under the laws of the State of Delaware, or any successor
organization.
"DISABILITY" means a disability covered under the Oglebay Norton
Company Long-Term Disability Insurance Plan.
"DISINTERESTED PERSON" shall have the meaning set forth in Rule
16b-3(c)(2) of the Rules.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
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"FAIR MARKET VALUE" means, with respect to a share of Stock as of any
given day, the last reported closing price for a share of Stock on the
National Association of Securities Dealers Automated Quotations System
("NASDAQ") for the day as of which such determination is being made
or, if there was no sale of Stock so reported for such day, on the
most recently preceding day on which there was such a sale; or if the
Stock is not listed or admitted to trading on NASDAQ on the day as of
which the determination is being made, the amount determined by the
Committee to be the fair market value of a share of Stock on such day.
"INCENTIVE STOCK OPTION" means any Stock Option intended to qualify as
an "incentive stock option" within the meaning of Section 422 of the
Code.
"INSIDER" means a Participant who is subject to the requirements of
the Rules.
"MATCHING CONTRIBUTIONS" means the Company contribution made on behalf
of Participants who elect to defer a portion of their Annual Incentive
Award as provided in Section 4.3.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
"OUTSIDE DIRECTOR" shall have the meaning set forth in Treasury
Regulation Section 1.162-27(e)(3).
"PARTICIPANT" means an employee to whom an award is granted pursuant
to the Plan or who is eligible to defer and elects to defer a portion
of his Annual Incentive Award under Article IV.
"PERFORMANCE AWARD" means an award made pursuant to Section 5.4 that
is payable in cash and/or Stock (including Restricted Stock) in
accordance with the terms of the grant, based on Company, business
unit and/or individual performance goals over a period of time.
"PLAN" means the Oglebay Norton Company Long-Term Incentive Plan, as
hereinafter amended from time to time.
"RESTRICTED STOCK" means an award of shares of Stock that is subject
to restrictions pursuant to Section 5.3.
"RETIREMENT" means a Participant's retirement from active employment
with the Company and each of its Affiliates pursuant to which the
Participant is entitled to receive a normal, early, disability or
shutdown retirement pension under the Oglebay Norton Company Pension
Plan for Salaried Employees.
"RULES" means Section 16 of the Exchange Act and the regulations
promulgated thereunder.
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"STOCK" means the common stock, one dollar ($1.00) par value per
share, of the Company.
"STOCK APPRECIATION RIGHT" means the rights granted pursuant to an
award under Section 5.2.
"STOCK OPTION" or "OPTION" means any option to purchase shares of
Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5.1.
Except where otherwise indicated by the context, any masculine terminology used
herein also shall include the feminine and vice versa, and the definition of
any term herein in the singular also shall include the plural and vice versa.
References herein to Articles, Sections and Subsections are references to
provisions in this Plan.
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<PAGE> 32
ARTICLE II
STOCK SUBJECT TO THE PLAN
SECTION 2.1 STOCK SUBJECT TO PLAN. The Stock to be subject or related to
awards under the Plan may be either authorized and unissued or held in the
treasury of the Company. The maximum number of shares of Stock authorized with
respect to the deferrals or grant of awards under the Plan, subject to
adjustment in accordance with Section 2.52.4 below, shall be one hundred
thousand (100,000).
SECTION 2.2 ANNUAL PER-PARTICIPANT LIMITATIONS. The maximum number of shares
of Stock covered by deferrals or awards under the Plan provided to any
Participant for any year shall not exceed ten thousand (10,000), subject to
adjustment in accordance with Section 2.5 below. In addition, for awards
settled in cash (in whole or in part), the maximum cash amount payable with
respect deferrals or awards under the Plan to any Participant for any year
shall not exceed the greater of the Fair Market Value of the number of shares
of Stock set forth in the preceding sentence at the date of grant or the date
of settlement of the award.
SECTION 2.3 COMPUTATION OF STOCK AVAILABLE FOR THE PLAN. For the purpose
of computing the total number of shares of Stock generally available under the
Plan, under Article IV and Sections 5.1, 5.2, 5.3 and 5.4, respectively, for
award at any time during which the Plan is in effect, there shall be debited
against the total number of shares of Stock determined to be available under
this Article II, the maximum number of shares of Stock subject to issuance upon
exercise of options or other stock based awards made under the Plan.
SECTION 2.4 UNUSED, FORFEITED AND REACQUIRED SHARES. The shares related to
the unexercised or undistributed portion of any terminated, expired or
forfeited award under the Plan shall be made available in connection with
future awards under the Plan in addition to the shares determined available
pursuant to Sections 2.1, 2.2 and 2.3.
SECTION 2.5 OTHER ADJUSTMENT. In the event of any merger, reorganization,
consolidation, recapitalization, Stock dividend, Stock split or other change in
corporate structure affecting the Stock, the Committee shall take any action
which in its discretion it deems necessary to preserve benefits to Participants
in this Plan, including, without limitation, substitution or adjustment in the
aggregate number of shares reserved for issuance under the Plan, in the number
and option price of shares subject to outstanding Options granted under the
Plan and in the number and price of shares subject to other awards made under
the Plan, or substitution of property or other securities for Stock, Stock
Options or Restricted Stock covered by any awards under this Plan.
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<PAGE> 33
ARTICLE III
ELIGIBILITY
SECTION 3.1 ELIGIBILITY. Officers and other key employees of the Company or
an Affiliate (but excluding members of the Committee and any person who serves
only as a director) who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company and/or its
Affiliates are eligible, upon selection by the Committee, to elect to defer a
portion of their Annual Incentive Award and/or to be granted awards under the
Plan.
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<PAGE> 34
ARTICLE IV
ANNUAL INCENTIVE DEFERRAL PROGRAM
SECTION 4.1 ELECTION TO DEFER. A Participant may elect to defer the receipt
of all or a portion of his Annual Incentive Award for any year by selecting the
applicable percentage of his Annual Incentive Award (in ten percent (10%)
increments) to be deferred for that year. In the alternative, a Participant
may elect to defer the portion of his Annual Incentive Award for a year that
exceeds a Base Amount set by the Participant. No election to defer under this
Section shall be effective unless the Participant completes a deferral election
agreement provided by the Committee (indicating the amount of deferrals and the
form of distribution of amounts held in his Account) for that year and files
the properly completed and executed agreement with the Committee on or before
such date as is necessary to defer an award for Federal income tax purposes.
Once a Participant has made an effective Annual Incentive Award Deferral
election for a year, he may not thereafter change that election for that year.
SECTION 4.2 INVESTMENT OF DEFERRALS. Annual Incentive Award Deferrals under
this Article will be converted into share units based on the Fair Market Value
of the Stock on the date that the deferred Annual Incentive Award otherwise
would have been paid to the Participant. Dividends equal to the actual Stock
dividends paid shall be credited to the share units in the Participant's
Account, and shall in turn be converted into share units based on the Fair
Market Value of the Stock on the date such dividends are paid. If shareholder
approval is not obtained as provided in Section 6.7, share units will be
settled in cash at the time of distribution under this Article based on the
Fair Market Value of those units at the time of distribution.
SECTION 4.3 MATCHING CONTRIBUTION. Each year, the Company will make a
Matching Contribution to a Participant's Account equal to fifty percent (50%)
of the Participant's Annual Incentive Award Deferral made for that year. Such
Matching Contribution shall be made at the same time the Annual Incentive Award
Deferral is made to the Participant's Account. In addition, prior to the time
for making deferral elections for that year, the Committee, in its sole
discretion, may determine to award an additional Matching Contribution of up to
fifty percent (50%) on a Participant's Annual Incentive Award Deferral;
provided, however, that a Participant's entitlement to such additional Matching
Contribution may be conditioned on such factors as the Committee may establish
at the time the additional Matching Contribution is granted, including, without
limitation, satisfaction of certain performance measures, additional vesting
requirements or other limitations or restrictions set by the Committee.
Matching Contributions will be invested in the same manner as provided for
Annual Incentive Award Deferrals pursuant to Section 4.2.
SECTION 4.4 VESTING. All Annual Incentive Award Deferrals pursuant to Section
4.1 (and dividends generated from those deferrals) will be one hundred percent
(100%) vested at all times. Matching Contributions pursuant to Section 4.3
(and dividends generated from those amounts) will become one hundred percent
(100%) vested on the fifth anniversary of the date those Matching Contributions
are allocated to a Participant's Account, provided that the Participant has
been in continuous service with the Company or an Affiliate for that entire
five (5) year period.
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<PAGE> 35
Notwithstanding the foregoing, Matching Contributions made within the most
recent five (5) year period will become one hundred percent (100%) vested (a)
upon the Participant's early, normal, disability or shutdown retirement (as
those terms are defined in the Oglebay Norton Company Pension Plan for Salaried
Employees); (b) upon a Change of Control; (c) upon a sale or other disposition
of an Affiliate, provided that this Subsection shall apply only to a
Participant who is employed at such Affiliate at the time of such sale or
disposition and who is not provided a comparable position with the Company or
another Affiliate after such sale or disposition; or (d) upon any other event
as the Committee shall deem appropriate in its sole discretion. Upon a
Participant's in-service withdrawal of Annual Incentive Award Deferrals
pursuant to Section 4.6, all Matching Contributions attributable to those
deferrals will be immediately forfeited.
SECTION 4.5 DISTRIBUTIONS.
(a) Upon a Participant's retirement (under the terms of the Oglebay
Norton Company Pension Plan for Salaried Employees), death, other termination
of employment from the Company and all Affiliates, upon a Change or Control, or
upon any other event as the Committee shall deem appropriate in its sole
discretion, all of a Participant's Annual Incentive Award Deferrals (and
dividends generated from those deferrals) and the vested portion of a
Participant's Matching Contributions (and dividends generated from those
amounts) allocated to the Participant's Account shall be distributed. Such
distributions shall be made or commence as soon as administratively feasible
following the event that entitles the Participant to a distribution.
(b) Distributions under this Article will be made either in a lump
sum or in equal annual installments of up to ten (10) years, as elected by the
Participant on the most recent deferral election agreement filed by that
Participant with the Committee; provided, however, that no deferral election
agreement completed within twenty-four (24) months of the Participant's
entitlement to a distribution under this Section will be effective with respect
to the form of distribution and, instead, the immediately prior deferral
election agreement of the Participant shall be used to determine the form of
distribution. Notwithstanding the Participant's election as to the form of
distribution, any vested Matching Contributions (and dividends generated from
those amounts), made within the most recent five (5) years before entitlement
to a distribution will automatically be paid in five (5) annual installments.
(c) All distributions under this Article shall be made in shares of
Stock; provided, however, that if shareholder approval is not obtained as
provided in Section 6.7, share units will be settled in cash at the time of
distribution under this Section based on the Fair Market Value of those units
at the time of distribution.
(d) Notwithstanding the foregoing, any Annual Incentive Award
Deferral and the vested portion of any Matching Contribution which are actually
made in the year after a Participant has received or commenced to receive his
distribution shall be paid in the following manner: (i) if the Participant has
already received a lump sum distribution, the additional Annual Incentive Award
Deferral will be paid in a lump sum as soon as administratively feasible
following its deferral; (ii) if the Participant is receiving installment
payments, the additional Annual Incentive Award Deferral will be added to the
deferral amounts not yet paid and distributed, pro rata, for the remainder of
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<PAGE> 36
the existing installment term; and (iii) if the Participant is entitled to
vested Matching Contributions, those additional vested Matching Contributions
will be subject to the five (5) year installment requirement of Subsection (b),
will be added to the Matching Contributions not yet paid under that five (5)
year schedule and will be distributed pro rata for the remainder of the
existing five (5) year term.
SECTION 4.6 IN-SERVICE WITHDRAWALS. While employed by the Company or an
Affiliate, a Participant may elect to withdraw all or a portion of his Annual
Incentive Award Deferrals (and dividends generated from those deferrals),
provided that the Annual Incentive Award Deferrals withdrawn must have been
allocated to the Participant's Account for at least five (5) years prior to the
time of the withdrawal. Withdrawals shall be made by completing a withdrawal
election form provided by the Committee and filing that form with the
Committee. Upon taking an in-service withdrawal, all Matching Contributions
associated with the amount of Annual Incentive Award Deferrals withdrawn will
be immediately forfeited by the Participant.
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ARTICLE V
LONG-TERM INCENTIVE PROGRAM
SECTION 5.1 STOCK OPTIONS. Stock Options may be granted alone, in
addition to or in tandem with other awards granted under the Plan. Any Stock
Option granted under the Plan shall be in such form as the Committee may from
time to time approve.
The Committee shall have the authority to grant any optionee Incentive Stock
Options, Non-Qualified Stock Options or both types of Stock Options (in each
case with or without Stock Appreciation Rights). To the extent that any Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock Option
under such Section 422 of the Code.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
but shall be not less than one hundred percent (100%) of the Fair Market Value
of the Stock at the time of grant. Notwithstanding the preceding, the
Committee, in its discretion, may determine a Stock Option price of less than
the Fair Market Value of the Stock at the time of grant, if such Stock Option
is granted as a substitute for a stock option granted by an entity which has
been merged with or acquired by the Company or an Affiliate and such substitute
grant is made in connection with such merger or acquisition. Any Incentive
Stock Option granted to any optionee who, at the time the option is granted,
owns more than ten percent (10%) of the voting power of all classes of stock of
the Company or of an Affiliate shall have an exercise price no less than one
hundred and ten percent (110%) of Fair Market Value per share on date of the
grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by
the Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted. However, any Incentive Stock
Option granted to any optionee who, at the time the option is granted owns more
than ten percent (10%) of the voting power of all classes of stock of the
Company or of an Affiliate may not have a term of more than five (5) years. No
Option may be exercised by any person after expiration of the term of the
Option.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Committee at or after grant; provided, however, that, except as provided in
Section 5.1(d) and Section 6.5, and unless otherwise determined by the
Committee at or after grant, no Stock Option shall be exercisable during the
six
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<PAGE> 38
(6) months following the date of the granting of the Option. If the Committee
provides, in its discretion, that any Stock Option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time at or after grant in whole or in part, based on such factors as the
Committee shall determine, in its sole discretion.
(d) TERMINATION BY REASON OF DEATH, DISABILITY OR RETIREMENT. If an
optionee's employment by the Company and any Affiliate terminates by reason of
death, Disability or Retirement, any Stock Option held by such optionee will
immediately vest and may thereafter be exercised by the optionee or by the
legal representative of the estate or by the legatee of the optionee under the
will of the optionee, for a period of two (2) years (or such shorter period as
the Committee may specify at grant) from the date of such termination or until
the expiration of the stated term of such Stock Option, whichever period is the
shorter. In the event of termination of employment by reason of Disability or
Retirement, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.
(e) OTHER TERMINATION. Unless otherwise provided in this Plan, or
otherwise determined by the Committee at or after grant, if an optionee's
employment by the Company terminates for any reason other than death,
Disability or Retirement, the Stock Option shall thereupon terminate, except
that such Stock Option may be exercised (to the extent exercisable upon the
optionee's termination) for the lesser of three (3) months or the balance of
such Stock Option's term if the optionee is involuntarily terminated by the
Company without Cause.
(f) INCENTIVE STOCK OPTION LIMITATIONS. To the extent required for
"incentive stock option" status under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the stock with
respect to which Incentive Stock Options are exercisable for the first time by
the optionee during any calendar year under the Plan and/or any other stock
option plan of the Company (within the meaning of Section 424 of the Code)
shall not exceed one hundred thousand dollars ($100,000).
(g) EXERCISE OF STOCK OPTIONS. An optionee may exercise a Stock
Option in whole or in part at any time and from time to time during the period
within which a Stock Option may be exercised. To exercise a Stock Option, an
optionee shall give written notice of exercise to the secretary of the Company
specifying the number of shares of Stock to be purchased; and provide payment
of the Option price for such shares of Stock by cash or check payable to the
order of the Company, by Stock owned by the optionee or by sale of shares of
Stock acquired in the exercise of a Stock Option (to the extent such cashless
exercise is permitted under rules promulgated by the Committee and under the
Rules) or any combination of Stock and cash or check. If payment of the Option
exercise price of a Non-Qualified Stock Option is made in whole or in part in
the form of unrestricted Stock already owned by the Participant, the Company
may require that the Stock be owned by the Participant for a period of six (6)
months or longer.
An optionee shall be treated for all purposes as the owner of record of the
number of shares of Stock purchased pursuant to exercise of the Stock Option
(in whole or in part) as of the date the conditions set forth in preceding
paragraph are satisfied. Notwithstanding the foregoing, no
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<PAGE> 39
exercise of a Stock Option shall be effective until the shares of Stock subject
to this Plan have been registered or qualified for sale under applicable
Federal and state securities laws, and no Stock Option shall be deemed granted
until this Plan is approved by the holders of Company stock having a majority
of the voting power of all stock represented at a meeting duly held in
accordance with Delaware law within twelve (12) months after this Plan is
adopted by the Board.
Upon the effective exercise of a Stock Option (in whole or in part) in
accordance with Subsection (h), the Committee shall deliver to the optionee the
number of shares of Stock for which the Stock Option is exercised, adjusted for
any shares of Stock sold or withheld in connection with such exercise.
(h) CASH-OUT OF OPTION; SETTLEMENT OF SPREAD VALUE IN RESTRICTED
STOCK. On receipt of written notice to exercise, the Committee may, in its
sole discretion, elect to cash out all or part of the portion of the Option(s)
to be exercised by paying the optionee an amount, in cash or Stock, equal to
the excess of the Fair Market Value of the Stock over the option price (the
"Spread Value") on the effective date of such cash-out.
In addition, if the option agreement so provides at grant or is amended after
grant and prior to exercise to so provide (with the optionee's consent), the
Committee may require that all or part of the shares to be issued with respect
to the Spread Value of an exercised option take the form of Restricted Stock,
which shall be valued on the date of exercise on the basis of the Fair Market
Value of such Restricted Stock determined without regard to the forfeiture
restrictions involved.
SECTION 5.2 STOCK APPRECIATION RIGHTS. Both Tandem Stock Appreciation Rights
and Non-Tandem Stock Appreciation Rights, as described below, may be granted to
Participants in the Plan.
(a) TANDEM STOCK APPRECIATION RIGHTS. A Tandem Stock Appreciation
Right is the right, granted under this Subsection, to surrender to the Company
all (or a portion) of a Stock Option or other award under this Plan in exchange
for an amount equal to the Spread Value, as defined in Section 5.1(h), of the
Stock (or portion of the Stock) covered by the associated Stock Option. Tandem
Stock Appreciation Rights may be granted in conjunction with all or part of any
Stock Option or other award granted under the Plan. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the
grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with respect
to a given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that, unless
otherwise determined by the Committee, in its sole discretion, at the time of
grant, a Stock Appreciation Right granted with respect to less than the full
number of shares covered by a related Stock Option shall not be reduced until
the number of shares covered by an exercise or termination of the related Stock
Option exceeds the number of shares not covered by the Stock Appreciation
Right.
A Stock Appreciation Right may be exercised by an optionee, in accordance with
this Subsection, by surrendering the applicable portion of the related Stock
Option. Upon such exercise and
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surrender, the optionee shall be entitled to receive an amount determined in
the manner prescribed in this Subsection. Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to the extent
the related Stock Appreciation Rights have been exercised.
Tandem Stock Appreciation Rights shall be subject to such terms and conditions,
not inconsistent with the provisions of the Plan, as shall be determined from
time to time by the Committee.
(b) NON-TANDEM STOCK APPRECIATION RIGHTS. A Non-Tandem Stock
Appreciation Right is a right granted pursuant to this Subsection to receive an
amount equal to the difference between (i) the Fair Market Value, as of the
date such Right is exercised, of a number of shares of Stock specified in the
grant of such Right, and (ii) the Fair Market Value of such shares of Stock as
of the date such Right is granted.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee.
SECTION 5.3 RESTRICTED STOCK.
(a) ADMINISTRATION. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee may
condition the vesting of Restricted Stock upon the attainment of specified
performance goals or such other factors as the Committee may determine, in its
sole discretion; provided, however, that specified performance goals intended
to satisfy the requirements of Section 162(m) of the Code shall be
preestablished and objective in accordance with Section 162(m) and the
regulations thereunder, may vary among Participants and among groups of
Participants, and shall be based upon such Company, business unit and/or
individual objective performance factors and criteria as the Committee may deem
appropriate, including and limited to stock price, market share, sales,
earnings per share, return on assets, return on equity, costs, cash flow and
any combination thereof.
(b) RESTRICTIONS AND CONDITIONS. Each award of Restricted Stock
hereunder shall be subject to the following:
(i) The prospective recipient of a Restricted Stock award
shall not have any rights with respect to such award,
unless and until such recipient has executed an
agreement evidencing the award and has delivered a fully
executed copy thereof to the Company and has otherwise
complied with the applicable terms and conditions of
such award.
(ii) The purchase price for shares of Restricted Stock may be
equal to or less than their par value and may be zero,
unless otherwise required under applicable state law.
(iii) Awards of Restricted Stock must be accepted within a
period, to be determined by the Committee at the time of
the grant, after the award date,
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by executing a Restricted Stock agreement and paying
whatever price (if any) is required under this Section.
(iv) Except as otherwise specified by the Committee, each
Participant receiving a Restricted Stock award shall be
issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered
in the name of such Participant and shall bear an
appropriate legend referring to the terms, conditions
and restrictions applicable to such award, substantially
in the following form:
The transferability of this certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of
the Oglebay Norton Company Long-Term Incentive Plan
and an agreement entered into between the
registered owner and the Oglebay Norton Company.
Copies of such Plan and agreement are on file in
the offices of the Oglebay Norton Company, 1100
Superior Avenue, Cleveland, Ohio 44114.
(v) The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company
until the restrictions thereon shall have lapsed, and
that, as a condition of any Restricted Stock award, the
Participant shall have delivered a stock power, endorsed
in blank, relating to the Stock covered by such award.
(vi) Subject to the provisions of this Plan and the
Restricted Stock agreement, during a period set by the
Committee commencing with the date of such award (the
"Restriction Period"), the Participant shall not be
permitted to sell, transfer, pledge, assign or otherwise
encumber shares of Restricted Stock awarded under the
Plan. Within these limits, the Committee, in its sole
discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive
such restrictions in whole or in part, based on service,
performance and/or such other factors or criteria as the
Committee may determine, in its sole discretion;
provided, however, that in no event shall any such
lapse, acceleration or waiver of restrictions occur with
respect to Restricted Stock that is intended to qualify
as performance-based compensation under Section 162(m)
of the Code (to the extent such lapse, acceleration or
waiver would cause such Restricted Stock to fail to so
qualify).
(vii) Each Restricted Stock award agreement shall provide that
the Restricted Stock covered by the agreement shall be
subject to a "substantial risk of forfeiture" (within
the meaning of Section 83 of the Code) for a period to
be determined by the Committee.
(viii) Except as provided above, the Participant shall have,
with respect to the shares of Restricted Stock, all of
the rights of a stockholder of the Company,
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<PAGE> 42
including the right to vote the shares and the right to
receive any cash dividends. The Committee, in its sole
discretion, as determined at the time of award, may
permit or require the payment of cash dividends to be
deferred and, if the Committee so determines, reinvested
in additional Restricted Stock to the extent shares are
available under Article II.
(ix) Subject to the applicable provisions of the Restricted
Stock agreement and this Section and unless otherwise
determined by the Committee, upon termination of a
Participant's employment with the Company for any reason
during the Restriction Period, all shares still subject
to restriction shall be forfeited by the Participant.
(x) In the event of hardship or other special circumstances
of a Participant whose employment with the Company is
involuntarily terminated (other than for Cause), the
Committee may, in it sole discretion, waive in whole or
in part any or all remaining restrictions with respect
to such Participant's shares of Restricted Stock, based
on such factors as the Committee may deem appropriate;
provided, however, that in no event shall any such
waiver of restrictions occur with respect to Restricted
Stock that is intended to qualify as performance-based
compensation under Section 162(m) of the Code (to the
extent such waiver would cause such Restricted Stock to
fail to so qualify).
(xi) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares
shall be delivered to the Participant promptly.
SECTION 5.4 PERFORMANCE AWARDS.
(a) AWARDS AND ADMINISTRATION. Performance Awards may be awarded
either alone or in addition to other awards granted under the Plan. The
Committee shall determine the nature, length and starting date of the
performance period (the "Performance Period") for each Performance Award, which
shall be subject to Section 6.5, and shall determine the performance objectives
to be used in valuing Performance Awards and determining the extent to which
such Performance Awards have been earned. Performance objectives may vary from
Participant to Participant and between groups of Participants and shall be
based upon such Company, business unit and/or individual performance factors
and criteria as the Committee may deem appropriate, including, but not limited
to, earnings per share or return on equity; provided, however, that performance
objective intended to satisfy the requirements of Section 162(m) of the Code
shall be preestablished and objective in accordance with Section 162(m) and the
regulations thereunder, and such performance factors and criteria shall be
limited to stock price, market share, sales, earnings per share, return on
assets, return on equity, costs, cash flow and any combination thereof.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Performance Awards that are subject to different Performance
Periods and/or different performance factors and criteria.
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<PAGE> 43
At the beginning of each Performance Period, the Committee shall determine for
each Performance Award subject to such Performance Period the range of dollar
values or number of shares of Stock to be awarded to the Participant at the end
of the Performance Period if and to the extent that the relevant measure(s) of
performance for such Performance Award is (are) met. Such dollar values or
number of shares of Stock may be fixed or may vary in accordance with such
performance and/or other criteria as may be specified by the Committee, in its
sole discretion.
(b) ADJUSTMENT OF AWARDS. In the event of special or unusual events
or circumstances affecting the application of one or more performance
objectives to a Performance Award, the Committee may revise the performance
objectives and/or underlying factors and criteria applicable to the Performance
Awards affected, to the extent deemed appropriate by the Committee, in its sole
discretion, to avoid unintended windfalls or hardship; provided, however, that
in no event shall any such revision result in the increase in a Performance
Award or waiver of a performance goal if such Award or goal is intended to
qualify as performance-based compensation under Section 162(m) of the Code.
(c) TERMINATION OF EMPLOYMENT. Subject to Section 6.5 and unless
otherwise provided in the applicable award agreement(s), if a Participant
terminates employment with the Company during a Performance Period because of
death, Disability or Retirement, such Participant may be entitled to payment
with respect to each outstanding Performance Award at the end of the applicable
Performance Period as follows:
(i) to the extent relevant under the terms of the award,
based upon the Participant's performance for the portion
of such Performance Period ending on the date of
termination and the performance of the applicable
business unit(s) for the entire Performance Period, and
(ii) where deemed appropriate by the Committee, prorated for
the portion of the Performance Period during which the
Participant was employed by the Company, all as
determined by the Committee, in its sole discretion.
Notwithstanding the preceding, the Committee may provide for an
earlier payment in settlement of such award in such amount and
under such terms and conditions as the Committee deems
appropriate; provided, however, that in no event shall any such
earlier payment occur with respect to Performance Awards that
are intended to qualify as performance-based compensation under
Section 162(m) of the Code (to the extent such earlier payment
would cause such Performance Shares to fail to so qualify).
Subject to Section 6.5, if a Participant terminates employment
with the Company during a Performance Period for any reason
other than death, Disability or Retirement, then such
Participant shall not be entitled to any payment with respect to
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<PAGE> 44
the Performance Awards subject to such Performance Period,
unless the Committee shall otherwise determine, in its sole
discretion.
(d) TIMING AND FORM OF PAYMENT. The earned portion of a Performance
Award may be paid currently or on a deferred basis with such interest or
earnings equivalent as may be determined by the Committee, in its sole
discretion; provided, however, that no deferral of a Performance Award intended
to qualify as performance-based compensation under Section 162(m) of the Code
shall result in the deferred Performance Award earning a rate of interest based
on criteria other than a reasonable rate of interest or one or more
predetermined actual investments. Payment shall be made in the form of cash or
whole shares of Stock, including Restricted Stock, either in a lump sum payment
or in installments commencing as soon as practicable after the end of the
relevant Performance Period, all as the Committee shall determine at or after
grant.
(e) EFFECT OF PERFORMANCE AWARDS ON STOCK AVAILABLE UNDER ARTICLES
IV AND V. If and to the extent a Performance Award is payable in Stock and the
full amount of such value is not paid in Stock, then the shares of Stock
representing the portion of the value of the Performance Award not paid in
Stock shall again become available for award under this Article and Article IV.
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<PAGE> 45
ARTICLE VI
ADMINISTRATION, GENERAL PROVISIONS
SECTION 6.1 ADMINISTRATION. The Plan shall be administered by the Committee,
which at all times shall be comprised of not less than three (3) persons who
are: (a) Disinterested Persons, if required to qualify the Plan for an
exemption from Section 16(b) of the Exchange Act that is available under the
Rules; and (b) Outside Directors, if required to qualify compensation paid
under the Plan as performance-based compensation under Section 162(m) of the
Code. Members of the Board who qualify as Disinterested Persons and/or Outside
Directors shall perform the functions of the Committee if at any time the Board
has not appointed such members to comprise the Committee.
SECTION 6.2 AUTHORITY OF THE COMMITTEE. The Committee shall have the
authority to:
(a) select the officers and other key employees of the Company or an
Affiliate who may make deferral elections or to whom awards may
from time to time be granted hereunder, and to determine for
each such officer and other key employee the levels and other
terms and conditions of any stock-ownership requirements;
(b) grant to eligible employees, pursuant to the terms of the Plan,
Matching Contributions, additional Matching Contributions, Stock
Options, Stock Appreciation Rights, Restricted Stock,
Performance Awards and/or other permissible awards hereunder,
and determine the conditions, restrictions and procedures to be
applied to each such award;
(c) determine the terms and conditions, not inconsistent with the
terms of the Plan, of any deferral made or award granted
hereunder, including, but not limited to, the share price and
any restriction or limitation or any vesting acceleration or
forfeiture waiver regarding any deferral or award and/or the
shares of Stock relating thereto, based on such factors as the
Committee shall determine, in its sole discretion;
(d) take such action as it deems appropriate to comply with the
provisions of the Code, the Exchange Act and other applicable
laws, including any such action it deems appropriate under
Section 162(m) of the Code concerning the Federal income tax
deductibility of deferrals or awards granted hereunder
(including without limitation, determining preestablished,
objective performance goals and the method of computing awards,
reviewing award formulas and performance goals and criteria,
certifying whether performance goal measures have been
satisfied, and establishing a subcommittee consisting of
outside, independent directors for this purpose; provided,
however, that actions of any such subcommittee shall be subject
to ratification by the Committee);
(e) determine whether, to what extent and under what circumstances
any award under this Plan shall be deferred either automatically
or at the election of the Participant;
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<PAGE> 46
(f) amend the terms of any deferral made or award granted hereunder,
prospectively or retroactively; provided, however, that any such
amendment must be consistent with the provisions of this Plan,
and no such amendment shall impair the rights of a Participant
with respect to any outstanding deferral or award under the Plan
without his consent;
(g) interpret the terms and provisions of this Plan and any deferral
made or award granted hereunder (and any agreements relating
thereto), and otherwise settle all claims and disputes arising
under this Plan;
(h) delegate responsibility and authority for the operation and
administration of the Plan, appoint employees and officers of
the Company and Affiliates to act on its behalf, and employ
persons to assist in fulfilling its responsibilities under the
Plan; and
(i) adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time,
deem advisable, and otherwise supervise the administration of
this Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and
Participants.
The Committee may make decisions to take action under this Plan only by
majority action of all Committee members. The Committee may act without a
meeting only by written instrument signed by all members of the Committee.
SECTION 6.3 AMENDMENTS AND TERMINATION. The Board may amend, alter or
discontinue the Plan at any time and from time to time, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee or Participant with respect to any outstanding deferral or award under
the Plan without the optionee's or Participant's consent, or which, without the
approval of the Company's stockholders, would:
(a) except as expressly provided in this Plan, increase the total
number of shares reserved for the purpose of the Plan;
(b) extend the maximum Option period applicable under the Plan;
(c) otherwise cause the Plan to fail to qualify for an exemption it
is seeking to rely upon under the Rules; or
(d) otherwise cause the Plan to fail to satisfy the requirements of
any applicable securities or tax law or the applicable rules and
regulations promulgated under NASDAQ.
SECTION 6.4 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not
yet made to a Participant or optionee
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<PAGE> 47
by the Company, nothing contained herein shall give any such Participant or
optionee any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or payments in lieu of or with respect to deferrals or awards
hereunder; provided, however, that, unless the Committee otherwise determines
with the consent of the affected Participant, the existence of such trusts or
other arrangements shall be consistent with the "unfunded" status of the Plan.
SECTION 6.5 CHANGE-OF-CONTROL PROVISIONS. The Committee, in its discretion,
may provide at the time of a grant of any award under Article V that the terms
of the award, including, but not limited to, the method of determining Fair
Market Value, or the date on which an award vests or becomes exercisable, may
be modified in the event of a change-of-control; provided that in no event
shall such modification occur with respect to any award that is intended to
qualify as performance-based compensation under Section 162(m) of the Code (to
the extent such modification would cause the award to fail to so qualify).
Except as otherwise provided under this Plan, the Committee may determine at
any time at or after the grant of an award under Article V, (a) the criteria
used to determine whether a change-of-control has occurred, and (b) whether a
change-of-control has in fact occurred.
SECTION 6.6 GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant
to a Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee or Participant is acquiring the shares without a view
to distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer.
All certificates for shares of Stock or other securities delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Exchange Act, any stock exchange upon which the Stock is
then listed and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of
the Company or an Affiliate any right to continued employment with the Company
or an Affiliate, as the case may be, nor shall it interfere in any way with the
right of the Company or an Affiliate to terminate the employment of any of its
employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the Participant for applicable income tax
purposes with respect to any deferral or award
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<PAGE> 48
under the Plan, the Participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any Federal, state or
local taxes of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Committee, the minimum required
withholding obligations may be settled with Stock, including Stock that is part
of the deferral or award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
the Participant.
(e) At the time of grant under Article V, the Committee may provide
in connection with any grant made under this Plan that the shares of Stock
received as a result of such grant shall be subject to a right of first
refusal, pursuant to which the Participant shall be required to offer to the
Company any shares that the Participant wishes to sell, with the price being
the then Fair Market Value of the Stock, subject to such other terms and
conditions as the Committee shall specify at the time of grant.
(f) The reinvestment of dividends in additional Restricted Stock (or
in other types of Plan deferrals or awards) at the time of any dividend payment
shall only be permissible if sufficient shares of Stock are available under
Article II for such reinvestment (taking into account then outstanding Stock
Options and other Plan deferrals or awards).
(g) The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable in the event of the Participant's death are to be paid.
(h) The Plan and all deferrals or awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of
the State of Ohio, to the extent not preempted by Federal law.
SECTION 6.7 EFFECTIVE DATE OF PLAN. This Plan shall be effective on December
13, 1995; provided, however, that, except as provided in Article IV, the
effectiveness of this Plan is conditioned on its approval by an affirmative
vote of the holders of Company stock represented at a meeting duly held in
accordance with Delaware law within twelve (12) months after the date this Plan
is adopted by the Board. All awards under this Plan, other than those provided
in Article IV, shall be null and void if the Plan is not approved by such
stockholders within such twelve-month period. Notwithstanding the foregoing,
Article IV (and the provisions of the Plan necessary for the operation of
Article IV) shall continue to be effective without stockholder approval;
provided, however, that, if stockholder approval is not obtained, the
modifications described in Article IV relating to Stock equivalents and cash
distributions shall apply.
SECTION 6.8 TERM OF PLAN. No award under Article V shall be granted pursuant
to the Plan on or after the tenth anniversary of the earlier of the date of
stockholder approval or the date this Plan is adopted by the Board, but awards
granted prior to such tenth anniversary may extend beyond that.
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<PAGE> 49
SECTION 6.9 PROCEEDS AND EXPENSES. The proceeds received by the Company from
the sale of shares of Stock pursuant to the exercise of Stock Options shall be
used for general corporate purposes. The Company shall bear any expenses
associated with the administration of this Plan.
SECTION 6.10 SEVERABILITY. If any provision of this Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Plan, but this Plan shall be construed
and enforced as if such illegal or invalid provision had never been included
herein.
SECTION 6.11 ASSIGNABILITY. No Option, Stock Appreciation Right or other
"derivative security" (as defined for purposes of the Rules) awarded under the
Plan may be transferred other than (a) by will or by the laws of descent and
distribution, or (b) as otherwise hereafter permitted in accordance with the
Rules without jeopardizing or impairing any exemption provided for under the
Rules. Any restriction on the transferability of derivative securities
required by the Rules in order to qualify for an exemption under the Rules is
hereby incorporated in the Plan to the extent necessary to obtain the
applicable exemption.
SECTION 6.12 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER COMPANIES. To
the extent not otherwise provided in the Plan, awards (whether Stock Options,
Stock Appreciation Rights, Restricted Stock or Performance Awards) may be
granted under the Plan in substitution for awards held by employees of a
company who become employees of the Company or an Affiliate as a result of the
acquisition, merger or consolidation of the employer company by or with the
Company or an Affiliate. The terms, provisions and benefits of the substitute
awards so granted may vary from those set forth in or authorized by the Plan to
such extent as the Committee at the time of the grant may deem appropriate to
conform, in whole or in part, to the terms, provisions and benefits of awards
in substitution for which they are granted.
The undersigned, pursuant to the approval of the Board on December 13, 1995,
does herewith execute the Oglebay Norton Company Long-Term Incentive Plan.
/s/ H. William Ruf
----------------------------------
H. William Ruf
Vice President, Administration and
Legal Affairs
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<PAGE> 50
OGLEBAY NORTON COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 24, 1996
P At the Annual Meeting of Stockholders of Oglebay Norton Company to
R be held on April 24, 1996, in Suite 1200, 1100 Superior Avenue,
O Cleveland, Ohio 44114, and at any adjournment thereof, Albert C.
X Bersticker, John J. Dwyer and John D. Weil, and each of them, with
Y full power of substitution, are hereby authorized to represent me
and to vote my shares on the following:
1. Electing three directors of the class whose terms will expire in
1999. The nominees of the Board of Directors are: R. Thomas
Green, Jr., Ralph D. Ketchum and Renold D. Thompson.
Instruction: To withhold authority to vote for any individual
nominee(s), write the name of such nominee(s) on the line
adjacent to the voting box for Proposal 1 on the reverse side of
this proxy.
2. Approval of the Oglebay Norton Long-Term Incentive Plan
("Long-Term Incentive Plan"). Instruction: Please check whether
your shares are to be voted for or against approval of the
Long-Term Incentive Plan, or whether you elect to abstain by
marking your choice in the appropriate box for Proposal 2 on the
reverse side of this proxy.
3. Any other business which may properly come before the meeting
and all adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE SHAREHOLDERS SIGNING ON THE REVERSE SIDE OF
THIS PROXY. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF NOMINEES LISTED AND FOR PROPOSAL 2.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE> 51
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN CHANGE OF ADDRESS:
1. Election of [ ] [ ] 2. Approval of the [ ] [ ] [ ] Please indicate change of address
Directors Oglebay Norton and check box below:
(see reverse) Company Long-Term __________________________________
Incentive Plan __________________________________
__________________________________
For, except vote withheld from the following nominee(s): __________________________________
________________________________________________________ Change [ ] PLEASE SIGN, DATE AND RETURN
of THIS PROXY FORM PROMPTLY
Address
SIGNATURE(S)___________________________________________________ DATE___________
SIGNATURE(S)___________________________________________________ DATE___________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 52
OGLEBAY NORTON COMPANY
TWENTIETH FLOOR
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114
DAVID G. SLEZAK
SECRETARY AND
DIRECTOR OF LEGAL AFFAIRS March 27, 1996
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Re: Oglebay Norton Company
Gentlemen:
Accompanying this letter are the following materials for filing via
the EDGAR system with the Securities and Exchange Commission:
- 1996 Proxy Statement
- Proxy Card
Also enclosed is a copy of the Oglebay Norton Company Long-Term
Incentive Plan ("LTIP"), as per the directions in Instruction 3 of Item 10 of
Schedule 14A, for filing via the EDGAR system as an appendix to the Proxy
Statement. The LTIP is not part of the Proxy Statement, and copies were not
provided to stockholders.
Also enclosed, pursuant to Rule 14a-3(c), are seven copies of
Oglebay Norton Company's 1995 Annual Report to Stockholders. The financial
statements in the 1995 Annual Report to Stockholders reflect no changes from
the preceding year in any accounting principles or practices or in the method
of applying any such principles or practices. The 1995 Annual Report to
Stockholders is NOT filed via the EDGAR system.
If you have any questions, please feel free to call me directly, at
216-861-2884.
Thank you.
Sincerely,
DGS
cc: National Association of Securities Dealers, Inc.
