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REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
OGLEBAY NORTON HOLDING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
Ohio 4400 To Be Applied For
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NUMBER)
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1100 Superior Avenue, 20th Floor
Cleveland, Ohio 44114-2598
(216) 861-3300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID G. SLEZAK, ESQ.
Oglebay Norton Holding Company
c/o Oglebay Norton Company
1100 Superior Avenue, 20th Floor
Cleveland, Ohio 44114-2598
(216) 861-3300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
James R. Carlson
Thompson Hine & Flory LLP
3900 Key Center
127 Public Square
Cleveland, Ohio 44114-1216
(216) 566-5500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF NUMBER OF SHARES OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
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Common Shares,
$1.00 par value.............. 7,303,332 $37.125 $271,136,200.50 $79,985.18
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(1) Pursuant to Rule 457(f), the registration fee is calculated based upon the
average of the bid and asked prices on February 24, 1998 as reported on the
NASDAQ National Market of a share of Common Stock of Oglebay Norton Company,
a Delaware corporation, to be canceled in exchange for each Common Share of
the Registrant covered hereby.
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OGLEBAY NORTON HOLDING COMPANY
CROSS-REFERENCE SHEET SHOWING LOCATIONS IN PROXY STATEMENT-PROSPECTUS OF
INFORMATION REQUIRED BY EACH ITEM IN PART I OF FORM S-4
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ITEM CAPTION OR LOCATION IN
NO. FORM S-4 CAPTION PROXY STATEMENT-PROSPECTUS
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1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus....... Facing page of Registration Statement; Cross-Reference
Sheet; Cover Page of Proxy Statement-Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus................................... AVAILABLE INFORMATION; INFORMATION INCORPORATED BY
REFERENCE; TABLE OF CONTENTS
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information................ Cover Page of Proxy Statement-Prospectus; INFORMATION
INCORPORATED BY REFERENCE; SUMMARY; REORGANIZATION
PROPOSAL -- Voting Rights and Proxy
Information, -- Formation of Ohio Holding Company, --
Conditions to the Merger, -- Federal Income Tax
Consequences and -- Appraisal Rights; BENEFICIAL
OWNERSHIP OF OGLEBAY NORTON COMMON STOCK
4. Terms of the Transaction..................... REORGANIZATION PROPOSAL -- Formation of Ohio Holding
Company, -- No Material Effect on Financial Condition
or Results of Operations, -- Conditions to the Merger
and -- Federal Income Tax Consequences; REASONS FOR
THE REORGANIZATION; CAPITAL STOCK OF THE HOLDING
COMPANY; ARTICLES OF INCORPORATION AND REGULATIONS OF
THE HOLDING COMPANY; SIGNIFICANT DIFFERENCES BETWEEN
THE CORPORATION LAWS OF DELAWARE AND OHIO; EXPERTS
5. Pro Forma Financial Information.............. Not Applicable
6. Material Contracts with the Company Being
Acquired..................................... Not Applicable.
7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
Be Underwriters.............................. Not Applicable
8. Interests of Named Experts and Counsel....... LEGAL OPINION; EXPERTS
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................. Not Applicable
10. Information with Respect to S-3
Registrants.................................. Not Applicable
11. Incorporation of Certain Information by
Reference.................................... Not Applicable
12. Information with Respect to S-2 or S-3
Registrants.................................. Not Applicable
13. Incorporation of Certain Information by
Reference.................................... Not Applicable
14. Information with Respect to Registrants Other
Than S-2 or S-3 Registrants.................. Not Applicable
15. Information with Respect to S-3 Companies.... Not Applicable
16. Information with Respect to S-2 or S-3
Companies.................................... Notice of Annual Meeting of Stockholders; INFORMATION
INCORPORATED BY REFERENCE; FINANCIAL STATEMENTS
17. Information with Respect to Companies Other
Than S-3 or S-2 Registrants.................. Not Applicable
18. Information if Proxies, Consents or
Authorizations are to be Solicited........... Cover Page of Proxy Statement-Prospectus;
INTRODUCTION; REORGANIZATION PROPOSAL -- Appraisal
Rights; ELECTION OF DIRECTORS; COMPENSATION OF
EXECUTIVE OFFICERS; OWNERSHIP OF OGLEBAY NORTON COMMON
STOCK; RELATED PARTY TRANSACTIONS; INDEPENDENT
AUDITORS
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in
an Exchange Offer............................ Not Applicable
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OGLEBAY NORTON COMPANY
1100 Superior Avenue
Cleveland, Ohio 44114-2598
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 1998
The Annual Meeting of Stockholders of Oglebay Norton Company ("Oglebay
Norton") will be held in the Diamond Building Conference Center located on the
12th floor at 1100 Superior Avenue, Cleveland, Ohio, on Wednesday, April 29,
1998, at 9:00 a.m., Cleveland, Ohio time. The purposes of the Annual Meeting are
as follows.
1. To vote upon a proposal to approve an Agreement and Plan of Merger,
a copy of which is attached as Exhibit A to the Proxy Statement-Prospectus,
pursuant to which Oglebay Norton will become a second-tier wholly-owned
subsidiary of a new Ohio holding company called Oglebay Norton Holding
Company (the "Holding Company") and the shares of Common Stock of Oglebay
Norton will be converted, on a share-for-share basis, into Common Shares of
the Holding Company. At the time of the merger, the name of the Holding
Company will be changed to "Oglebay Norton Company" and the name of Oglebay
Norton will be changed to "ONCO Transportation Company." The Agreement and
Plan of Merger provides that, following the merger, the internal affairs of
the Holding Company will be governed by Articles of Incorporation and
Regulations attached as Exhibits B and C to the Proxy Statement-Prospectus.
The Articles of Incorporation and Regulations are substantially identical
to the Restated Certificate of Incorporation and By-laws of Oglebay Norton,
except for amendments necessary to conform the Articles of Incorporation
and Regulations to Ohio law and an amendment to the Articles of
Incorporation increasing the authorized number of Common Shares of the
Holding Company from 10,000,000 to 30,000,000. All of these matters are
more fully discussed in the Proxy Statement-Prospectus.
2. To vote upon a proposal to approve the Oglebay Norton Company
Director Fee Deferral Plan, a copy of which is attached as Exhibit D to
this Proxy Statement-Prospectus.
3. To vote upon a proposal to approve the Performance Option Agreement
with Mr. John N. Lauer, a copy of which is attached as Exhibit E to this
Proxy Statement-Prospectus.
4. To elect three directors to the class whose term expires in 2001.
5. To hear reports and transact any other business that may properly
come before the Annual Meeting.
The Board of Directors has fixed the close of business on March 10, 1998,
as the record date for determining the stockholders entitled to notice of the
Annual Meeting and to vote at the Annual Meeting or any postponement or
adjournment thereof.
The Proxy Statement-Prospectus accompanies this Notice. The Annual Report
to Stockholders for the year ended December 31, 1997 is being mailed to
stockholders with the Proxy Statement-Prospectus, although only portions of the
Annual Report to Stockholders are incorporated by reference in the Proxy
Statement-Prospectus, as more fully described therein.
YOUR VOTE IS IMPORTANT
Please sign, date and return your Proxy card in the enclosed envelope.
By Order of the
Board of Directors
DAVID G. SLEZAK,
Secretary and Director
of Legal Affairs
March , 1998
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PRELIMINARY PROSPECTUS DATED MARCH 3, 1998
OGLEBAY NORTON COMPANY
1100 Superior Avenue
Cleveland, Ohio 44114-2598
(216) 861-3300
OGLEBAY NORTON HOLDING COMPANY
1100 Superior Avenue
Cleveland, Ohio 44114-2598
(216) 861-3300
PROXY STATEMENT-PROSPECTUS
ANNUAL MEETING OF STOCKHOLDERS
April 29, 1998
This Proxy Statement-Prospectus is being furnished in connection with the
solicitation of proxies by the Board of Directors of Oglebay Norton Company, a
Delaware corporation ("Oglebay Norton"), for use at the Annual Meeting of
Stockholders to be held on April 29, 1998 (the "Annual Meeting"), and at any
adjournment or postponement of the Annual Meeting. At the Annual Meeting,
stockholders will: (i) consider and vote upon a proposal to adopt an Agreement
and Plan of Merger providing for the reorganization of Oglebay Norton through
the formation of an Ohio holding company; (ii) consider and vote upon a proposal
to approve the Oglebay Norton Company Director Fee Deferral Plan; (iii) consider
and vote upon a proposal to approve the Performance Option Agreement with Mr.
John N. Lauer; (iv) elect three directors of the class whose terms in office
will expire in 2001; and (v) hear reports and transact any other business that
may properly come before the Annual Meeting. This Proxy Statement-Prospectus
also relates to the offering of 7,303,332 Common Shares, par value $1.00 per
share, of Oglebay Norton Holding Company, an Ohio corporation (the "Holding
Company"), to be issued to the stockholders of Oglebay Norton in connection with
the proposed reorganization.
The proposed reorganization will be implemented by the merger (the
"Merger") of a third-tier wholly-owned subsidiary of Oglebay Norton into Oglebay
Norton, which will be the surviving corporation. By virtue of the Merger,
Oglebay Norton will become a second-tier wholly-owned subsidiary of the Holding
Company and all of the outstanding shares of Common Stock of Oglebay Norton will
be converted, on a share-for-basis, into Common Shares of the Holding Company.
This Proxy Statement-Prospectus does not cover any resales of the Common
Shares of the Holding Company received by Oglebay Norton stockholders upon the
implementation of the holding company structure as described herein. No person
is authorized to make any use of this Proxy Statement-Prospectus in connection
with any such resale or in connection with the offer of any other securities.
It is anticipated that the mailing of this Proxy Statement-Prospectus and
accompanying form of Proxy to stockholders will begin on or about March ,
1998.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Proxy Statement-Prospectus is March , 1998.
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AVAILABLE INFORMATION
Oglebay Norton is subject to the information, reporting and proxy statement
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
Holding Company has filed a Registration Statement on Form S-4 (the
"Registration Statement") with the Commission under the Securities Act of 1933,
as amended, with respect to the Common Shares of the Holding Company. As
permitted by the rules and regulations of the Commission, this Proxy
Statement-Prospectus omits certain information contained in the Registration
Statement. The reports, proxy statements and other information filed with the
Commission by Oglebay Norton, as well as the Registration Statement and exhibits
to the Registration Statement, can be inspected, and copied at prescribed rates,
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004, and
should also be available for inspection and copying at the following regional
offices of the Commission: Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. In addition,
the Commission maintains a public access site on the Internet at which site
reports, proxy and information statements and other information regarding
registrants, including all electronic filings, may be viewed. The address of the
Internet site is http://www.sec.gov.
In connection with the reorganization described herein, the Holding Company
will become subject to the same information, reporting and proxy statement
requirements under the Exchange Act as currently apply to Oglebay Norton, and
copies of materials will be available for inspection and copying at the offices
and on the Internet site of the Commission set forth above.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by Oglebay Norton are
incorporated by reference in this Proxy Statement-Prospectus:
1. Annual Report on Form 10-K of Oglebay Norton for the year ended
December 31, 1996;
2. Quarterly Reports on Form 10-Q of Oglebay Norton for the periods
ended March 31, 1997, June 30, 1997 and September 30, 1997; and
3. Current Report on Form 8-K of Oglebay Norton filed on January 7,
1997.
All documents subsequently filed by Oglebay Norton or the Holding Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Proxy Statement-Prospectus and prior to the
date of the Annual Meeting or any adjournment or postponement thereof shall be
deemed to be incorporated in this Proxy Statement-Prospectus by reference and to
be part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein, or contained in this Proxy Statement-Prospectus, shall be deemed to be
modified or superseded for purposes of this Proxy Statement-Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement-Prospectus.
The Annual Report of Oglebay Norton for the year ended December 31, 1997
(the "Annual Report") is being mailed to stockholders with this Proxy
Statement-Prospectus. However, none of the information included in the Annual
Report is incorporated by reference in or deemed to be a part of this Proxy
Statement-Prospectus or the Registration Statement, other than the following:
the information regarding the approximate amounts of total consolidated net
sales and operating revenues, total consolidated income from operations, and
total consolidated identifiable assets for the three years ended December 31,
1997, attributable to each of the business segments of Oglebay Norton that
appears on pages of the Annual Report; the information regarding the
market prices of and dividends on the shares of Common Stock of Oglebay Norton
and related stockholder matters that appears on the inside front cover of the
Annual Report; the selected financial data that appears on page of the
ii
<PAGE> 6
Annual Report; management's discussion and analysis of the financial condition
and results of operations of Oglebay Norton that appears on pages of
the Annual Report; and the financial statements and related notes that appear on
pages of the Annual Report.
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE
WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST DIRECTED TO DAVID G. SLEZAK,
SECRETARY AND DIRECTOR OF LEGAL AFFAIRS, OGLEBAY NORTON COMPANY, 1100 SUPERIOR
AVENUE, CLEVELAND, OHIO 44114-2598 (TELEPHONE NUMBER (216) 861-3300). IN ORDER
TO ENSURE TIMELY DELIVERY OF THESE DOCUMENTS, ANY REQUEST SHOULD BE MADE AT
LEAST FIVE BUSINESS DAYS BEFORE THE DATE OF THE ANNUAL MEETING.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL A SECURITY, OR A SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH, OR
TO ANY PERSON TO WHOM, IT WOULD BE UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF
THE SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF OGLEBAY NORTON OR
THE HOLDING COMPANY SINCE THE DATE OF THIS PROXY STATEMENT-PROSPECTUS.
iii
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TABLE OF CONTENTS
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SUMMARY..................................................... 1
INTRODUCTION................................................ 4
Purposes of the Annual Meeting............................ 4
Voting Rights and Proxy Information....................... 4
REORGANIZATION PROPOSAL..................................... 6
Formation of Ohio Holding Company......................... 6
Management of the Holding Company......................... 6
Employee Benefit Plans.................................... 6
Indebtedness of Oglebay Norton............................ 7
Oglebay Norton Restated Rights Agreement.................. 7
No Material Effect on Financial Condition or Results of
Operations............................................. 7
Conditions to the Merger.................................. 7
Effective Time; Amendment; Abandonment.................... 8
Federal Income Tax Consequences........................... 8
Appraisal Rights.......................................... 9
REASONS FOR THE REORGANIZATION.............................. 9
Benefits of the Reorganization............................ 9
Board Recommendation...................................... 10
ARTICLES OF INCORPORATION AND REGULATIONS OF THE HOLDING
COMPANY................................................... 10
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF
DELAWARE AND OHIO......................................... 10
Amendment of Charter Documents............................ 10
Amendment and Repeal of By-laws/Regulations............... 11
Removal of Directors...................................... 11
Vacancies on the Board.................................... 11
Rights to Call Special Meetings of Stockholders........... 11
Stockholder Action Without A Meeting...................... 12
Class Voting.............................................. 12
Cumulative Voting......................................... 12
Business Combinations with Interested Stockholders........ 12
Control Share Acquisition................................. 14
Control Bid............................................... 14
Mergers, Acquisitions and Certain Other Transactions...... 14
Consideration of Constituencies........................... 15
Rights of Dissenting Stockholders......................... 15
Dividends................................................. 16
Preemptive Rights of Stockholders......................... 16
Director Liability and Indemnification.................... 16
CAPITAL STOCK OF THE HOLDING COMPANY........................ 17
Number of Authorized Shares............................... 17
Terms of the Common Shares of the Holding Company......... 18
Terms of the Preferred Shares of the Holding Company...... 18
OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN........... 19
Board Recommendation...................................... 20
PERFORMANCE OPTION AGREEMENT WITH MR. JOHN N. LAUER......... 20
Board Recommendation...................................... 21
ELECTION OF DIRECTORS....................................... 21
Nominees for Terms Expiring in 2001....................... 21
Present Directors Whose Terms Expire in 2000.............. 21
Present Directors Whose Terms Expire in 1999.............. 22
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Board and Committee Attendance............................ 22
Structure/Committees of the Board......................... 22
Compensation of Directors................................. 23
Director Agreements....................................... 23
BENEFICIAL OWNERSHIP OF OGLEBAY NORTON COMMON STOCK......... 24
PERFORMANCE GRAPH........................................... 26
COMPENSATION OF EXECUTIVE OFFICERS.......................... 26
Report of the Compensation Committee on Executive
Compensation........................................... 26
Summary Compensation Table................................ 29
Stock Option Grants in 1997............................... 30
Option Grants in Last Fiscal Year......................... 30
Long-Term Incentive Plans -- Awards In Last Fiscal Year... 31
RETIREMENT PLANS............................................ 32
Salaried Employees Pension Plan; Excess and TRA
Supplemental Benefit Retirement Plan................... 32
Supplemental Savings and Stock Ownership Plan............. 33
OFFICER AGREEMENTS.......................................... 33
Separation Agreement with Mr. R. Thomas Green, Jr......... 33
Employment Agreement with Mr. John N. Lauer............... 33
New Plan Benefits -- Performance Options.................. 36
Officer Agreements Effective Upon "Change in Control"..... 37
"Pour-Over" and Irrevocable Trusts........................ 37
Long-Term Incentive Plan.................................. 38
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION............................................. 39
RELATED PARTY TRANSACTIONS.................................. 39
LEGAL OPINION............................................... 39
EXPERTS..................................................... 39
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 39
INDEPENDENT AUDITORS........................................ 39
FINANCIAL STATEMENTS........................................ 40
1999 ANNUAL MEETING......................................... 40
OTHER MATTERS............................................... 40
EXHIBITS
Agreement and Plan of Merger.............................. A
Articles of Incorporation of Oglebay Norton Holding
Company................................................ B
Regulations of Oglebay Norton Holding Company............. C
Oglebay Norton Company Director Fee Deferral Plan......... D
Performance Option Agreement with Mr. John N. Lauer....... E
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SUMMARY
The following is a summary of certain information contained in this Proxy
Statement-Prospectus. Certain capitalized terms used in this summary are defined
elsewhere in this Proxy Statement-Prospectus. This summary is qualified in its
entirety by reference to the more detailed information contained in this Proxy
Statement-Prospectus, the Exhibits hereto, and the documents incorporated by
reference.
DATE, TIME AND PLACE OF ANNUAL MEETING; RECORD DATE; REQUIRED VOTE
The Annual Meeting will be held on Wednesday, April 29, at 9:00 a.m.,
Cleveland, Ohio time, in the Diamond Building Conference Center located on the
12th floor at 1100 Superior Avenue, Cleveland, Ohio 44114-2598.
The Board of Directors has fixed the close of business on March 10, 1998 as
the Record Date for determining stockholders entitled to notice of the Annual
Meeting and to vote. On the Record Date, [4,766,258] shares of Common Stock of
Oglebay Norton were outstanding. The affirmative vote of the holders of
two-thirds of the shares of Common Stock of Oglebay Norton outstanding on the
Record Date is necessary to approve the Agreement and Plan of Merger. All other
matters that may properly come before the Annual Meeting, including the approval
of the Oglebay Norton Company Director Fee Deferral Plan and the Performance
Option Agreement with Mr. John N. Lauer and the election of directors, require
the affirmative vote of a majority of shares of Common Stock of Oglebay Norton
present in person or represented by proxy at the meeting and entitled to vote on
such subject matter, assuming such majority also constitutes at least a majority
of the required quorum. See "INTRODUCTION -- Voting Rights and Proxy
Information."
PURPOSES OF THE ANNUAL MEETING; PROPOSED REORGANIZATION
The purposes of the Annual Meeting are to: (i) consider and vote upon a
proposal to adopt an Agreement and Plan of Merger providing for the
reorganization of Oglebay Norton through the formation of an Ohio holding
company; (ii) consider and vote upon a proposal to approve the Oglebay Norton
Company Director Fee Deferral Plan; (iii) consider and vote upon a proposal to
approve the Performance Option Agreement with Mr. John N. Lauer; (iv) elect
three directors of the class whose terms in office will expire in 2001; and (v)
hear reports and transact any other business that may properly come before the
Annual Meeting. See "INTRODUCTION -- Purposes of the Annual Meeting."
Pursuant to the Agreement and Plan of Merger, Oglebay Norton will become a
second-tier wholly-owned subsidiary of the Holding Company, a new Ohio
corporation organized for the purpose of implementing the reorganization, and
all of the outstanding shares of Common Stock of Oglebay Norton will be
converted, on a share-for-share basis, into Common Shares of the Holding
Company. THE CONVERSION OF SHARES WILL OCCUR WITHOUT AN EXCHANGE OF
CERTIFICATES, AND THE STOCKHOLDERS OF OGLEBAY NORTON WILL NOT NEED TO SURRENDER
CERTIFICATES FOR THEIR SHARES OF COMMON STOCK OF OGLEBAY NORTON IN ORDER TO
BECOME STOCKHOLDERS OF THE HOLDING COMPANY. At the effective time of the Merger,
the name of the Holding Company will be changed to "Oglebay Norton Company" and
the name of Oglebay Norton will be changed to "ONCO Transportation Company." See
"REORGANIZATION PROPOSAL -- Formation of Ohio Holding Company."
The reorganization will have no material effect on the financial condition
or results of operations of Oglebay Norton. See "REORGANIZATION PROPOSAL -- No
Material Effect on Financial Condition or Results of Operations."
REASONS FOR THE REORGANIZATION; BOARD RECOMMENDATION
The principal reasons for the reorganization are to permit the operation
and administration of certain operations of Oglebay Norton as separate
subsidiaries of a common holding company, to provide a framework that can
readily accommodate future acquisitions and diversification, to broaden the
alternatives available for future financing, and generally to provide greater
administrative and operational flexibility. Oglebay Norton will, however,
experience other potential benefits as a result of the reorganization. See
"REASONS FOR THE REORGANIZATION -- Benefits of the Reorganization."
1
<PAGE> 10
On February 26, 1998, the Board of Directors of Oglebay Norton unanimously
approved the Agreement and Plan of Merger and the proposed reorganization and
recommended that the stockholders of Oglebay Norton vote to adopt the Agreement
and Plan of Merger at the Annual Meeting. See "REASONS FOR THE
REORGANIZATION -- Board Recommendation."
CONDITIONS TO THE MERGER; EFFECTIVE TIME; ABANDONMENT
The completion of the Merger is conditioned upon (i) the adoption of the
Agreement and Plan of Merger by the stockholders of Oglebay Norton and (ii) the
receipt of the consent of the United States Secretary of Transportation, which
is required by the terms of contracts relating to the financing of vessels under
Title XI of the Merchant Marine Act of 1936. There can be no assurance that both
of these conditions will be satisfied. It is anticipated that the Merger will
become effective promptly after the adoption of the Agreement and Plan of Merger
by the stockholders of Oglebay Norton and satisfaction of the other condition to
the Merger. See "REORGANIZATION PROPOSAL -- Effective Time; Amendment;
Abandonment."
The Merger will be abandoned if the Agreement and Plan of Merger is not
adopted by the stockholders of Oglebay Norton. In addition, the Board of
Directors of Oglebay Norton may abandon the Merger at any time, whether or not
the stockholders of Oglebay Norton have adopted the Agreement and Plan of Merger
or the other conditions have been satisfied, although the Board has no present
intention to do so. See "REORGANIZATION PROPOSAL -- Effective Time; Amendment;
Abandonment."
FEDERAL INCOME TAX CONSEQUENCES TO STOCKHOLDERS
The Merger is intended to qualify as a tax-free reorganization under the
Internal Revenue Code. Assuming such tax treatment, no gain or loss will be
recognized by the stockholders of Oglebay Norton upon the conversion of their
shares of Common Stock of Oglebay Norton into Common Shares of the Holding
Company, and the basis of the Common Shares of the Holding Company received by
such stockholders of Oglebay Norton will be the same as the basis of the shares
of Common Stock of Oglebay Norton held by such stockholders immediately prior to
the Merger. Stockholders should consult their own tax advisors regarding the
federal, state, local and foreign tax consequences of the Merger. See
"REORGANIZATION PROPOSAL -- Federal Income Tax Consequences."
APPRAISAL RIGHTS
Dissenters' rights of appraisal will not be available to the stockholders
of Oglebay Norton with respect to the Merger or the reorganization. See
"REORGANIZATION PROPOSAL -- Appraisal Rights."
ARTICLES OF INCORPORATION AND REGULATIONS OF THE HOLDING COMPANY
The Articles of Incorporation and Regulations of the Holding Company, which
are attached to this Proxy Statement-Prospectus as Exhibits B and C, are
substantially identical to the Restated Certificate of Incorporation and By-laws
of Oglebay Norton, except for amendments necessary to conform the Articles of
Incorporation and Regulations to Ohio law, an amendment to the Articles of
Incorporation increasing the authorized number of Common Shares of the Holding
Company from 10,000,000 to 30,000,000 and certain other minor conforming or
stylistic changes. See "ARTICLES OF INCORPORATION AND REGULATIONS OF THE HOLDING
COMPANY."
CAPITAL STOCK OF THE HOLDING COMPANY
The authorized capital stock of the Holding Company consists of 30,000,000
Common Shares, $1.00 par value per share, and 5,000,000 Preferred Shares,
without par value, which differs from the capitalization of Oglebay Norton only
in the addition of 20,000,000 Common Shares. Immediately following the Merger,
approximately 4,816,258 Common Shares of the Holding Company will be outstanding
and 2,487,074 shares will be held in treasury. No Preferred Shares of the
Holding Company will be outstanding immediately after the Merger. See "CAPITAL
STOCK OF THE HOLDING COMPANY -- Number of Authorized Shares."
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The terms of the Common Shares of the Holding Company are the same as the
terms of the shares of Common Stock of Oglebay Norton, except to the extent
these terms are affected by the changes in the Articles of Incorporation and
Regulations of the Holding Company and changes due to the applicability of Ohio
law. The Common Shares of the Holding Company, like the shares of Common Stock
of Oglebay Norton, will be traded on the NASDAQ National Market. See "CAPITAL
STOCK OF THE HOLDING COMPANY -- Terms of the Common Shares of the Holding
Company." The terms of the Preferred Shares of the Holding Company will be
determined by the Holding Company's Board of Directors at the time of issuance.
See "CAPITAL STOCK OF THE HOLDING COMPANY -- Terms of the Preferred Shares of
the Holding Company."
APPROVAL OF OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN
On January 28, 1998, the Compensation Subcommittee of Oglebay Norton's
Board of Directors (the "Compensation Subcommittee") and the Board of Directors
adopted and recommended that the stockholders approve the Oglebay Norton Company
Director Fee Deferral Plan (the "Director Plan") pursuant to which non-employee
directors can elect to defer some or all of the fees earned by them for services
as a director of Oglebay Norton and can choose to have amounts deferred
denominated in Share Units or Deferred Cash (as defined in the Director Plan).
The Director Plan is intended to attract and retain qualified individuals to
serve as directors of Oglebay Norton. The Compensation Subcommittee and the
Board of Directors have determined that the Director Plan will provide
non-employee directors with a stronger identity of interests with Oglebay Norton
and its stockholders and will therefore be in the best interests of Oglebay
Norton and all of its stockholders. The Director Plan does not amend or
otherwise affect the Oglebay Norton Company Director Stock Plan pursuant to
which each non-employee director is awarded 200 shares of Common Stock of
Oglebay Norton at the time of each annual meeting of stockholders. See "PROPOSAL
TO APPROVE THE OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN." The complete
text of the Director Plan is attached as Exhibit D to this Proxy
Statement-Prospectus.
APPROVAL OF PERFORMANCE OPTION AGREEMENT WITH MR. JOHN N. LAUER
On December 17, 1997, the Compensation Subcommittee and the Board of
Directors granted to Mr. John N. Lauer, the newly appointed President and Chief
Executive Officer of Oglebay Norton, a Performance Option to acquire up to
380,174 shares of Common Stock of Oglebay Norton, at an exercise price of $38.00
per share, which is $6.00 above the per share closing price as reported on the
NASDAQ National Market on December 16, 1997 (the last closing price available at
the time the option was granted). The options were granted pursuant to a
Performance Option Agreement with Mr. Lauer, a copy of which agreement is
attached to this Proxy Statement-Prospectus as Exhibit E, and are subject to
stockholder approval. See "PERFORMANCE OPTION AGREEMENT WITH MR. JOHN N. LAUER"
and "OFFICER AGREEMENTS -- Employment Agreement with Mr. John N. Lauer."
ELECTION OF DIRECTORS
The nominees for election as directors are Malvin E. Bank, William G. Bares
and John D. Weil. Information about each of these nominees is set forth under
the heading "ELECTION OF DIRECTORS -- Nominees for Terms Expiring in 2001." All
of these nominees are presently members of the Board of Directors and were
elected by the stockholders. It is anticipated that, upon completion of the
Merger, the persons elected as directors of Oglebay Norton will also serve as
directors of the Holding Company. See "REORGANIZATION PROPOSAL -- Management of
the Holding Company."
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INTRODUCTION
This Proxy Statement-Prospectus is being furnished to the stockholders of
Oglebay Norton in connection with the solicitation of proxies by the Board of
Directors of Oglebay Norton for use at the Annual Meeting. This Proxy
Statement-Prospectus, the enclosed Notice of Annual Meeting of Stockholders, and
the enclosed form of Proxy were first mailed to the stockholders of Oglebay
Norton on or about March , 1998.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the stockholders of Oglebay Norton will be asked to:
(i) consider and vote upon a proposal to adopt the Agreement and Plan of Merger
providing for the reorganization of Oglebay Norton through the formation of an
Ohio holding company; (ii) consider and vote upon a proposal to approve the
Oglebay Norton Company Director Fee Deferral Plan; (iii) consider and vote upon
a proposal to approve the Performance Option Agreement with Mr. John N. Lauer;
(iv) elect three directors of the class whose terms in office will expire in
2001; and (v) hear reports and transact any other business that may properly
come before the Annual Meeting.
Pursuant to the Agreement and Plan of Merger, Oglebay Norton will become a
second-tier wholly-owned subsidiary of the Holding Company and all of the
outstanding shares of Common Stock of Oglebay Norton will be converted, on a
share-for-share basis, into Common Shares of the Holding Company. The conversion
of shares of Common Stock of Oglebay Norton in the Merger will occur without an
exchange of certificates. Following the Merger, certificates formerly
representing shares of Common Stock of Oglebay Norton will be deemed to
represent Common Shares of the Holding Company. STOCKHOLDERS OF OGLEBAY NORTON
WILL NOT NEED TO EXCHANGE THEIR CERTIFICATES IN ORDER TO BECOME STOCKHOLDERS OF
THE HOLDING COMPANY. A copy of the Agreement and Plan of Merger is attached as
Exhibit A to this Proxy Statement-Prospectus.
A description of the proposal to approve the Oglebay Norton Company
Director Fee Deferral Plan is set forth below under the heading "PROPOSAL
II -- OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN," and a copy of the plan
is attached as Exhibit D to this Proxy Statement-Prospectus. Likewise, a
description of the proposal to approve the Performance Option Agreement with Mr.
John N. Lauer appears below under the heading "PROPOSAL III -- PERFORMANCE
OPTION AGREEMENT WITH MR. JOHN N. LAUER," and a copy of the agreement is
attached as Exhibit E to this Proxy Statement-Prospectus.
The nominees for election as directors, with information about each of
them, is set forth below under the heading "ELECTION OF DIRECTORS -- Nominees
for Terms Expiring in 2001."
VOTING RIGHTS AND PROXY INFORMATION
Record Date; Required Vote. The Board of Directors of Oglebay Norton has
fixed the close of business on March 10, 1998 as the record date (the "Record
Date") for determining the stockholders entitled to notice of the Annual Meeting
and to vote at the Annual Meeting or any postponement or adjournment thereof. On
the Record Date, [4,766,258] shares of Common Stock of Oglebay Norton were
outstanding, each of which is entitled to one vote.
Approval of the Agreement and Plan of Merger requires the affirmative vote
of the holders of two-thirds of the shares of Common Stock of Oglebay Norton
outstanding on the Record Date. All other matters that may properly come before
the Annual Meeting, including the approval of the Oglebay Norton Company
Director Fee Deferral Plan, the approval of the Performance Option Agreement
with Mr. John N. Lauer and the election of directors, require the affirmative
vote of a majority of the outstanding shares of Common Stock of Oglebay Norton
present in person or represented by proxy at the meeting and entitled to vote on
such subject matter, assuming such majority also constitutes at least a majority
of the required quorum. The percentage of outstanding shares of Common Stock of
Oglebay Norton held by its directors and executive officers and entitled to vote
at the Annual Meeting is set forth below under the heading "BENEFICIAL OWNERSHIP
OF OGLEBAY NORTON COMMON STOCK." Abstentions and broker non-votes are tabulated
in determining votes present at the meeting. An abstention or broker non-vote
has the same effect as a vote against a proposal or a director nominee, as each
abstention or broker non-vote is one less vote in favor of a proposal or for a
director nominee.
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In the election of directors, each stockholder has the right to cumulate
the stockholder's votes and to give one nominee a number of votes equal to the
number of directors to be elected multiplied by the number of votes which the
stockholder's shares are entitled, or the stockholder may distribute the
stockholder's votes on the same principle among two or more nominees. Cumulative
voting will be in effect if any stockholder gives notice in writing to the
President or the Secretary of Oglebay Norton at least 48 hours in advance of the
time set for the Annual Meeting and an announcement is made at the beginning of
the Annual Meeting by the President, Secretary or the stockholder giving the
notice. Oglebay Norton has not been advised of any stockholder who intends to
cumulate his votes.
Proxies. All shares of Common Stock of Oglebay Norton represented at the
Annual Meeting by properly executed Proxies will be voted in accordance with the
instructions on the Proxies. If no instructions are given, Proxies will be voted
FOR adoption of the Agreement and Plan of Merger, FOR the approval of the
Oglebay Norton Company Director Fee Deferral Plan, FOR the approval of the
Performance Option Agreement with Mr. John N. Lauer, and FOR the election as
directors of the nominees listed under the heading "ELECTION OF
DIRECTORS -- Nominees for Terms Expiring in 2001." If cumulative voting is in
effect, shares represented by each properly signed Proxy card will also be voted
on a cumulative basis, with the votes distributed among the nominees in
accordance with the judgment of the persons named in the Proxy card. However,
the persons named in the Proxy card will not vote any shares cumulatively for
nominees for whom authority to vote was withheld. Oglebay Norton has no
knowledge of any other matters to be presented at the Annual Meeting but, in the
event that other matters do properly come before the Annual Meeting, the persons
named in the Proxies will also vote on these matters in accordance with their
best judgment.
A stockholder giving a Proxy pursuant to this solicitation may revoke the
Proxy at any time before it is voted. A Proxy may be revoked by filing with the
Secretary of Oglebay Norton, at the address set forth above, a written notice of
revocation bearing a later date than the Proxy, by duly executing a subsequent
Proxy relating to the same shares and delivering it to the Secretary or by
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute the revocation of a Proxy).
Oglebay Norton will bear the cost of preparing and mailing the proxy
material to the stockholders of Oglebay Norton in connection with the Annual
Meeting. The cost of soliciting Proxies, in addition to a fee of $7,500 payable
to Georgeson & Co., will be borne by Oglebay Norton.
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PROPOSAL I
REORGANIZATION PROPOSAL
FORMATION OF OHIO HOLDING COMPANY
Oglebay Norton Holding Company (the "Holding Company") is a wholly-owned
subsidiary of Oglebay Norton recently organized under the laws of the state of
Ohio. The Holding Company has a newly-formed Ohio subsidiary, ONCO Investment
Company (the "Investment Company"), which in turn has a newly-formed Delaware
subsidiary, Oglebay Norton Merger Company (the "Merger Company"). The Merger
Company has been organized solely for the purpose of effecting the merger (the
"Merger") contemplated by the Reorganization Proposal. As a result of the
Merger, the Merger Company will be merged into Oglebay Norton, the Merger
Company will cease to exist and Oglebay Norton will be the surviving entity and
a second-tier wholly-owned subsidiary of the Holding Company. Upon consummation
of the Merger, stockholders of Oglebay Norton will become stockholders of the
Holding Company and will receive one Common Share of the Holding Company in
exchange for each share of Common Stock of Oglebay Norton now held by the
stockholder. A copy of the Agreement and Plan of Merger is attached as Exhibit A
to this Proxy Statement-Prospectus and is hereby incorporated by reference.
At the time of the Merger, the name of the Holding Company will be changed
to "Oglebay Norton Company," and the name of Oglebay Norton will be changed to
"ONCO Transportation Company."
The Holding Company, the Investment Company and the Merger Company are
newly formed corporations organized by Oglebay Norton for the purpose of
carrying out the Merger. Prior to the completion of the Merger, none of the
Holding Company, the Investment Company or the Merger Company is expected to
have any significant assets or liabilities or to engage in any significant
activities, other than those arising under the Agreement and Plan of Merger or
associated with the reorganization.
The conversion of shares of Common Stock of Oglebay Norton in the Merger
will occur without an exchange of certificates. Following the Merger,
certificates formerly representing shares of Common Stock of Oglebay Norton will
be deemed to represent Common Shares of the Holding Company. THEREFORE, THE
STOCKHOLDERS OF OGLEBAY NORTON WILL NOT NEED TO EXCHANGE THEIR CERTIFICATES IN
ORDER TO BECOME STOCKHOLDERS OF THE HOLDING COMPANY AND ARE REQUESTED NOT TO
SURRENDER THEIR CERTIFICATES AT THIS TIME. If such an exchange becomes advisable
in the future, stockholders will be notified at that time and instructed as to
proper procedures for exchanging their certificates.
MANAGEMENT OF THE HOLDING COMPANY
If the Agreement and Plan of Merger is approved by the stockholders, the
directors elected at the Annual Meeting will serve as directors of the Holding
Company. Oglebay Norton will cause R. Thomas Green, Jr., Ralph D. Ketchum and
John N. Lauer to be elected as Class I directors of the Holding Company whose
terms in office would continue until the Annual Meeting of Stockholders of the
Holding Company to be held in 1999, Brent D. Baird, James T. Bartlett, Albert C.
Bersticker and William G. Pryor to be elected as Class II directors, whose terms
in office would continue until the Annual Meeting of Stockholders of the Holding
Company to be held in 2000, and Malvin E. Bank, William G. Bares and John D.
Weil to be elected as Class III directors, whose terms in office would continue
until the Annual Meeting of Stockholder of the Holding Company to be held in
2001. It is anticipated that, upon completion of the Merger, the executive
officers of Oglebay Norton would be elected to substantially the same positions
with the Holding Company.
EMPLOYEE BENEFIT PLANS
The pension plans and other employee benefit plans of Oglebay Norton will
not be changed in the reorganization, except to permit participation by
employees of the Holding Company. All of the options to purchase shares of
Common Stock of Oglebay Norton granted to executive officers of Oglebay Norton
and rights of directors to acquire shares of Common Stock under the Oglebay
Norton Company Director Stock Plan (the "Director Stock Plan") that are
outstanding when the Merger becomes effective will be converted into options to
purchase (or, as to the Director Stock Plan, rights to acquire) the same number
of Common Shares of the Holding
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Company at the same price and on the same terms and conditions as were in effect
prior to the Merger, and the Holding Company will assume the obligation to sell
or grant shares under these options and the Director Stock Plan. In addition,
after the Merger becomes effective, stock equivalent units outstanding under the
Oglebay Norton Long-Term Incentive Plan (and, if approved by the stockholders,
the Director Fee Deferral Plan) will relate to Common Shares of the Holding
Company rather than to shares of Common Stock of Oglebay Norton and dividend
equivalents under the Oglebay Norton Long-Term Incentive Plan (and, if approved
by the stockholders, the Director Fee Deferral Plan) will relate to cash
dividends paid on the Common Shares of the Holding Company. See "COMPENSATION OF
EXECUTIVE OFFICERS."
INDEBTEDNESS OF OGLEBAY NORTON
All indebtedness of Oglebay Norton outstanding before the reorganization
will remain the indebtedness of Oglebay Norton and will not, except as described
below, be guaranteed or assumed by the Holding Company. It is possible that the
United States Secretary of Transportation, as a condition to consenting to the
Merger, will require the Holding Company to guarantee or assume the payment of
indebtedness owed by Oglebay Norton under contracts relating to the construction
and chartering of vessels financed under Title XI of the Merchant Marine Act of
1939 (the "Title XI Contracts") and will insist that the financial tests and
restrictive covenants under the Title XI contracts relating to the financing of
the Columbia Star continue to be applied on a consolidated basis. See
"REORGANIZATION PROPOSAL -- Conditions to the Merger."
Oglebay Norton is also a party to a credit agreement with certain banks
providing a term loan in the amount of $50,000,000 and a line of credit in the
amount of $40,000,000 to Oglebay Norton. Under the terms of the credit
agreement, the consent of the banks is required for the reorganization. Oglebay
Norton will, prior to the completion of the reorganization, enter into
discussions with the banks, which discussions may lead to the consent of the
banks to the reorganization, the modification of the terms of the credit
agreement or the substitution of the Holding Company as the borrower under the
credit agreement. If the discussions with the banks are unsuccessful, Oglebay
Norton intends to cancel the credit agreement. Oglebay Norton believes that
other sources of credit are readily available and that the cancellation of the
credit agreement would not have a material adverse effect upon Oglebay Norton or
the Holding Company.
OGLEBAY NORTON RESTATED RIGHTS AGREEMENT
Oglebay Norton is party to a Restated Rights Agreement, dated as of
February 22, 1989, with National City Bank as Rights Agent. Under the Restated
Rights Agreement, rights have been issued with respect to each outstanding share
of Common Stock of Oglebay Norton. In the event that any person or group
acquires 15% or more of the outstanding shares of Common Stock of Oglebay
Norton, each right "flips in" and entitles the holder to purchase an additional
share of Common Stock for $2.50. As a result of the Merger, the Holding Company
will assume the Restated Rights Agreement, and thereafter the rights issued
under the Restated Rights Agreement will relate to Common Shares of the Holding
Company, rather than shares of Common Stock of Oglebay Norton.
NO MATERIAL EFFECT ON FINANCIAL CONDITION OR RESULTS OF OPERATIONS
The consolidated financial position and proforma results of operations of
the Holding Company as of the effective time of the Merger will be substantially
identical to the consolidated financial position and results of operations of
Oglebay Norton prior to the Merger. Accordingly, no proforma statements of the
Holding Company showing the effect of the Merger or the subsequent transfers are
included in this Proxy Statement-Prospectus.
CONDITIONS TO THE MERGER
Oglebay Norton's obligation to complete the Merger is conditioned upon (i)
the adoption of the Agreement and Plan of Merger by the stockholders of Oglebay
Norton and (ii) the receipt by Oglebay Norton of the consent of the United
States Secretary of Transportation. See "REORGANIZATION PROPOSAL -- Indebtedness
of Oglebay Norton."
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The consent of the United States Secretary of Transportation is required
under the Title XI contracts. One of the Title XI contracts, relating to the
financing of the vessel Columbia Star, imposes restrictive covenants on Oglebay
Norton. Additional restrictive covenants are imposed if certain financial tests
are not met. These financial tests relate to the consolidated net worth,
long-term debt, and working capital of Oglebay Norton and its subsidiaries.
Oglebay Norton presently meets these financial tests and, therefore, the
additional restrictive covenants are not in effect at this time. It is possible
that the Secretary of Transportation, as a condition to consenting to the
Merger, will require the Holding Company to guarantee or assume the payment of
indebtedness owed by Oglebay Norton under the Title XI contracts and will insist
that the financial tests and restrictive covenants, including the additional
restrictive covenants, under the Title X1 contracts relating to the financing of
the Columbia Star continue to be applied on a consolidated basis. Oglebay Norton
will request the consent of the Secretary of Transportation to the
reorganization prior to the date of the Annual Meeting.
There can be no assurance that both of the conditions to Oglebay Norton's
obligation to complete the Merger will be satisfied. Oglebay Norton cannot
implement the proposed reorganization without completing the Merger, which is
necessary to form the holding company structure.
No material governmental approvals, other than the consent of the United
States Secretary of Transportation, are needed to complete the reorganization.
EFFECTIVE TIME; AMENDMENT; ABANDONMENT
The Merger will become effective upon the filing with the Delaware
Secretary of State of either a certified copy of the Agreement and Plan of
Merger or a separate certificate of merger. It is anticipated that this filing
will be made as soon as practicable following the satisfaction of the conditions
to Oglebay Norton's obligation to complete the Merger. Oglebay Norton has the
right to defer this filing and the completion of the Merger for any period of
time that it deems to be appropriate, although it presently intends to complete
the Merger as soon as practicable. See "REORGANIZATION PROPOSAL -- Conditions to
the Merger."
The Agreement and Plan of Merger may be amended at any time before the
Merger becomes effective by a written instrument approved by the Board of
Directors of Oglebay Norton and executed by all of the parties to the Agreement
and Plan of Merger. However, after the adoption of the Agreement and Plan of
Merger by the stockholders of Oglebay Norton, no such amendment may, in the
judgment of the Board of Directors of Oglebay Norton, materially and adversely
affect the rights of the stockholders of Oglebay Norton, unless the Agreement
and Plan of Merger, as amended, is resubmitted to and adopted by the
stockholders of Oglebay Norton.
The Agreement and Plan of Merger will terminate and the Merger will be
abandoned if the holders of two-thirds of the outstanding shares of Common Stock
of Oglebay Norton do not vote to adopt the Agreement and Plan of Merger at the
Annual Meeting. In addition, the Board of Directors of Oglebay Norton has the
right to terminate the Agreement and Plan of Merger and abandon the Merger,
whether or not the stockholders of Oglebay Norton have adopted the Agreement and
Plan of Merger or the other conditions have been satisfied, although the Board
has no present intention to do so.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Deloitte & Touche LLP, the following discussion
accurately summarizes the material United States federal income tax consequences
of the Merger to the stockholders of Oglebay Norton, Oglebay Norton, the Holding
Company, the Investment Company and the Merger Company. This opinion is based on
the current provisions of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), applicable Treasury Regulations, judicial authority
and administrative rulings and practice. No ruling from the Internal Revenue
Service (the "IRS") has been or will be sought with respect to any aspect of the
Merger. Therefore, there can be no assurance that the IRS will not take a
contrary view as to the tax consequences described herein. Furthermore,
legislative, judicial or administrative changes or interpretations may be
forthcoming that could alter or modify the statements and conclusions set forth
herein.
The following does not consider the tax consequences of the Merger under
state, local and foreign law. Moreover, special considerations not described
herein may apply to certain taxpayers, such as financial
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institutions, broker-dealers, insurance companies, tax-exempt organizations,
investment companies and persons who are neither citizens nor residents of the
United States, or who are foreign corporations, foreign partnerships or foreign
estates or trusts as to the United States. In issuing its opinion, Deloitte &
Touche LLP has relied upon certain representations made by Oglebay Norton. EACH
STOCKHOLDER IS URGED TO CONSULT THE STOCKHOLDER'S OWN TAX ADVISOR REGARDING THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE MERGER.
Subject to the qualifications set forth above, the Merger should qualify as
a tax-free reorganization under the Internal Revenue Code, with the following
results:
(i) No gain or loss shall be recognized by the stockholders of
Oglebay Norton upon the conversion of their shares of Common Stock of
Oglebay Norton into Common Shares of the Holding Company;
(ii) The basis of the Common Shares of the Holding Company received
by each stockholder of Oglebay Norton shall be the same as the basis of the
shares of Common Stock of Oglebay Norton held by such stockholder
immediately prior to the Merger;
(iii) The holding period of the Common Shares of the Holding Company
received by each stockholder of Oglebay Norton shall include the holding
period of the shares of Common Stock of Oglebay Norton held by such
stockholder immediately prior to the Merger, provided that such stockholder
held such shares of Common Stock of Oglebay Norton as a capital asset on
the date of the Merger; and
(iv) No gain or loss shall be recognized by Oglebay Norton, the
Holding Company, the Investment Company or the Merger Company in connection
with the Merger.
APPRAISAL RIGHTS
Appraisal rights are not available in a merger under Delaware law where the
shares of the subject corporation, and the shares received by the stockholders
in the merger, are listed on a national securities exchange or designated as a
national market system security on an interdealer quotations system by the
National Association of Securities Dealers, Inc. Since the shares of Common
Stock of Oglebay Norton are, and the Common Shares of the Holding Company after
consummation of the Merger will be, listed as part of the NASDAQ National
Market, appraisal rights will not be available to the stockholders of Oglebay
Norton in connection with the Merger. See "SIGNIFICANT DIFFERENCES BETWEEN THE
CORPORATION LAWS OF DELAWARE AND OHIO -- Rights of Dissenting Stockholders."
REASONS FOR THE REORGANIZATION
BENEFITS OF THE REORGANIZATION
The reorganization will permit the operation and administration of certain
operations of Oglebay Norton as separate subsidiaries of a common holding
company. This structure will, to some extent, enable Oglebay Norton to insulate
certain of its assets and operations from some of the risks incident to other
operations. The holding company structure will also readily accommodate
acquisitions and further diversification. Whenever attractive opportunities
arise to enter into new lines of business or to expand existing lines of
business, either through the acquisition of other companies or internal growth,
the Holding Company will have the option of operating the new or expanded lines
of business as separate subsidiaries of the Holding Company or as part of
existing subsidiaries. The holding company structure should enhance the
prospects for successfully concluding acquisitions when opportunities arise.
The reorganization will also broaden the alternatives available for future
financing. Financing could be arranged by one or more of the separate
subsidiaries of the Holding Company, based on their separate cash flows and
credit worthiness, or by the Holding Company. Financing by the Holding Company
could take the form of either debt or equity, utilizing the authorized but
unissued Common Shares or Preferred Shares of the Holding Company. See "CAPITAL
STOCK OF THE HOLDING COMPANY." These authorized shares could, for example, be
issued to finance acquisitions, to raise capital for internal expansion or to
generate additional working capital.
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The holding company structure will also generally provide greater
administrative and operational flexibility, in that management authority and
responsibility can be precisely delineated by the appointment of the directors
and officers of the separate subsidiaries of the Holding Company and the
designation of their official functions.
Finally, the reorganization would significantly reduce the annual franchise
tax liability of Oglebay Norton. By reducing the number of authorized shares of
Common Stock from 10,000,000 to 1 in its Certificate of Incorporation, Oglebay
Norton will reduce its franchise tax liability to the state of Delaware, which
tax is based upon the authorized capital stock of a corporation.
ARTICLES OF INCORPORATION AND REGULATIONS
OF THE HOLDING COMPANY
The Agreement and Plan of Merger provides that, upon completion of the
Merger, the internal affairs of the Holding Company will be governed by the
Articles of Incorporation and Regulations of the Holding Company, copies of
which are attached as Exhibits B and C to this Proxy Statement-Prospectus. The
Articles of Incorporation and the Regulations of the Holding Company are
substantially identical to the Restated Certificate of Incorporation and By-laws
of Oglebay Norton, except for (i) an amendment to the Articles of Incorporation
increasing the authorized number of Common Shares of the Holding Company from
10,000,000 to 30,000,000, (ii) amendments discussed in the immediately following
section which are necessary to conform the Articles of Incorporation and
Regulations to Ohio law, and (iii) certain other minor conforming or stylistic
changes.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION
LAWS OF DELAWARE AND OHIO
As a result of the Merger, stockholders of Oglebay Norton will receive
Common Shares of the Holding Company, an Ohio corporation, in exchange for their
shares of Common Stock of Oglebay Norton, a Delaware corporation. The following
is a summary of certain significant differences between the rights of
stockholders under Delaware law and Ohio law. The differences arise in large
part from the differences between the Delaware General Corporation Law and the
Ohio General Corporation Law (hereinafter referred to as the "DGCL" and "OGCL,"
respectively). Although it is impractical to compare all of the aspects in which
Delaware law and Ohio law differ with respect to the rights of stockholders, the
following discussion summarizes significant differences between the laws of the
two states.
AMENDMENT OF CHARTER DOCUMENTS
Delaware law requires approval by holders of a majority of the outstanding
stock of a corporation, and a majority of the outstanding stock of each class
entitled to vote thereon, in order to amend a Delaware corporation's certificate
of incorporation. To amend an Ohio corporation's articles of incorporation, Ohio
law generally requires the approval of stockholders holding two-thirds of the
voting power of the corporation, unless otherwise specified in the corporation's
articles of incorporation. The Articles of Incorporation of the Holding Company
provide that, except for certain actions specified in the Articles, any action
that Ohio law would otherwise require the affirmative vote of the two-thirds of
the voting power of the Holding Company may be taken with the affirmative vote
of a majority of such voting power. The Articles of Incorporation of the Holding
Company may therefore be amended by a majority vote of the Holding Company's
stockholders, notwithstanding the differences between Delaware law and Ohio law.
AMENDMENT AND REPEAL OF BY-LAWS/REGULATIONS
Under Delaware law, the holders of a majority of the voting power of a
corporation and, when provided in the certificate of incorporation, the
directors of the corporation have the power to adopt, amend and repeal the by-
laws of a corporation. Oglebay Norton's Restated Certificate of Incorporation
and By-laws provide that the Board of Directors of Oglebay Norton has the power
to amend the By-laws. Ohio law provides that only the stockholders of a
corporation have the power to amend and repeal a corporation's regulations, by a
vote of a majority of the voting power of the corporation. Accordingly, the
Regulations of the Holding Company differ
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from the By-laws of Oglebay Norton as they provide that the Regulations may be
amended or repealed only by the stockholders of the Holding Company.
REMOVAL OF DIRECTORS
Delaware law provides that directors may be removed from office, with or
without cause, by the holders of a majority of the voting power of all
outstanding voting stock, except that (i) if the corporation has a classified
board and its certificate of incorporation does not otherwise provide, directors
may be removed only for cause, or (ii) in the case of a corporation that has
cumulative voting, no director may be removed without cause if the votes cast
against the director's removal would be sufficient to elect the director at an
election of the corporation. Oglebay Norton has a classified board and its
Restated Certificate of Incorporation does not provide that directors may be
removed without cause. Accordingly, under Delaware law and the Restated
Certificate of Incorporation, stockholders can remove directors, but only for
cause. Ohio law provides that, unless the governing documents of a corporation
provide that directors may not be removed, directors may be removed, with or
without cause, by the affirmative vote of the holders of a majority of the
voting power of the corporation with respect to the election of directors;
except that, unless all the directors or all the directors of a particular class
are removed, no individual director may be removed if the votes of a sufficient
number of shares are cast against such director's removal which, if voted at an
election of the directors of the corporation, would be sufficient to elect the
director. Consistent with Ohio law, the Regulations of the Holding Company
provide that no director may be removed by the stockholders.
VACANCIES ON THE BOARD
Delaware Law provides that, unless the governing documents of a corporation
provide otherwise, vacancies and newly created directorships resulting from a
resignation or any increase in the authorized number of directors elected by all
of the stockholders having the right to vote as a single class may be filled by
a majority of the directors then in office. Neither the Restated Certificate of
Incorporation nor the By-laws of Oglebay Norton alters this provision of
Delaware law. Ohio law provides that, unless the governing documents of a
corporation provide otherwise, any vacancy in the board of directors may be
filled by a majority of the remaining directors of a corporation. Neither the
Articles of Incorporation nor the Regulations of the Holding Company alters this
provision of Ohio law.
RIGHTS TO CALL SPECIAL MEETINGS OF STOCKHOLDERS
Delaware Law permits special meetings of stockholders to be called by the
board of directors and such other persons, including stockholders, as the
certificate of incorporation or by-laws may provide. Delaware law does not
require that stockholders be given the right to call special meetings. The
By-laws of Oglebay Norton extends the right to call a special meeting of
stockholders to the Chairman of the Board, the President and a majority of the
Board of Directors of Oglebay Norton, but not the stockholders. Under Ohio law,
the holders of at least 25% of the outstanding shares of a corporation, unless
the corporation's articles or regulations specify another percentage, which may
not be greater than 50%, the directors, by action at a meeting or a majority of
the directors acting without a meeting, the Chairman of the Board, the President
or, in case of the President's absence, death or disability, the Vice President
authorized to exercise the authority of the President have the authority to call
special meetings of stockholders. The Regulations of the Holding Company provide
that a special meeting may be called by, in addition to the Chairman of the
Board, the President and a majority of the Board of Directors, the holders of at
least 50% of all outstanding shares of the Holding Company entitled to vote at
the meeting.
STOCKHOLDER ACTION WITHOUT A MEETING
Delaware law provides that, unless otherwise provided in a corporation's
certificate of incorporation, any action that may be taken at an annual or
special meeting of stockholders may be taken without a meeting, without prior
notice and without a vote, if the holders of common stock having not less than
the minimum number of votes otherwise required to approve such action at a
meeting of stockholders consent in writing. The Restated Certificate of
Incorporation of Oglebay Norton provides that any action required or permitted
to be taken by the stockholders of the corporation may be taken only at an
annual or special meeting of such stockholders, unless
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consent in writing is given by all the stockholders of the corporation. Under
Ohio law, unless otherwise provided in the articles of incorporation or
regulations of the corporation, any action that may be taken by stockholders at
a meeting may be taken without a meeting with the unanimous written consent of
all stockholders entitled to vote at the meeting. The Articles of Incorporation
and Regulations of the Holding Company do not alter this provision of Ohio law.
Therefore, as under the Restated Certificate of Incorporation of Oglebay Norton,
the stockholders of the Holding Company may only take actions without a meeting
of stockholders upon the unanimous consent of all stockholders of the Holding
Company.
CLASS VOTING
Delaware law generally requires voting by separate classes only with
respect to amendments to a corporation's certificate of incorporation that
adversely affect the holders of those classes or that increase or decrease the
aggregate number of authorized shares or the par value of the shares of any of
those classes. Under Ohio law, holders of a particular class of shares generally
are entitled to vote as a separate class if the rights of that class are
affected in certain respects by mergers, consolidations or amendments to the
articles of incorporation.
CUMULATIVE VOTING
Under Delaware Law, stockholders do not have the right to cumulate their
votes in the election of directors unless that right is granted in the
corporation's certificate of incorporation. The Restated Certificate of
Incorporation of Oglebay Norton grants stockholders the right to cumulate their
votes in the election of directors. Under Ohio Law, unless the articles of
incorporation eliminate cumulative voting for directors, each stockholder has
the right to vote cumulatively in the election of directors if certain notice
requirements are satisfied. The Articles of Incorporation of the Holding Company
do not eliminate cumulative voting in the election of directors. Accordingly, if
the notice requirements of Ohio law are satisfied, the stockholders of the
Holding Company will have the right to vote cumulatively in the election of
directors, even though the Articles of Incorporation of the Holding Company do
not specifically grant to stockholders the right to vote cumulatively.
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
Delaware law, in Section 203 of the DGCL, provides generally that any
person who acquires 15% or more of a corporation's voting stock (thereby
becoming an "interested stockholder") may not engage in a wide range of business
combinations with the corporation for a period of three years following the date
the person became an interested stockholder, unless (i) the board of directors
of the corporation has approved, prior to the date on which such stockholder
became an interested stockholder, either the business combination or the
transaction that resulted in the person becoming an interested stockholder, (ii)
upon consummation of the transaction that resulted in the person becoming an
interested stockholder, that person owns at least 85% of the corporation's
voting stock outstanding at the time the transaction commenced (excluding shares
owned by persons who are directors and also officers and shares owned by
employee stock plans in which participants do not have the right to determine
confidentially whether shares will be tendered in a tender or exchange offer),
or (iii) the business combination is approved by the board of directors and
authorized by the affirmative vote (at an annual or special meeting and not by
written consent) of at least 66 2/3% of the outstanding voting stock of the
corporation not owned by the interested stockholder.
These restrictions on business combinations with interested stockholders do
not apply under certain circumstances, including, but not limited to, where (i)
the corporation's original certificate of incorporation contains a provision
expressly electing not to be governed by Section 203 of the DGCL, or (ii) the
corporation, by action of its stockholders, adopts an amendment to its by-laws
or certificate of incorporation expressly electing not to be governed by such
section. Neither the original certificate of incorporation of Oglebay Norton nor
any amendment thereto expressly elects Oglebay Norton not to be governed by
Section 203 of the DGCL.
Ohio law, in Chapter 1704 of the OGCL, prohibits an "issuing public
corporation" (as defined below) from engaging in a "Chapter 1704 transaction"
(as defined below) with an "interested shareholder" (generally, a shareholder
who, directly or indirectly, exercises or directs the exercise of 10% or more of
the voting power of
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the corporation) for a period of three years following the date on which the
person becomes an interested shareholder unless, prior to such date, the
directors of the issuing public corporation approve either the Chapter 1704
transaction or the acquisition of shares pursuant to which such person became an
interested shareholder.
After the initial three-year moratorium has expired, an issuing public
corporation may engage in a Chapter 1704 transaction with an interested
shareholder if (i) the acquisition of shares pursuant to which the person became
an interested shareholder received the prior approval of the board of directors
of the issuing public corporation, (ii) the Chapter 1704 transaction is approved
by the affirmative vote of the holders of shares representing at least
two-thirds of the voting power of the issuing public corporation and by the
holders of at least a majority of voting shares which are not beneficially owned
by the interested shareholder or an affiliate or associate of an interested
shareholder, or (iii) the Chapter 1704 transaction meets certain statutory tests
designed to ensure that the transaction is economically fair to all
shareholders.
For purposes of Chapter 1704 of the OGCL, an "issuing public corporation"
is any Ohio corporation with fifty or more shareholders that has its principal
place of business, its principal executive offices or substantial assets within
the state of Ohio. Upon consummation of the Merger, the Holding Company will be
an issuing public corporation for this purpose. A "Chapter 1704 transaction"
includes any merger, consolidation, combination or majority share acquisition
(as defined below) between or involving an issuing public corporation or any
subsidiary of an issuing public corporation and an interested shareholder or an
affiliate or associate of an interested shareholder. A Chapter 1704 transaction
also includes certain transfers of property, dividends and issuance or transfers
of shares from or by an issuing public corporation or a subsidiary of an issuing
public corporation to, with or for the benefit of an interested shareholder or
an affiliate or associate of an interested shareholder unless such transaction
is in the ordinary course of business of the issuing public corporation on terms
no more favorable to the interested shareholder than those acceptable to third
parties as demonstrated by contemporaneous transactions. Finally, Chapter 1704
transactions include certain transactions which (i) increase the proportionate
share ownership of an interested shareholder, (ii) result in the adoption of a
plan or proposal for the dissolution, winding up of the affairs or liquidation
of the issuing public corporation if such plan is proposed by or on behalf of
the interested shareholder, or (iii) pledge or extend the credit or financial
resources of the issuing public corporation to or for the benefit of the
interested shareholder.
The Restated Certificate of Incorporation of Oglebay Norton contains
provisions relating to business combinations with interested stockholders and
these same provisions appear substantially unaltered in the Articles of
Incorporation of the Holding Company. The provisions state that the affirmative
vote of 75% of the voting power of the corporation shall be required to approve
a "business combination" (as defined below) between the corporation and an
"interested stockholder" (defined generally as any person or entity that owns,
together with any affiliates of the person or entity, shares having at least 25%
of the voting power of the corporation) unless both (a) certain requirements
which are intended to ensure that the stockholders of the corporation receive
fair consideration for their shares in the business combination are satisfied
and (b) certain other requirements which are intended to ensure that the
interested stockholder does not take unfair advantage of the corporation between
the time such person becomes an interested stockholder and the time that the
business combination is consummated are satisfied. For purposes of these
provisions, the term "business combination" includes (i) the merger or
consolidation of the corporation or any of its subsidiaries with or into the
interested stockholder, (ii) the sale, lease, pledge or other disposition by the
corporation or any of its subsidiaries to or from the interested stockholder of
assets having an aggregate value equal to or exceeding 20% of the fair market
value of the corporation, (iii) the issuance, sale or other transfer by the
corporation or any of its subsidiaries to or from the interested stockholder of
securities having an aggregate value equal to or exceeding 20% of the fair
market value of the corporation, (iv) the liquidation or dissolution of the
corporation proposed by the interested stockholder, (v) the reclassification of
securities, recapitalization of the corporation or other transaction that has
the effect of increasing the proportionate share of any security owned by the
interested stockholder, and (vi) any other transaction or series of transactions
that is similar in purpose to those transactions referred to in clauses (i)
through (vi) above.
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CONTROL SHARE ACQUISITION
Ohio law, in Section 1701.831 of the OGCL, requires that, unless the
articles of incorporation or regulations of a corporation otherwise provide, any
"control share acquisition" of an "issuing public corporation" (as defined
above) can only be made with the prior approval of the corporation's
stockholders, by the affirmative vote of a majority of the voting power of the
corporation and a majority of the portion of such voting power excluding the
voting power of interested shares (those held by the acquiring person, by
certain officers and directors and by persons who acquire a block of shares
after the first public disclosure of a proposed control share acquisition or
certain other transactions). A "control share acquisition" is defined as any
acquisition of shares of a corporation that, when added to all other shares of
that corporation owned by the acquiring person, would enable that person to
exercise levels of voting power in any of the following ranges: at least
one-fifth or more but less than one-third; one-third or more but less than a
majority; or a majority or more. There is no similar provision under Delaware
law. Neither the Articles of Incorporation nor the Regulations of the Holding
Company provide that Section 1701.831 does not apply to the Holding Company.
CONTROL BID
Under Ohio law, any offeror making a "control bid" for the securities of a
"subject company" (generally, a corporation with a certain threshold value of
assets located in Ohio and a certain threshold number of stockholders residing
in Ohio) pursuant to a tender offer must file upon commencement of the bid
certain information specified in the Ohio Securities Act with the Ohio Division
of Securities, who may then within five calendar days suspend the bid if the
required information has not been supplied to it, if material information
regarding the bid has not been provided to the offerees or if there has been any
other violation of the Ohio Securities Act. There is no similar provision under
Delaware law.
MERGERS, ACQUISITIONS AND CERTAIN OTHER TRANSACTIONS
Delaware law requires approval of mergers, consolidations and dispositions
of all or substantially all of a corporation's assets (other than certain
"parent-subsidiary" mergers) by a majority of the voting power of the
corporation, unless the certificate of incorporation specifies a different
percentage. The Restated Certificate of Incorporation of Oglebay Norton provides
that the affirmative vote of two-thirds of the voting power of the corporation
shall be required to approve (i) the merger of the corporation into or its
consolidation with another corporation, (ii) the merger into the corporation of
another corporation, if a stockholder vote is required under Delaware law, (iii)
the sale, lease, exchange or other disposition by the corporation of all or
substantially all of its property and assets to another corporation, or (iv) any
agreement or arrangement providing for any of the transactions described in
clauses (i) through (iii) above. Delaware law does not require stockholder
approval for majority share acquisitions or for combinations involving the
issuance of less than 20% of the voting power of the corporation, except for
"business combinations" subject to Section 203 of the DGCL, as described above.
Under Ohio law, a merger, consolidation or disposition of all or
substantially all of the assets of an Ohio corporation generally requires the
affirmative vote of holders of shares representing at least two-thirds of the
voting power of the corporation, unless the corporation's articles of
incorporation provide for approval by a different proportion not less than a
majority. The Articles of Incorporation of the Holding Company includes
substantially the identical provision contained in the Restated Certificate of
Incorporation of Oglebay Norton (as described in the immediately preceding
paragraph) relating to the approval of mergers, consolidations or disposition of
all or substantially all of the assets of the corporation and therefore does not
alter the two-thirds vote required for the approval of such transactions.
However, the Articles of Incorporation provide that, except as expressly
required by the provision referred to above or other provisions of the Articles
of Incorporation, actions that would otherwise require a two-thirds vote can be
approved by the affirmative vote of the holders of a majority of the voting
power of the Holding Company.
Ohio law, in Section 1701.83 of the OGCL, also requires a "combination" or
"majority share acquisition" to be authorized by the stockholders of an Ohio
acquiring corporation, by the vote of holders of two-thirds of the voting power
of the corporation if (a) the transaction involves the issuance or transfer by
the acquiring corporation of such number of its shares as entitle the holders to
exercise one-sixth or more of the voting power
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of such corporation in the election of directors immediately after the
consummation of such transaction or (b) the articles of incorporation require
the transaction to be authorized by the corporation's stockholders. For purposes
of Section 1701.83 of the OGCL, "combination" includes transactions, other than
mergers or consolidations, where voting shares of an Ohio corporation are issued
or transferred in consideration for the transfer to the corporation or its
subsidiary of all or substantially all of the assets of one or more domestic or
foreign corporations. "Majority share acquisition" means generally the
acquisition of shares of a corporation entitling the holder of the shares to
exercise a majority of the voting power in the election of directors of such
corporation. The Articles of Incorporation of the Holding Company includes no
provision setting forth authorization requirements for any combination or
majority share acquisition in addition to those prescribed by Section 1701.83 of
the OGCL, although the Articles of Incorporation change the vote required to
approve a combination or majority share acquisition from two-thirds to a
majority of the outstanding voting power of the Holding Company.
CONSIDERATION OF CONSTITUENCIES
Section 1701.59 of the OGCL permits a director, in determining what such
director reasonably believes to be in the best interests of the corporation, to
consider, in addition to the interests of the corporation's stockholders, any of
the following: (i) the interests of the corporation's employees, suppliers,
creditors and customers, (ii) the economy of the state and nation, (iii)
community and societal considerations, and (iv) the long-term as well as the
short-term interests of the corporation and its stockholders, including the
possibility that these interests may be best served by the continued
independence of the corporation. Delaware law contains no comparable provision.
RIGHTS OF DISSENTING STOCKHOLDERS
Under Delaware law, appraisal rights are available to dissenting
stockholders in connection with certain mergers or consolidations. However,
unless the certificate of incorporation otherwise provides, Delaware law does
not provide for appraisal rights if (i) the shares of the corporation are listed
on a national securities exchange or designated as a national market system
security on an interdealer quotations system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 stockholders (as
long as the stockholders receive in the merger only shares of the surviving
corporation or of any other corporation the shares of which are listed on a
national securities exchange or designated as a national market systems security
on an interdealer quotations system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 stockholders, with cash
permitted in lieu of fractional shares) or (ii) the corporation is the surviving
corporation and no vote of its stockholders is required for the merger. See
"REORGANIZATION PROPOSAL -- Appraisal Rights." Delaware law does not provide
appraisal rights to stockholders who dissent from the sale of all or
substantially all of a corporation's assets or an amendment to the corporation's
certificate of incorporation, although a corporation's certificate of
incorporation may so provide. The Restated Certificate of Incorporation of
Oglebay Norton creates no rights of appraisal in addition to those set forth in
the DGCL.
Under Ohio law, dissenting stockholders are entitled to appraisal rights in
connection with the lease, sale, exchange, transfer or other disposition of all
or substantially all of the assets of a corporation and in connection with
certain amendments to the corporation's articles of incorporation. Stockholders
of an Ohio corporation being merged into or consolidated with another
corporation are also entitled to appraisal rights, whether or not the shares are
listed on a national securities exchange or designated as a national market
systems security on an interdealer quotations system by the National Association
of Securities Dealers, Inc. or held of record by more than 2,000 stockholders.
In addition, stockholders of an acquiring corporation are entitled to appraisal
rights in any merger, "combination" or "majority share acquisition" (as defined
above) in which such stockholders are entitled to vote.
Under Delaware law, among other procedural requirements, a stockholder's
written demand for appraisal of shares must, in most circumstances, be received
before the taking of the vote on the matter giving rise to the right of
appraisal. Under Ohio law, a stockholder's written demand must be delivered to
the corporation not later than ten days after the taking of the vote on the
matter giving rise to appraisal rights.
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DIVIDENDS
Delaware law provides that dividends may be paid in cash, property or
shares of a corporation's capital stock. Delaware law provides that a
corporation may pay dividends out of any surplus and, if it has no surplus, out
of any net profits for the fiscal year in which the dividend was declared or for
the preceding fiscal year (provided that such payment will not reduce capital
below the amount of capital represented by all classes of shares having a
preference upon the distribution of assets). Ohio law provides that a
corporation may pay dividends in the form of cash, property or shares of the
corporation and that such dividends may be paid out of surplus. Ohio law
requires a corporation to notify its stockholders if a dividend is paid out of
capital surplus.
PREEMPTIVE RIGHTS OF STOCKHOLDERS
Delaware law provides that no stockholder shall have any preemptive rights
to purchase additional securities of the corporation unless the certificate of
incorporation expressly grants such rights. The Restated Certificate of
Incorporation of Oglebay Norton specifically provides that no stockholder of the
corporation shall have any preemptive right to subscribe for any additional
shares of the corporation. Ohio law provides that, subject to certain
limitations and conditions contained in the OGCL and unless the articles of
incorporation provide otherwise, stockholders shall have preemptive rights to
purchase additional securities of the corporation. The Articles of Incorporation
of the Holding Company provides that no stockholder of the corporation shall
have any preemptive right to subscribe for any additional shares of the
corporation.
DIRECTOR LIABILITY AND INDEMNIFICATION
Delaware law allows a Delaware corporation to include in its certificate of
incorporation a provision eliminating or limiting the personal liability of a
director to the corporation or the corporation's stockholders for monetary
damages for a breach of such director's fiduciary duties as a director, except
liability (i) for any breach of the director's duty of loyalty to the
corporation and the corporation's stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of the DGCL (which deals generally with unlawful
payments of dividends, stock repurchases and redemptions), and (iv) for any
transaction from which the director derived an improper personal benefit. The
Restated Certificate of Incorporation includes a provision that eliminates the
personal liability of directors to the extent permitted by Delaware law.
Delaware law permits a Delaware corporation to indemnify directors,
officers, employees and agents under certain circumstances and mandates
indemnification under certain circumstances. Delaware law permits a corporation
to indemnify an officer, director, employee or agent for fines, judgments or
settlements, as well as for expenses in the context of actions other than
derivative actions if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification against expenses incurred by a director, officer,
employee or agent in connection with a proceeding against such person for
actions in such capacity is mandatory to the extent that such person has been
successful on the merits. If a director, officer, employee or agent is
determined to be liable to the corporation, indemnification for expenses is not
allowable, subject to limited exceptions when a court deems the award of
expenses appropriate. The Restated Certificate of Incorporation of Oglebay
Norton provides that the directors of the corporation will be indemnified to the
fullest extent permitted by Delaware law. Advancement of expenses is permitted,
but a person receiving such advances must repay those expenses if it is
ultimately determined that such person is not entitled to indemnification.
Delaware law grants express power to a Delaware corporation to purchase
liability insurance for its directors, officers, employees and agents,
regardless of whether any such person is otherwise eligible for indemnification
by the corporation. The Restated Certificate of Incorporation of Oglebay Norton
includes provisions relating to the payment and advancement of fees and expenses
to directors and the purchase of liability insurance consistent with the
foregoing.
There is no comparable provision under Ohio law permitting corporations to
eliminate the liability of officers, employees or agents of the corporation.
However, Ohio law provides that a director will be liable for damages only if it
is proved by clear and convincing evidence that an action or failure to act was
undertaken with deliberate intent to cause injury to the corporation or with
reckless disregard for the best interests of the
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corporation. Further, Ohio law provides specific statutory authority for
directors to consider, in addition to the interests of the corporation's
stockholders, other factors such as the interests of the corporation's
employees, suppliers, creditors and customers; the economy of the state and
nation; community and societal considerations; the long-term and short-term
interests of the corporation and its stockholders; and the possibility that
these interests may be best served by the continued independence of the
corporation.
Under Ohio law, Ohio corporations are permitted to indemnify directors,
officers, employees and agents within prescribed limits and must indemnify them
under certain circumstances. Ohio law does not authorize payment by a
corporation of judgments against a director, officer, employee or agent in a
derivative suit after a finding of negligence or misconduct absent a court
order. Indemnification is required, however, to the extent such person succeeds
on the merits. In all other cases, if it is determined that a director, officer,
employee or agent acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation,
indemnification is discretionary, except as otherwise provided by a
corporation's articles of incorporation, code of regulations or by contract,
except with respect to the advancement of expenses of directors (as discussed in
the next paragraph). The statutory right to indemnification is not exclusive in
Ohio, and Ohio corporations may, among other things, purchase insurance to
indemnify such persons.
Ohio law provides that a director (but not an officer, employee, or agent)
is entitled to mandatory advancement of expenses, including attorneys' fees,
incurred in defending any action, including derivative actions, brought against
the director, provided that the director agrees to cooperate with the
corporation concerning the matter and to repay the amount advanced if it is
proved by clear and convincing evidence that such director's act or failure to
act was done with deliberate intent to cause injury to the corporation or with
reckless disregard for the corporation's best interests.
The Articles of Incorporation of the Holding Company provides that the
corporation shall indemnify, to the fullest extent permitted by Ohio law, any
director or officer of the corporation who is made a party or is threatened to
be made party to certain proceedings by reason of the fact that he or she is a
director or officer of the corporation. The Articles also provide that the
Holding Company shall pay, to the fullest extent permitted by Ohio law, expenses
and attorneys' fees incurred by a director in defending any such proceeding as
such expenses are incurred, in advance of the disposition thereof, upon receipt
from the director of any undertaking required by Ohio law. The Articles provide
further that the Holding Company may, in its discretion, indemnify any other
person, or advance expenses to any other person, in the same manner as described
above to the fullest extent permitted by Ohio law. Finally, the Articles provide
that Holding Company may purchase liability insurance on behalf of any director
or officer against any liability asserted against the director or officer,
whether or not the Holding Company would have the power to indemnify the
director or officer under Ohio law. The foregoing provisions of the Articles of
Incorporation of the Holding Company are substantially the same as those
relating to indemnification of officers and directors in the Restated
Certificate of Incorporation of Oglebay Norton, except for certain conforming or
stylistic changes.
CAPITAL STOCK OF THE HOLDING COMPANY
NUMBER OF AUTHORIZED SHARES
The authorized capital stock of Oglebay Norton consists of 10,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. The authorized
capital stock of the Holding Company consists of 30,000,000 Common Shares and
5,000,000 Preferred Shares. Consistent with Ohio law, the common stock of the
Holding Company is referred to as the "Common Shares" and the preferred stock of
the Holding Company is referred to as the "Preferred Shares." Immediately
following the Merger, approximately 4,816,258 Common Shares of the Holding
Company will be outstanding and 2,487,074 Common Shares of the Holding Company
will be held in treasury. No Preferred Shares of the Holding Company will be
outstanding immediately after the Merger. There are no present plans for use of
the 20,000,000 additional Common Shares authorized in the Articles of
Incorporation of the Holding Company, although such Common Shares would be
available for the uses described below.
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The Holding Company will reserve authorized but unissued Common
Shares for issuance upon exercise of options granted or to be granted to
employees. If the option granted to Mr. Lauer is approved at the Annual Meeting,
the Holding Company will also reserve authorized but unissued Common
Shares for issuance upon exercise of that option. Three hundred thousand shares
of Series C Preferred Shares of the Holding Company will be reserved for future
issuance under the Holding Company's stockholder rights plan. Possible uses of
the remaining authorized but unissued Common Shares and Preferred Shares include
acquisitions and equity financings (see "REASONS FOR THE
REORGANIZATION -- Benefits of the Reorganization"), as well as employee stock
plans, stock dividends or stock splits and recapitalizations or reorganizations.
It is possible that the shares could be issued for the purpose of deterring an
unsolicited tender offer or other transaction that might result in a change in
control of the Holding Company. The Holding Company is not aware of any
threatened transaction of this type, and any such use of the shares would depend
on an evaluation by the Holding Company's Board of Directors of the relevant
circumstances at the time of issuance.
TERMS OF THE COMMON SHARES OF THE HOLDING COMPANY
The terms of the Common Shares of the Holding Company are the same as the
terms of the shares of Common Stock of Oglebay Norton, except to the extent
these terms are affected by the changes in the Articles of Incorporation of the
Holding Company described above and changes due to the applicability of Ohio
law. See "ARTICLES OF INCORPORATION AND REGULATIONS OF THE HOLDING COMPANY" and
"SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF DELAWARE AND OHIO." The
Common Shares of the Holding Company, like the shares of Common Stock of Oglebay
Norton, will be traded on the NASDAQ National Market.
Holders of Common Shares of the Holding Company will be entitled (a) to
receive dividends, when and as declared by the Board of Directors of the Holding
Company, after any dividends that may be due on the Preferred Shares of the
Holding Company, if issued, have been paid or set apart, (b) to one vote per
share on all matters properly submitted to stockholders for their vote, (c) to
vote cumulatively in the election of directors, and (d) to participate ratably
in the net assets of the Holding Company in the event of liquidation, after any
liquidation preferences of the Preferred Shares of the Holding Company, if
issued, have been satisfied. No holder of Common Shares of the Holding Company,
as such, has the preemptive right to purchase stock or other securities of the
Holding Company of any class. The outstanding Common Shares of the Holding
Company are, and the Common Shares of the Holding Company offered hereby will
be, fully paid and nonassessable. The Restated Rights Agreement of Oglebay
Norton that will be assumed by the Holding Company if the Merger is consummated
(see "REORGANIZATION PROPOSAL -- Oglebay Norton Restated Rights Agreement") and
certain provisions of the Articles of Incorporation of the Holding Company,
which are substantially identical to provisions contained in the Restated
Certificate of Incorporation of Oglebay Norton (see "SIGNIFICANT DIFFERENCES
BETWEEN THE CORPORATION LAWS OF DELAWARE AND OHIO -- Business Combinations with
Interested Stockholders" and "-- Mergers, Acquisitions and Certain Other
Transactions"), could have the effect of delaying, deferring or preventing a
change in control of the Holding Company.
One of the Title XI contracts imposes restrictive covenants on Oglebay
Norton, including a restriction on the payment of dividends, if certain
financial tests are not met. These financial tests relate to the consolidated
net worth, long-term debt and working capital of Oglebay Norton and its
subsidiaries. Oglebay Norton presently meets these financial tests, and,
therefore, the restrictive covenants are not in effect at this time. It is
possible that the Secretary of Transportation, as a condition to consenting to
the Merger, will insist that these financial tests and restrictive covenants
continue to be applied on a consolidated basis. See "REORGANIZATION
PROPOSAL -- Conditions to the Merger." If so, the restriction on the payment of
dividends would apply to the Common Shares of the Holding Company in the event
that the Holding Company and its subsidiaries should fail to meet the financial
tests.
TERMS OF THE PREFERRED SHARES OF THE HOLDING COMPANY
The Holding Company will be authorized to issue Preferred Shares in one
or more series. The express terms of Series C Preferred Stock are set forth in
the Articles of Incorporation of the Holding Company, and 300,000 shares of
Series C Preferred Shares will be reserved for issuance under the Holding
Company's
18
<PAGE> 27
stockholder rights plan. See "REORGANIZATION PROPOSAL -- Oglebay Norton Restated
Rights Agreement." Under the provisions of the Holding Company's Articles of
Incorporation, the Board of Directors is authorized, without further stockholder
action, to approve the issuance of additional series of Preferred Shares and to
designate the express terms of each series, including the number of shares,
dividend rights, redemption provisions, sinking fund provisions, liquidation
rights, conversion rights and any other rights, preferences or provisions
applicable to that series. The holders of all outstanding Preferred Shares of
the Holding Company will be entitled to vote as a separate class on any proposed
amendment to the Articles of Incorporation of the Holding Company that would (i)
increase or decrease the par value of the issued Preferred Shares, (ii) change
the number of issued Preferred Shares into a lesser number or into the same or
different number of any other class of shares, (iii) change the express terms of
the Preferred Shares in any manner substantially prejudicial to the holders of
Preferred Shares, (iv) change the express terms of issued shares of any class
senior to the Preferred Shares in any manner substantially prejudicial to the
holders of the Preferred Shares, (v) authorize shares of another class that are
convertible into, or authorize the conversion of another class of stock into,
the Preferred Shares, or authorize the directors to fix or alter conversion
rights of shares of another class of stock that are convertible into the
Preferred Shares, or (vi) reduce or eliminate the stated capital of the
corporation in certain specified respects. No holder of Preferred Shares, as
such, has the preemptive right to purchase stock or other securities of the
Holding Company of any class.
BOARD RECOMMENDATION
The Board of Directors of Oglebay Norton determined on February 26, 1998
that the proposed reorganization is in the best interests of Oglebay Norton and
its stockholders on the basis of the factors discussed above and voted
unanimously to approve the Agreement and Plan of Merger and to recommend that
the stockholders of Oglebay Norton vote to adopt the Agreement and Plan of
Merger at the Annual Meeting. ACCORDINGLY, THE BOARD OF DIRECTORS OF OGLEBAY
NORTON RECOMMENDS A VOTE FOR THE ADOPTION OF THE AGREEMENT AND PLAN OF MERGER.
PROPOSAL II
OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN
The Compensation Subcommittee (on January 27, 1998) and the Board of
Directors (on January 28, 1998) adopted and recommended that the stockholders
approve the Oglebay Norton Company Director Fee Deferral Plan (the "Director
Plan") pursuant to which non-employee directors can elect to defer some or all
of the fees earned by them for services as a director of Oglebay Norton and can
choose to have amounts deferred denominated in Share Units or Deferred Cash, as
those terms are defined in the Director Plan. The Director Plan is intended to
attract and retain qualified individuals to serve as directors of Oglebay
Norton. The Compensation Subcommittee and the Board of Directors have determined
that the Director Plan will provide non-employee directors with a stronger
identity of interest with Oglebay Norton and its stockholders and will therefore
be in the best interests of Oglebay Norton and all of its stockholders. The
Director Plan does not amend or otherwise affect the Oglebay Norton Company
Director Stock Plan pursuant to which each non-employee director is awarded 200
shares of Common Stock of Oglebay Norton at the time of each annual meeting of
stockholders. If the Reorganization Proposal is approved by the stockholders of
Oglebay Norton, the Holding Company will assume the Director Plan, and the share
units based on the value of the shares of Common Stock of Oglebay Norton will be
converted into share units based on the value of the Common Shares of the
Holding Company.
The complete text of the Director Plan is attached as Exhibit D to this
Proxy Statement-Prospectus. The following summary of the Director Plan does not
purport to be complete and is qualified in its entirety by reference to Exhibit
D.
Election to Defer. Each non-employee director can elect under the Director
Plan to defer some or all or the cash portion of fees payable to him for service
as a director of Oglebay Norton, including the basic retainer and additional
fees for attending meetings and serving as head of committees. Elections are to
be made on or before the time necessary to defer inclusion of the cash portion
of fees in a director's gross income for federal income
19
<PAGE> 28
tax purposes. Elections for the last eleven months of 1998 were made upon
adoption of the Director Plan by the Compensation Subcommittee. A director may
elect, in 10% increments, (a) to defer the cash portion of fees as Share Units,
(b) to defer the cash portion of fees as Deferred Cash, or (c) to receive fees
as earned without any deferral. In addition, a director who defers at least some
fees as Share Units may elect to either have any dividend equivalents with
respect to the Share Units deferred as additional deferred Share Units or to
have those dividend equivalents paid to him in cash as accrued.
Deferral, Crediting, and Deferral Period. Amounts deferred are credited to
book accounts maintained in the name of each participating non-employee
director, either as Share Units or as Deferred Cash. Amounts deferred as Share
Units are converted into Share Units at the fair market value of the shares of
Common Stock of Oglebay Norton as of the date on which the fees would otherwise
be paid. Amounts deferred in cash are credited with interest at the prime rate,
compounded annually, until distributed. Amounts deferred are deferred through
termination of service by the deferring director and are then paid out in shares
of Common Stock of Oglebay Norton (if deferred in Share Units) or in cash (if
Deferred Cash).
Dividend Equivalent. On each date on which dividends are paid on the
shares of Common Stock of Oglebay Norton, dividend equivalents are credited on
deferred Share Units and are either converted into additional deferred Share
Units based on the fair market value of shares of Common Stock of Oglebay Norton
on the dividend payment date or paid out to the director in cash.
Matching Contribution. Each Share Unit credited to a participating
director's account, whether credited as the result of a direct fee deferral or
as a result of a dividend equivalent being converted into additional deferred
Share Units, is matched at the rate of 25% by Oglebay Norton's contribution of
additional Share Units to the director's account.
Maximum Number of Shares. The maximum number of shares of Common Stock of
Oglebay Norton to be issuable under the Director Plan is 100,000, subject to
adjustment upon the occurrence of certain changes with respect to the shares.
Federal Income Tax Consequences of Deferrals. The following is a brief
general discussion of the anticipated income tax treatment of the deferrals and
distributions to be made pursuant to the Director Plan under current provisions
of the Internal Revenue Code. Fees deferred by a director and credited to his
account will not be recognized as income to the director for income tax purposes
until the deferred fees are distributed to the director either in the form of
cash or shares of Common Stock of Oglebay Norton. Interest credited on Deferred
Cash and compounded and added to a director's account will not be recognized as
income to the director for income tax purposes until the accrued interest is
distributed to the director. Similarly, dividend equivalents converted into
additional deferred Share Units will not be recognized as income until the
additional Deferred Shares are distributed as shares of Common Stock of Oglebay
Norton to the director. Dividend equivalents paid in cash will be recognized as
ordinary income to the director when the cash is paid. At the time of
distribution of shares of Common Stock of Oglebay Norton in satisfaction of
deferred Share Units or cash in satisfaction of Deferred Cash, the recipient
will have ordinary income equal to the fair market value of the shares of Common
Stock of Oglebay Norton or the dollar amount of the cash distributed. Oglebay
Norton will be entitled to a deduction equal in amount to the amount taken into
income by a director during the same year that the amount is taken into income
by the director.
BOARD RECOMMENDATION
The favorable vote of the holders of a majority of the shares of Common
Stock of Oglebay Norton present in person or by Proxy at the meeting is required
to adopt the Director Plan. THE BOARD OF DIRECTORS OF OGLEBAY NORTON RECOMMENDS
A VOTE FOR APPROVAL OF THE OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN.
20
<PAGE> 29
PROPOSAL III
PERFORMANCE OPTION AGREEMENT WITH MR. JOHN N. LAUER
In connection with the employment of Mr. John N. Lauer as President and
Chief Executive Officer of Oglebay Norton effective January 1, 1998, on December
17, 1997, the Compensation Subcommittee and the Board of Directors granted to
Mr. Lauer, subject to the approval of the stockholders of Oglebay Norton, an
option to acquire up to 380,174 shares of Common Stock of Oglebay Norton (the
"Performance Option"). The exercise price of the option is $38.00 per share,
which is $6.00 above the per share closing price as reported on the NASDAQ
National Market on December 16, 1997 (the last closing price available at the
time the option was granted). If approved by the stockholders, the option will
first become exercisable in the normal course of events on January 1, 2001.
Oglebay Norton is seeking stockholder approval of the Performance Option
Agreement to satisfy the requirements of Section 162(m) of the Internal Revenue
Code. The Performance Option is described in more detail as part of the terms of
Mr. Lauer's employment in the section below entitled "OFFICER
AGREEMENTS -- Employment Agreement with Mr. John N. Lauer." A copy of the
Performance Option Agreement with Mr. Lauer, pursuant to which the Performance
Option was granted, is attached to this Proxy Statement-Prospectus as Exhibit E.
BOARD RECOMMENDATION
The favorable vote of the holders of a majority of the shares of Common
Stock of Oglebay Norton present in person or by Proxy at the meeting is required
to approve the Performance Option Agreement. THE BOARD OF DIRECTORS OF OGLEBAY
NORTON RECOMMENDS A VOTE FOR APPROVAL OF THE PERFORMANCE OPTION AGREEMENT WITH
MR. LAUER.
PROPOSAL IV
ELECTION OF DIRECTORS
Oglebay Norton's Board of Directors is composed of ten directors, divided
into two classes of three members and one class of four members. As of the date
of this Proxy Statement-Prospectus, the terms of these classes will expire in
1998, 1999 and 2000, respectively. Each of the directors serves for a term of
three years and until a successor is elected. The directors whose terms expire
in 1998 were nominated by the Board to stand for election to new terms which
expire at the Annual Meeting in 2001. Directors whose terms expire in 1999 and
2000 are also described below. THE BOARD OF DIRECTORS OF OGLEBAY NORTON
RECOMMENDS A VOTE FOR EACH OF MALVIN E. BANK, WILLIAM G. BARES AND JOHN D. WEIL
AS DIRECTORS OF THE CLASS WHOSE TERMS IN OFFICE WILL EXPIRE IN 2001.
NOMINEES FOR TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE
---- --- ----------------------------------------------------------------- --------
<S> <C> <C> <C>
Malvin E. Bank.......... 67 Partner, Thompson Hine & Flory LLP, Cleveland, Ohio, attorneys, 1977
for more than five years. Mr. Bank also serves on the Board of
Directors of Metropolitan Financial Corp.
William G. Bares........ 56 Chairman, President and Chief Executive Officer, since April 1982
1996, President and Chief Executive Officer, from January 1996 to
April 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
serves on the Boards of Directors of The Lubrizol Corporation,
Applied Industrial Technologies, Inc. and KeyCorp.
</TABLE>
21
<PAGE> 30
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE
---- --- ----------------------------------------------------------------- --------
<S> <C> <C> <C>
John D. Weil............ 57 President of Clayton Management Co., St. Louis, Missouri, invest- 1992
ments, for more than five years. Mr. Weil also serves on the
Boards of Directors of CleveTrust Realty Investors, Cliffs
Drilling Company, PICO Holdings Inc., Todd Shipyards Corporation,
Southern Investors Service Co. Inc., Allied Healthcare Products,
Inc. and Baldwin & Lyons, Inc.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 2000
Brent D. Baird.......... 59 Private investor; formerly a Limited Partner of Trubee, Collins & 1990
Co., Buffalo, New York and a member of the New York Stock
Exchange, Inc. for more than five years. Mr. Baird serves on the
Boards of Directors of First Carolina Investors, Inc., First
Empire State Corporation, Todd Shipyards Corporation, Exolon-Esk,
Inc. and Merchants Group, Inc.
James T. Bartlett....... 61 Managing Director, Primus Venture Partners, Cleveland, Ohio, the 1996
fund manager for Primus Capital Fund and Primus Capital Funds II,
III and IV, venture capital limited partnerships, for more than
five years. Mr. Bartlett serves on the Boards of Directors of
Keithley Instruments, Inc. and Lamson & Sessions.
Albert C. Bersticker.... 63 Chairman and Chief Executive Officer, since January 1, 1996, 1992
President and Chief Executive Officer, from May 1991 to Decem-
ber 1995, of Ferro Corporation, producer of specialty coatings,
plastics, chemicals and ceramics. Mr. Bersticker also serves on
the Boards of Directors of Brush Wellman Corporation, Ferro
Corporation and KeyCorp.
William G. Pryor........ 58 President, since April 1993, of Van Dorn Demag Corporation, 1997
manufacturer of plastic injection molding equipment, President
and Chief Executive Officer, Van Dorn Corporation (predecessor to
Van Dorn Demag Corporation), January 1, 1992 to April 20, 1993.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 1999
R. Thomas Green, Jr..... 60 Chairman of the Board of Directors, since April 1, 1992, and 1992
President and Chief Executive Officer, from April 1, 1992 to
December 31, 1997, of Oglebay Norton.
Ralph D. Ketchum........ 71 President and Chief Executive Officer of RDK Capital, Inc., 1992
general partner of RDK Capital Limited Partnership, investments,
and Chief Executive Officer 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's Board of Directors, Mr. Ketchum was a long-term officer
and employee of General Electric, 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 serves on the
Board of Directors of Thomas Industries, Inc., Pacific Scientific
Company, Lithium Technologies, Inc. and Metropolitan Financial
Corp.
</TABLE>
22
<PAGE> 31
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE
---- --- ----------------------------------------------------------------- --------
<S> <C> <C> <C>
John N. Lauer........... 59 President, Chief Executive Officer and Director of Oglebay 1998
Norton, since January 1, 1998, retired private investor, 1994 to
December 1997, President and Chief Operating Officer, The BF
Goodrich Company, Chemical and Aerospace Company, 1990 to 1994.
Mr. Lauer also serves on the Boards of Diebold, Incorporated,
Menasha Corporation and BorsodChem, Rt.
</TABLE>
BOARD AND COMMITTEE ATTENDANCE
The Board met 10 times during 1997. No director attended fewer than 75% of
the total of all 1997 meetings of the Board and those committees on which he
served.
STRUCTURE/COMMITTEES OF THE BOARD
The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of Oglebay Norton.
However, in accordance with the corporate principles, it is not involved in the
day-to-day operating details. Members of the Board are kept informed of Oglebay
Norton's business through discussions with the President and Chief Executive
Officer and other officers, by reviewing monthly analyses and reports, and by
participating in Board and committee meetings.
The Board has four committees, described as follows:
Executive Committee. The members of the Executive Committee are Messrs.
Bares (Chairman), Baird, Bank, Bersticker and Green. The Executive Committee may
exercise all of the authority of the Board of Directors subject to specific
resolutions of the Board and Delaware law. The Executive Committee meets only as
called by its Chairman. The Executive Committee met twice during 1997.
Audit Committee. The members of the Audit Committee are Messrs. Bersticker
(Chairman), Baird, Bartlett and Pryor. The Audit Committee (i) reviews the
proposed audit programs (including both independent and internal) for each
fiscal year, the results of these audits and the adequacy of Oglebay Norton's
internal systems and controls, (ii) recommends to the Board the appointment of
independent auditors for the year, and (iii) reviews activities conducted under
Oglebay Norton's Legal and Ethical Compliance Program. The Audit Committee met
twice during 1997.
Compensation and Organization Committee. The members of the Compensation
and Organization Committee are Messrs. Weil (Chairman), Bartlett, Bersticker and
Ketchum. The Compensation and Organization Committee fixes compensation for the
executive officers of Oglebay Norton and considers corporate organizational
matters and employee benefit programs generally. The Board has also established
a Compensation Subcommittee whose members are Messrs. Weil (Chairman), Bartlett
and Ketchum. The Compensation Subcommittee reviews and approves compensation
matters that include Oglebay Norton's stock or are calculated, in whole or part,
with reference to the value of Oglebay Norton's stock. The Compensation and
Organization Committee met six times and the Compensation Subcommittee met once
during 1997.
Director Search and Governance Committee. The members of the Director
Search and Governance Committee are Messrs. Ketchum (Chairman), Bank, Pryor and
Weil. The Director Search and Governance Committee (i) considers, screens and
nominates candidates for election to the Board, (ii) reviews contributions of
current Board members, and (iii) reviews and makes recommendations on corporate
governance issues affecting the Board.
The Director Search and Governance Committee will consider nominees for the
Board of Directors submitted by stockholders. Recommendations by stockholders
should include 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 United States
citizen, the name, address and number of shares of Common Stock of Oglebay
Norton owned by the nominee and the recommending stockholder and the
23
<PAGE> 32
nominee's written consent to nomination. Nominations should be mailed to:
Chairman, Director Search and Governance Committee, c/o David G. Slezak,
Secretary and Director of Legal Affairs, Oglebay Norton Company, 1100 Superior
Avenue, Cleveland, Ohio 44114-2598.
COMPENSATION OF DIRECTORS
Directors who are not employees of Oglebay Norton receive a fee of $3,000
per quarter ($12,000 per year), an annual award of 200 shares of Common Stock of
Oglebay Norton under the Director Stock Plan, and $900 for each Board and
committee meeting attended. Directors are also reimbursed for expenses they
incur in attending Board and committee meetings.
The Board has adopted, subject to stockholder approval, the Oglebay Norton
Company Director Fee Deferral Plan which permits directors to defer all or part
of the cash portion of their compensation into: (a) share units based upon the
market price of Common Stock of Oglebay Norton; or (b) into an account as
deferred cash which is credited with a market rate of interest. Amounts deferred
into share units receive a 25% matching payment by Oglebay Norton, but amounts
deferred as cash do not receive any matching payment. See the proposal to
approve the Oglebay Norton Company Director Fee Deferral Plan in the section
above entitled "OGLEBAY NORTON COMPANY DIRECTOR FEE DEFERRAL PLAN," for a
summary of the Director Fee Deferral Plan.
DIRECTOR AGREEMENTS
Oglebay Norton has entered into separate standstill agreements with Brent
D. Baird and John D. Weil. These agreements limit to 11% the percentage of
Common Stock of Oglebay Norton which each of them and their respective
affiliates may own. The 11% limit is not affected if their ownership percentages
increase solely due to repurchases by Oglebay Norton of its Common Stock. The
standstill agreements also limit the rights of Messrs. Baird, Weil and their
respective affiliates to sell their shares of Common Stock of Oglebay Norton,
and prohibits them from voting their shares or participating in a proxy contest
against the recommendations of Oglebay Norton's Board. Pursuant to their
respective standstill agreements, the Board nominated Mr. Baird for election as
a director at the 1991 and 1994 Annual Meetings and Mr. Weil for election as a
director at the 1992 and 1995 Annual Meetings. Upon completion of the Merger,
the standstill agreements will remain in effect, in accordance with their terms,
with respect to the Common Shares of the Holding Company.
BENEFICIAL OWNERSHIP OF OGLEBAY NORTON COMMON STOCK
The following table shows the number of shares and percent of the
outstanding shares of Common Stock of Oglebay Norton beneficially owned on March
10, 1998, by each director of Oglebay Norton, each of the executive officers
named in the Summary Compensation Table set forth below, and by all directors
and executive officers as a group.
24
<PAGE> 33
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP OF CLASS
---- -------------------- --------
<S> <C> <C>
Brent D. Baird.............................................. 451,000(1)(4) 9.46%
1350 One M&T Plaza
Buffalo, New York 14203
Malvin E. Bank.............................................. 314,938(2)(4) 6.61%
3900 Key Center
127 Public Square
Cleveland, Ohio 44114
John D. Weil................................................ 549,800(3)(4) 11.53%
200 North Broadway, Suite 825
St. Louis, Missouri 63102-2573
William G. Bares............................................ 1,200(4) (7)
James T. Bartlett........................................... 600(4) (7)
Albert C. Bersticker........................................ 1,300(4) (7)
R. Thomas Green, Jr......................................... 12,716(5)(6) (7)
Ralph D. Ketchum............................................ 5,300(4) (7)
John N. Lauer............................................... 51,744 1.09%
William G. Pryor............................................ 400(4) (7)
Stuart H. Theis............................................. 2,506(5)(6) (7)
Mark P. Juszli.............................................. 1,038(5)(6) (7)
Richard J. Kessler.......................................... 10,175(5)(6) (7)
Paul V. Gorman, Jr.......................................... 4,783(5) (7)
Directors, nominees and executive officers as a group,
including those listed above (15 persons)................. 1,408,402(4)(5) 29.55%
</TABLE>
- ---------------
(1) Mr. Baird, together with other reporting persons, as a group, holds sole
voting and sole dispositive power as to 450,800 shares, of which Mr. Baird
holds 17,600 shares individually and 6,000 shares as a trustee.
(2) Mr. Bank's shares include 313,588 shares held in various trusts. As a
trustee, Mr. Bank has sole voting and dispositive power as to 210,118 shares
and, as to 104,820 shares, Mr. Bank shares the voting power and the
dispositive power with a co-trustee. In addition, Mr. Bank has sole voting
and dispositive power as to 1,350 shares held individually.
(3) Mr. Weil, together with other reporting persons, as a group, holds 549,800
shares, of which he holds sole voting and dispositive power as to 535,200
shares and shared voting and dispositive power as to 14,600 shares.
(4) Includes 200 shares which the individual (and 1,600 shares for directors and
executive officers as a group) will acquire, within 60 days, on the date of
the 1998 Annual Meeting of Stockholders 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 Oglebay Norton's
Employee Stock Ownership Plan as of December 31, 1997: Green -- 10,096
shares; Theis -- 2,106 shares; Juszli -- 1,038 shares; Kessler -- 8,975
shares; and, Gorman -- 4,783 shares; and directors and executive officers as
a group -- 27,392 shares.
(6) Additional stock rights held by executive officers: Each of Messrs. Green,
Theis, Kessler and Juszli are participants in Oglebay Norton's Long-Term
Incentive Plan (the "LTIP"), under which they have elected to forego a
portion of their annual compensation and invest it in share units, the value
of which are dependent upon the value of the shares of Common Stock of
Oglebay Norton. The share units are payable solely in the shares of Common
Stock of Oglebay Norton upon the named executive officer's retirement,
death, termination of employment or change in control, each as defined under
the LTIP. None of the share units held
25
<PAGE> 34
in the LTIP by the named executive officers are included in the above table.
Under the LTIP, as further described below (see "OFFICER
AGREEMENTS -- Long-Term Incentive Plan"), the total number of share units
attributable to each named executive officer, including Oglebay Norton
matches and dividends under the LTIP, as of March 10, 1998 are as follows:
<TABLE>
<CAPTION>
TOTAL NUMBER
NAME OF SHARE UNITS
---- --------------
<S> <C>
R. Thomas Green, Jr......................................... 17,459
Richard J. Kessler.......................................... 8,588
Mark P. Juszli.............................................. 7,991
Stuart H. Theis............................................. 1,433
</TABLE>
(7) Less than 1% of the outstanding shares of Common Stock of Oglebay Norton on
March 10, 1998.
The following table shows certain information with respect to all persons
who, as of March 10, 1998, were known by Oglebay Norton to beneficially own more
than five percent of the outstanding shares of Common Stock of Oglebay Norton,
other than Mr. Baird, Mr. Bank and Mr. Weil whose beneficial ownership of shares
of Common Stock of Oglebay Norton is reported above.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF OWNER BENEFICIAL OWNERSHIP OF CLASS
------------- -------------------- --------
<S> <C> <C>
KeyCorp 1,009,878(1) 21.19%
127 Public Square
Cleveland, Ohio 44114
Warburg Pincus Counsellors, Inc. 294,200(2) 6.17%
466 Lexington Avenue
New York, New York 10017-3147
Douglas N. Barr 289,040(3) 6.06%
3900 Society Center
127 Public Square
Cleveland, Ohio 44114-1216
Robert I. Gale, III 285,260(4) 5.98%
17301 St. Clair Avenue
Cleveland, Ohio 44110
Dimensional Fund Advisors, Inc. 265,056(5) 5.56%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
- ---------------
(1) As of February 13, 1998, based upon information contained in a Schedule 13G
filed with the Securities and Exchange Commission, KeyCorp has sole voting
power as to 422,702 shares, shared voting power as to 230,768 shares, sole
dispositive power as to 701,240 shares, and shared dispositive power as to
292,038 shares.
(2) As of January 9, 1997, based upon information contained in a Schedule 13G
filed with the Securities and Exchange Commission, Warburg Pincus
Counsellors, Inc. has beneficial ownership of 294,200 shares. According to
the Schedule 13G filed, Warburg, Pincus Counsellors, Inc. has sole voting
and dispositive power as to 244,600 shares.
(3) As of May 2, 1997, based upon information contained in a Schedule 13D filed
with the Securities and Exchange Commission, Mr. Barr has sole voting and
dispositive power as to 400 of these shares. As trustee, Mr. Barr has shared
voting and dispositive power as to 57,200 of these shares and, together with
Mr. Robert I. Gale III, shared voting and dispositive power as to 230,440 of
these shares.
26
<PAGE> 35
(4) As of May 2, 1997, based upon information contained in a Schedule 13D filed
with the Securities and Exchange Commission, Mr. Gale has sole voting and
dispositive power as to 54,820 shares, 4,198 shares of which he owns
individually and 50,622 shares of which he holds as trustee. Together with
Mr. Douglas N. Barr, Mr. Gale shares voting and dispositive power as to
230,440 of these shares.
(5) As of February 5, 1997, based upon information contained in a Schedule 13D
filed with the Securities and Exchange Commission, Dimensional Fund
Advisors, Inc. has sole voting power as to 178,656 shares. Certain persons
who are officers of Dimensional Fund Advisors, Inc. also serve as officers
of DFA Investment Dimensions Group Inc. (the "Fund") and The DFA Investment
Trust Company (the "Trust"), each an open-end management investment company
registered under the Investment Company Act of 1940. In their capacities as
officers of the Fund and the Trust, these persons have sole voting power as
to 50,000 additional shares owned by the Fund and 36,400 shares owned by the
Trust. Dimensional Fund Advisors, Inc. has sole dispositive power as to
265,056 shares, including the shares held by the Fund and the Trust.
PERFORMANCE GRAPH
The following is a graph which compares the five year cumulative return
from investing $100 on January 1, 1993 in each of Oglebay Norton Common Stock,
the S&P 500 Index of companies and the Valueline Composite Index of companies,
with dividends assumed to be reinvested when received.
<TABLE>
<CAPTION>
Valueline
Measurement Period Oglebay Composit
(Fiscal Year Covered) Norton S&P 500 Index
<S> <C> <C> <C>
1992 100 100 100
1993 100.345 109.99 113.22
1994 142.601 111.409 109.246
1995 180.237 153.265 132.941
1996 218.199 188.486 153.388
1997 420.543 251.364 187.532
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Oglebay Norton's Board of Directors has delegated to its Compensation and
Organization Committee (the "C & O Committee"), none of whose members is a
former or current officer or employee of Oglebay Norton or any of its
subsidiaries, general responsibility for executive compensation matters. Oglebay
Norton has further delegated to the Compensation Subcommittee, which is
comprised of all of the members of the C & O Committee other than Mr.
Bersticker, responsibility for executive compensation actions to be taken by a
committee of "outside directors" as defined in the Treasury Regulations
promulgated under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"), and "non-employee directors" as defined
in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.
On December 17, 1997, Oglebay Norton entered into an Employment Agreement
with Mr. John N. Lauer, the terms of which had been negotiated on behalf of
Oglebay Norton by the C & O Committee, pursuant to which Mr. Lauer became
President and Chief Executive Officer of Oglebay Norton, succeeding Mr. Green in
these
27
<PAGE> 36
posts, effective January 1, 1998. Under the Employment Agreement, Mr. Lauer will
not be paid a salary during his tenure with Oglebay Norton. Rather, as more
fully described in this Proxy Statement-Prospectus under the heading "OFFICER
AGREEMENTS--Employment Agreement with Mr. John N. Lauer," the primary elements
of his compensation under the Employment Agreement are a grant of restricted
shares a grant of an option to purchase additional shares and an annual bonus of
up to $200,000 per year. The C & O Committee concluded that the largely
stock-based compensation package contained in the Employment Agreement is in the
best interests of Oglebay Norton and its stockholders. The remainder of this
report deals with compensation of executives other than Mr. Lauer, including,
specifically, compensation of Mr. Green, who held the post of Chairman,
President and Chief Executive Officer throughout 1997.
The C & O Committee seeks to compensate executive officers based on their
contributions to Oglebay Norton's success, and specifically to reward officers
who make significant contributions to Oglebay Norton's short-term and long-term
profitability. In 1997, executive officers' annual compensation packages were
comprised of an annual salary, an annual bonus and equity-based compensation.
Annual Salary. Executive officers' annual salaries for 1997 were set by the
C & O Committee after consideration of each executive officer's contribution to
Oglebay Norton's performance in 1996, Oglebay Norton's financial performance and
prospects, and the level of competitive salaries paid to executives in
comparable positions with companies whose sales and revenues were similar to
those of Oglebay Norton.
Bonuses. Executive officers were eligible to receive cash bonuses with
respect to 1997 under Oglebay Norton's Annual Incentive Plan (the "Incentive
Plan") pursuant to which the C & O Committee established corporate, business
unit, and individual performance goals for the year. The corporate and business
unit performance measures for 1997 under the Incentive Plan were corporate
income from operations and business unit operating profit, respectively. The
amount of the incentive award under the Incentive Plan, if any, to each
participant is based on the participant's target award level, the weightings
assigned to each company, business unit and individual performance goal
applicable to the participant and achievement of those goals.
Target awards are determined with reference to the participant's base
salary and range from 15% to 50% of base salary. Nominal awards may range from
0% to 150% of target awards, depending on the extent to which corporate,
business unit, and individual performance goals are met or exceeded. In
addition, the C & O Committee has the discretion to increase or decrease the
amount of any particular nominal award by a maximum of 25%. If threshold
performance goals are not achieved, no award may be made under the Incentive
Plan. Based on the extent to which the relevant goals were met during 1997,
actual awards for the year under the Incentive Plan ranged from 17% to 73% of
base salary.
Equity-Based Compensation. Oglebay Norton's Long-Term Incentive Plan
authorizes the Compensation Subcommittee to grant equity-based incentive
compensation (including stock options, stock appreciation rights, restricted
stock, performance units and share units) to executive officers and other key
employees for performance occurring over a period longer than one fiscal year.
The Compensation Subcommittee believes that Oglebay Norton is 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 shares of Common Stock of Oglebay Norton
by its officers.
On October 29, 1997, the Compensation Subcommittee granted nonqualified
stock options to 21 executives and key employees covering an aggregate of 48,700
shares of Common Stock of Oglebay Norton, each at an exercise price of $30 5/8
(the fair market value of the shares on the grant date). In addition, the
Compensation Subcommittee made grants under the Long-Term Incentive Plan in
connection with executives' decisions to defer a portion of their bonuses
received under the Incentive Plan. Amounts so deferred are invested in "share
units" based on the fair market value of the shares of Common Stock of Oglebay
Norton on the date the bonus otherwise would be due. In addition, each executive
deferring a portion of a bonus for 1997 received a matching grant of additional
share units equal to 50% of the share units allocable to the bonus deferred,
with the executive's rights in the matching grant share units vesting over five
years. Deferred and matching amounts are paid in shares of Common Stock of
Oglebay Norton and are generally payable only upon termination of
28
<PAGE> 37
employment, death or retirement. Executives receiving bonuses under the
Incentive Plan for 1997 elected to defer from 20% to 100% of those bonuses.
Chief Executive Officer. During 1997, pursuant to the recommendation of the
C & O Committee, as approved by the Board of Directors, Mr. Green was paid a
base salary of $310,000, effective March 1, 1997, for his services as Oglebay
Norton's Chairman, President and Chief Executive Officer. In recommending Mr.
Green's 1997 base salary, the C & O Committee considered Mr. Green's performance
through the end of 1996 in executing Oglebay Norton's Corporate Strategic Plan,
Oglebay Norton's financial performance and Mr. Green's salary level relative to
the salary levels of other chief executive officers in companies that compete in
similar markets and businesses.
Mr. Green received a bonus for 1997 under the Incentive Plan which, taking
into account all factors (including the C & O Committee's discretion to vary any
award otherwise payable by up to an additional 25%), could have ranged from 0%
to 94% of his 1997 base salary. Based upon the extent to which Oglebay Norton
and Mr. Green attained corporate and performance goals during 1997, Mr. Green
was awarded a bonus of $225,000.
In connection with the general grant of nonqualified options to executives
and other key employees on October 29, 1997, the Compensation Subcommittee
granted Mr. Green a nonqualified option under the Long-Term Incentive Plan to
acquire 20,000 shares of Common Stock of Oglebay Norton at an exercise price of
$30 5/8. To afford Mr. Green an opportunity to defer a portion of his 1997 bonus
and receive a matching grant from Oglebay Norton comparable to the matching
grant received by other executives who elected to defer portions of their
bonuses and receive a matching grant under the Long-Term Incentive Plan, the C &
O Committee granted to Mr. Green a 50% match of the $180,000 of his 1997 bonus
that he elected to defer. Under this special arrangement, the amount deferred
and the match amount will be credited, until withdrawn, with earnings each year
at the annual rate earned by a specified fund maintained under Oglebay Norton's
Incentive Savings Plan. The match amount ($90,000) is subject to the same
vesting and distribution provisions as are applicable to matching share units
granted to other executives under the Long-Term Incentive Plan, except that
settlement of both the deferred and match amount will be in cash.
Compliance with Section 162(m) of the Internal Revenue Code. Section 162(m)
of the Internal Revenue Code generally disallows a tax deduction to a publicly
held corporation for compensation over $1 million paid in any year to any
individual who is either the corporation's Chief Executive Officer or one of the
four other most highly compensated executive officers of the corporation.
Qualifying "performance-based compensation" will not be subject to the deduction
limit if certain requirements are met. At present, the Performance Option
granted to Mr. Lauer by the Compensation Subcommittee is the only compensation
element that provides a sufficiently large dollar amount of compensation to
bring the Section 162(m) limit into play. However, subject to stockholder
approval of the Performance Option, the Compensation Subcommittee believes that
compensation under the Performance Option will qualify as performance-based
compensation and that Oglebay Norton's deduction with respect to that
compensation will not be limited by Section 162(m).
COMPENSATION AND
ORGANIZATION COMMITTEE
John D. Weil, Chairman
James T. Bartlett
Albert C. Bersticker
Ralph D. Ketchum
February 20, 1998
29
<PAGE> 38
SUMMARY COMPENSATION TABLE
The following table sets forth individual compensation information for
Oglebay Norton's Chief Executive Officer and the four other most highly
compensated executive officers whose total annual salary and bonus for the
fiscal year ended December 31, 1997, exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------
OTHER ANNUAL ALL OTHER ANNUAL
NAME AND BONUS COMPENSATION COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3)
------------------ ---- --------- ------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
R. Thomas Green, Jr.* 1997 $305,833 $45,000 $16,803 $55,441
Chairman of the Board 1996 283,600 30,000 19,026 45,250
1995 276,600 68,000 16,638 42,305
Stuart H. Theis 1997 153,167 80,000 16,760 44,195
Vice President-- 1996 142,767 24,300 -0- 12,430
Marine Transportation 1995 136,600 44,100 -0- 12,441
Richard J. Kessler 1997 154,333 16,000 8,879 33,979
Vice President-- 1996 150,333 13,500 8,879 24,785
Finance and Planning 1995 147,000 18,600 8,879 25,088
Mark P. Juszli 1997 137,667 20,000 5,621 24,853
Vice President-- 1996 125,333 23,200 -0- 10,913
Industrial Sands 1995 117,300 17,500 -0- 6,682
Paul V. Gorman, Jr. 1997 105,833 44,000 -0- 15,278
Assistant Vice President-- 1996 97,500 15,763 -0- 8,079
Human Resources 1995 94,000 18,457 -0- 7,259
</TABLE>
- ---------------
* Mr. Green stepped down from the positions of President and Chief Executive
Officer on December 31, 1997.
(1) Amounts shown for bonuses are the portion of the total bonuses of Messrs.
Green, Theis, Kessler and Juszli received in cash under Oglebay Norton's
Annual Incentive Plan. Total amounts of bonuses earned under the Annual
Incentive Plan and portions of that bonus elected to be deferred by the
following executives under the Oglebay Norton Company Long-Term Incentive
Plan ("LTIP") (or, in the case of Mr. Green's 1997 bonus, pursuant to the
special arrangement described above under the heading "COMPENSATION OF
EXECUTIVE OFFICERS -- Report of the Compensation Committee on Executive
Compensation") were, respectively, as follows: Green (1997 -- $225,000 and
$180,000; 1996 -- $150,000 and $120,000; 1995 -- $170,000 and $102,000);
Theis (1997 -- $100,000 and $20,000; 1996 -- $27,000 and $2,700; 1995 --
$49,000 and $4,900); Kessler (1997 -- $80,000 and $64,000; 1996 -- $45,000
and $31,500; 1995 -- $62,000 and $43,400); and, Juszli (1997 -- $85,000 and
$65,000; 1996 -- $58,000 and $34,800; 1995 -- $50,000 and $32,500). Deferred
portions of bonuses of Messrs. Green, Theis, Kessler and Juszli, which were
automatically converted upon deferral into share units based on the fair
market value of shares of Common Stock of Oglebay Norton, are shown in the
Long-Term Incentive Plan Table, below. Mr. Gorman was not eligible to
participate in the Annual Incentive Plan bonus deferral portion of the LTIP
during the years presented. The Annual Incentive Plan bonus deferral feature
of the LTIP has been discontinued effective for bonus payments earned in
1998.
(2) Represents "gross-up" for taxes in respect of payments by Oglebay Norton to
the named executives for life insurance premiums.
(3) Includes contributions by Oglebay Norton for the named executives under
Oglebay Norton's Incentive Savings Plan (the "Savings Plan") and Oglebay
Norton's Employee Stock Ownership Plan (the "ESOP"), respectively
(Green -- $3,200 and $19,897; Theis -- $3,063 and $19,047; Kessler -- $3,087
and $19,192; Juszli -- $2,753 and $17,120; and, Gorman -- $2,117 and
$13,161); payments by Oglebay Norton to the named executive for life
insurance premiums (Green -- $19,200, Theis -- $22,085; Kessler -- $11,700;
and,
30
<PAGE> 39
Juszli $4,980); and contributions under the Supplemental Savings and Stock
Ownership Plan of $13,144 for Mr. Green.
STOCK OPTION GRANTS IN 1997
Options granted to the named executive officers will expire on the tenth
anniversary of the grant dates. Option exercise prices were in all cases equal
to the fair market value of a share of Common Stock of Oglebay Norton on the
date the option was granted. The options have no value unless Oglebay Norton's
stock price appreciates and the recipient satisfies the applicable vesting
requirements.
The following table shows the stock options granted to the named executive
officers during 1997, and the potential realizable value of those grants (on a
pre-tax basis) determined in accordance with Securities and Exchange Commission
rules. The information in this table shows how much the named executive officers
may eventually realize in future dollars under two hypothetical situations: if
the stock gains 5% or 10% in value per year, compounded over the ten-year life
of the options. These are assumed rates of appreciation and are not intended to
forecast future appreciation of the shares of Common Stock of Oglebay Norton.
Also included in this table is the increase in value to all common stockholders
of Oglebay Norton using the same assumed rates of appreciation.
For perspective, in ten years, one share of Common Stock of Oglebay Norton
valued at $30.625 on October 29, 1997 (the grant date) would be worth $49.88,
assuming the hypothetical 5% compounded growth rate, or $79.43, assuming the
hypothetical 10% compounded growth rate.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(3)
------------------------------------------- ---------------------------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED(#)(1) IN 1997(2) PRICE($/SH.) DATE 5% ($) 10% ($)
---- ------------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
R. T. Green, Jr...... 20,000 41.1% $30.625 10/29/07 $385,100 $976,100
S. H. Theis.......... 3,700 7.6% 30.625 10/29/07 71,244 180,579
R. J. Kessler........ 3,700 7.6% 30.625 10/29/07 71,244 180,579
M. P. Juszli......... 3,700 7.6% 30.625 10/29/07 71,244 180,579
P.V. Gorman, Jr...... 1,700 3.5% 30.625 10/29/07 32,734 82,960
INCREASE IN VALUE TO ALL COMMON STOCKHOLDERS(4)................................ $92.1MILLION $233.5MILLION
</TABLE>
- ---------------
(1) The options vest 25% each year commencing October 29, 1998. The options also
vest if the employee retires and is otherwise entitled to a normal, early or
shutdown pension under the Oglebay Norton Company Pension Plan for Salaried
Employees. In that event, the retired employee may exercise the options
within two years from the date of retirement, but not beyond the October 29,
2007 option expiration date.
(2) Percentage based on the total number of options granted to employees under
the Oglebay Norton Company Long-Term Incentive Plan. This percentage
calculation excludes the 380,174 options granted to Mr. Lauer, on December
17, 1997 under the Performance Option Agreement (see "OFFICER AGREEMENTS --
Employment Agreement with Mr. John N. Lauer"). If Mr. Lauer's options were
included, then each of the officers in the table would have received less
than 1% of the total options granted to employees. Mr. Lauer became the
President and Chief Executive Officer of Oglebay Norton on January 1, 1998.
(3) Calculated over a ten-year period representing the life of the options.
(4) Calculated using a price of $30.625 per share of Common Stock of Oglebay
Norton, the closing price on the date the options were granted, and the
total weighted average number of shares of Common Stock of Oglebay Norton
outstanding for 1997 (4,784,892 shares).
31
<PAGE> 40
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE OR
SHARES, UNITS OR OTHER PERIOD UNTIL
NAME OTHER RIGHTS(#)(1) MATURATION OR PAYOUT(2)
---- ------------------ -----------------------
<S> <C> <C>
R. Thomas Green, Jr............................. 7,448.28 5 years
Stuart H. Theis................................. 827.58 5 years
Richard J. Kessler.............................. 2,648.28 5 years
Mark P. Juszli.................................. 2,689.65 5 years
</TABLE>
- ---------------
(1) Reflects the total of: (a) the portion of the named executive's total 1997
bonus deferred under the Oglebay Norton Company Long-Term Incentive Plan
(the "LTIP") (or, in the case of Mr. Green's 1997 bonus, pursuant to the
special arrangement described above under the heading "COMPENSATION OF
EXECUTIVE OFFICERS -- Report of the Compensation Committee on Executive
Compensation"); and (b) 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 shares of Common Stock of Oglebay Norton, as follows:
Green -- 4,965.52 and 2,482.76; Theis -- 551.72 and 275.86;
Kessler -- 1,765.52 and 882.76; and, Juszli -- 1,793.10 and 896.55. Mr.
Gorman was not eligible to participate in the bonus deferral portion of the
LTIP during 1997. Bonus and matching contribution amounts were automatically
converted into share units at the rate of $36.25 per share, the closing
price of Oglebay Norton's Common Stock on the date the 1997 bonuses were
paid and deferred as previously elected by such officers.
(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 LTIP account. Share units
reflecting the matching contribution, and dividends paid on those share
units, generally do not vest for five years, assuming the executive's
continuous service with Oglebay Norton for the five-year period. However,
distributions of vested amounts will generally be made only upon a
participant's retirement, death or other termination of employment. All
distributions under the LTIP will be made in shares of Common Stock of
Oglebay Norton.
32
<PAGE> 41
RETIREMENT PLANS
SALARIED EMPLOYEES PENSION PLAN
EXCESS AND TRA SUPPLEMENTAL BENEFIT RETIREMENT PLAN
The following table sets forth the annual pension payable under the Oglebay
Norton Company Pension Plan for Salaried Employees (the "Salaried Plan") and the
Oglebay Norton Company 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, 1998)
----------------------------------------------------
FINAL YEARS OF SERVICE
ANNUAL AVERAGE ----------------------------------------------------
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------- -------- -------- -------- -------- --------
<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
600,000 135,000 180,000 225,000 270,000 315,000
650,000 146,250 195,000 243,750 292,500 341,250
</TABLE>
Benefits under the Salaried Plan and the Excess Benefit Retirement Plan are
based on average annual compensation for the highest five years during the last
10 years of employment prior to retirement ("Average Compensation"). Covered
compensation is equal to total base pay and incentive compensation (including
amounts deferred under the Long-Term Incentive Plan), which is substantially the
same as shown in the salary and bonus columns of the Summary Compensation Table
set forth above, (including total bonus referred to in footnote 1 to that
table). The annual benefit is calculated by multiplying the participant's
Average Compensation by a factor of 1 1/2% and the participant's years of
covered service (but not below a minimum benefit unrelated to compensation).
Benefits, which are paid in a straight life annuity form, are not subject to
reduction for Social Security or other offset. Certain surviving spouse benefits
are also available under the plans, as well as early retirement and facility
shutdown benefits. The Pension Plan Benefits table is prepared without regard to
benefit limitations imposed by the Internal Revenue Code. The years of benefit
service credited for executive officers named in the Summary Compensation Table
are: Mr. Green -- 32.6 years; Mr. Theis -- 5.0 years; Mr. Kessler -- 28.2 years;
Mr. Juszli -- 3.7 years; and Mr. Gorman -- 10.4 years.
The Internal Revenue Code limits the benefits provided under the Salaried
Plan. The Excess Benefit Retirement Plan provides for the payment, out of
Oglebay Norton's general funds, of the amount that a participant would have
received under the Salaried Plan but for the Internal Revenue Code limits. The
above table, which does not reflect those limits, shows the total annual pension
benefits payable under both the Salaried Plan and the Excess Benefit Retirement
Plan. The Excess Benefit Retirement Plan also provides supplemental benefits
under provisions in effect under the Salaried Plan prior to 1989 if the current
provisions would result in a lesser benefit. Since the pre-1989 benefit formula
has been grandfathered, Mr. Green will be the only participant receiving such a
supplemental benefit from the Excess Benefit Retirement Plan. That lifetime
benefit is estimated at $10,229 annually, commencing at normal retirement age.
33
<PAGE> 42
SUPPLEMENTAL SAVINGS AND STOCK OWNERSHIP PLAN
As with the Salaried Plan, the Internal Revenue Code limits the amount that
Oglebay Norton can contribute for an employee under its Savings Plan and
Employee Stock Ownership Plan ("ESOP"). The Supplemental Savings and Stock
Ownership Plan (the "Supplemental Plan"), provides for the payment, out of
Oglebay Norton's general funds, of the amount by which certain participants'
benefits under the Savings Plan and ESOP would exceed the limitations applicable
to those plans. The terms of the Supplemental Plan provide a benefit equal to
that which the participants would have received under the Savings Plan and ESOP
but for the Internal Revenue Code limitations. Benefits under the Supplemental
Plan 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 those available under the Savings Plan and ESOP. The terms of the
Supplemental Plan also prohibit a participant from competing with Oglebay Norton
for 10 years or wrongfully disclosing a trade secret. Based upon current
compensation levels and the period of time during which Mr. Green (six years)
and Mr. Kessler (less than one year) have accrued benefits under the
Supplemental Plan (other than benefits relating solely to dividends on Oglebay
Norton Common Stock), the only named executive officers eligible for
supplemental benefits are Messrs. Green and Kessler, who would be entitled to
benefits of $139,507 and $51, respectively.
OFFICER AGREEMENTS
SEPARATION AGREEMENT WITH MR. R. THOMAS GREEN, JR.
On December 17, 1997, Oglebay Norton entered into an agreement with Mr.
Green pursuant to which he was retained to provide services to Oglebay Norton
through June 30, 1999. The agreement provides for Mr. Green's stepping down as
President and Chief Executive Officer of Oglebay Norton effective as of December
31, 1997, his service as Chairman of the Board of Oglebay Norton through the
1998 Annual Meeting of Stockholders and his continued service thereafter as a
director through completion of his current term in April 1999. Mr. Green will
also serve as a director of the Holding Company until April 1999. Whether Mr.
Green is nominated as a candidate for election as a director after April 1999
will be determined by him and the Board of Directors of the Holding Company at
that time. While Mr. Green provides services to Oglebay Norton, Oglebay Norton
is to pay compensation to him at the rate of not less than $465,000 per year and
to provide to him all other benefits that are provided to full-time salaried
employees of Oglebay Norton. In addition, Oglebay Norton is to (i) pay such
premiums as may be required to have fully paid at age 65 a $720,000 face amount
life insurance policy on Mr. Green's life owned by him, (ii) provide Mr. Green
with up to $5,000 of retirement planning consultation (plus a "gross-up" amount
sufficient to enable Mr. Green to pay all taxes on the value of the consultation
and on the gross-up amount), (iii) provide Mr. Green with a furnished office and
related support and secretarial services through June 30, 2004, and (iv)
continue to pay Mr. Green's club membership dues and assessments for as long as
Mr. Green desires to maintain his membership.
EMPLOYMENT AGREEMENT WITH MR. JOHN N. LAUER
On December 17, 1997, Oglebay Norton entered into an employment agreement
(the "Employment Agreement") with Mr. Lauer pursuant to which he (i) became
employed by Oglebay Norton immediately upon execution of the Employment
Agreement, and (ii) became President and Chief Executive Officer of Oglebay
Norton effective January 1, 1998. The Employment Agreement contemplates Mr.
Lauer's election as Chairman of the Board of Directors at the time of the 1998
Annual Meeting of Stockholders and his continued employment as Chairman,
President and Chief Executive Officer of Oglebay Norton thereafter through
January 2, 2003. The Employment Agreement was negotiated with Mr. Lauer on
behalf of Oglebay Norton by the Compensation and Organization Committee of the
Board of Directors and was approved by the full Board of Directors at its
regularly scheduled meeting held on December 17, 1997.
The compensation arrangements embodied in the Employment Agreement are
intended to tie Mr. Lauer's compensation for services directly to the
performance of Oglebay Norton -- and particularly the price of shares of Common
Stock of Oglebay Norton -- over the term of Mr. Lauer's employment. Mr. Lauer
will not be paid a salary during his tenure with Oglebay Norton. Rather, the
primary elements of his compensation under the
34
<PAGE> 43
Employment Agreement are (i) a grant of restricted shares of Common Stock of
Oglebay Norton, (ii) a grant of an option to purchase additional shares of
Common Stock of Oglebay Norton, and (iii) an annual bonus of up to $200,000 per
year depending upon the performance of Oglebay Norton during the year. The Board
of Directors determined that these compensation arrangements are appropriate in
that the ultimate value of the compensation package provided to Mr. Lauer will
depend in large part upon the ultimate value achieved by Oglebay Norton under
Mr. Lauer's management. The Board of Directors believes that the direct, largely
stock-based relationship between performance and reward is in the best interests
of Oglebay Norton and its stockholders. Each of the primary elements of Mr.
Lauer's compensation arrangements is described in more detail below.
Restricted Stock. On January 19, 1998, Oglebay Norton granted to Mr. Lauer
25,744 shares of Common Stock of Oglebay Norton subject to restrictions set
forth in the Employment Agreement (the "Restricted Shares"). The making of this
grant was contingent upon Mr. Lauer's personal investment of at least $1,000,000
in shares of Common Stock of Oglebay Norton. As provided in the Employment
Agreement, the number of Restricted Shares granted is equal to the number of
shares acquired by Mr. Lauer for his $1,000,000 investment. Of the 25,744
Restricted Shares granted, 20% (5,148 shares) were fully vested and
nonforfeitable as of the grant date. Assuming Mr. Lauer continues in the employ
of Oglebay Norton, another 20% of the total number of Restricted Shares will
vest and become nonforfeitable on January 1 of each of 1999, 2000, 2001, and
2003 (i.e., on each of the first, second, third, and fifth anniversaries of
January 1, 1998). However, if Mr. Lauer reduces his personal investment by
disposing of any of the shares he acquired for his $1,000,000 investment at any
time before January 1, 2003, any Restricted Shares that have not become fully
vested and nonforfeitable will be forfeited at the time of the reduction in Mr.
Lauer's personal investment. For these purposes, shares as to which (i) the
beneficial interest is held by any of certain members of Mr. Lauer's family, and
(ii) the voting rights are controlled by Mr. Lauer, will be treated as held by
Mr. Lauer.
If, before the restrictions on all of the Restricted Shares have lapsed,
Mr. Lauer's employment with Oglebay Norton is terminated by Oglebay Norton
without "Cause," Mr. Lauer is "Constructively Terminated," or Mr. Lauer
terminates his employment by notice to the Board of Directors within 90 days
after the occurrence of a "Change of Control" (with each such term defined as
provided in the Employment Agreement), Mr. Lauer's rights to all of the
Restricted Shares will become fully vested and nonforfeitable. If Mr. Lauer's
employment with Oglebay Norton is terminated by death or disability during 1998
or 1999, an aggregate of 12,872 Restricted Shares (50% of the entire grant) will
be fully vested and nonforfeitable; if his employment is terminated by death or
disability during 2000, an aggregate of 18,021 Restricted Shares (70% of the
entire grant) will be fully vested and nonforfeitable; if his employment is
terminated by death or disability during 2001, an aggregate of 21,882 Restricted
Shares (85% of the entire grant) will be fully vested and nonforfeitable; and if
his employment is terminated by death or disability after December 31, 2001, all
25,744 of the Restricted Shares will be fully vested and nonforfeitable (in each
case including any Restricted Shares that had previously become fully vested and
nonforfeitable). If Mr. Lauer's employment is terminated by Oglebay Norton for
Cause or by Mr. Lauer other than as a result of a Constructive Termination, any
Restricted Shares that were not already fully vested and nonforfeitable will be
forfeited at the time of termination.
Mr. Lauer elected under Section 83(b) of the Internal Revenue Code to
recognize the entire value of the shares of Common Stock of Oglebay Norton
subject to the grant as current income as of the date of the grant and without
regard to the restrictions on those shares. Mr. Lauer has also made arrangements
to satisfy the obligations to pay federal, state and local income tax in
connection with the grant and the income recognized in connection with the
grant.
Performance Option. As provided by the Employment Agreement, the
Compensation Subcommittee granted to Mr. Lauer, on December 17, 1997, subject to
the approval of the stockholders of Oglebay Norton, an option to acquire up to
380,174 shares at an exercise price of $38.00 per Share. The total of 380,174
shares subject to the Performance Option equals 8% of the entire number of
shares outstanding both on the grant date and on January 1, 1998. The $38.00 per
share exercise price is $6.00 above the per share closing price as reported on
the NASDAQ National Market on December 16, 1997 (the last closing price
available at the time the Employment Agreement was executed). The Performance
Option will not be exercisable by Mr. Lauer unless and until the approval of
Oglebay Norton's stockholders is obtained.
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<PAGE> 44
In the normal course, the Performance Option will first become exercisable
on January 1, 2001, after Mr. Lauer has been employed by Oglebay Norton for
three full years. If Mr. Lauer remains in the employ of Oglebay Norton
throughout the term contemplated by the Employment Agreement (i.e., through
January 2, 2003), the Performance Option, to the extent not previously exercised
by him, will remain exercisable through June 30, 2005. Any part of the
Performance Option not earlier exercised or terminated will terminate at the
close of business on June 30, 2005.
The exercise price under the Performance Option may be paid by Mr. Lauer in
cash or in such other form of consideration as the Compensation Subcommittee may
determine to accept including (i) delivery of instructions to a broker to
deliver to Oglebay Norton sale or loan proceeds to pay the exercise price, (ii)
delivery of shares, (iii) surrender of a portion of the Performance Option
itself, or (iv) any combination of these various methods. The Compensation
Subcommittee may permit or require Mr. Lauer to satisfy, by such means as the
Compensation Subcommittee may determine, any withholding tax obligation arising
from any exercise of the Performance Option.
If, before January 2, 2003, Mr. Lauer's employment with Oglebay Norton is
terminated by Oglebay Norton without Cause, Mr. Lauer is Constructively
Terminated, or Mr. Lauer terminates his employment by notice to the Board of
Directors within 90 days after the occurrence of a Change of Control, the
Performance Option, to the extent not previously exercised, will become
immediately exercisable and will remain exercisable thereafter through January
2, 2004, at which time it will be terminated.
If Mr. Lauer dies or his employment is terminated by Oglebay Norton on
account of his disability before January 1, 2001, the Performance Option will be
terminated as of the date of his death or termination due to disability without
ever having become exercisable. If Mr. Lauer dies or his employment is
terminated by Oglebay Norton on account of his disability after December 31,
2000 and before January 2, 2003, the Performance Option will remain exercisable
through the first anniversary of the date of his death or termination due to
disability and will be terminated as of the close of business on that first
anniversary.
If, before January 2, 2003, Mr. Lauer's employment is terminated by Oglebay
Norton for Cause or by Mr. Lauer voluntarily (and not in response to a
Constructive Termination), the Performance Option will be terminated on the date
of termination of employment.
Under currently applicable provisions of the Internal Revenue Code, the
grant of the Performance Option had no immediate tax consequences to Oglebay
Norton or to Mr. Lauer. Mr. Lauer will recognize compensation income at the time
of exercise of the Performance 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. Oglebay Norton will be entitled to a deduction in the same
taxable year and in the same amount as Mr. Lauer recognizes compensation income
as a result of the exercise of the Performance Option, provided Oglebay Norton
satisfies applicable withholding requirements.
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<PAGE> 45
NEW PLAN BENEFITS -- PERFORMANCE OPTIONS
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING
NAME AND OPTIONS
PRINCIPAL POSITION GRANTED(#)
------------------ ----------------
<S> <C>
R. Thomas Green, Jr......................................... --
Chairman of the Board
Stuart H. Theis............................................. --
Vice President -- Marine Transportation
Richard J. Kessler.......................................... --
Vice President -- Finance and Planning
Mark P. Juszli.............................................. --
Vice President -- Industrial Sands
Paul V. Gorman, Jr.......................................... --
Assistant Vice President -- Human Resources
Executive Officers as a Group(1)............................ 380,174(2)
Non-Executive Officer Directors as a Group.................. --
Non-Executive Officer Employees as a Group.................. --
</TABLE>
- ---------------
(1) John N. Lauer, who became Oglebay Norton's President and Chief Executive
Officer on January 1, 1998, is the sole member of this group who has
received a Performance Option grant.
(2) The expiration date, which is dependent on various factors, and the material
conditions to the exercise of the Performance Option granted to Mr. Lauer
are described in this section above.
Annual Bonus. Under the Employment Agreement, Mr. Lauer is eligible to
receive a cash bonus with respect to each calendar year during which he is
employed by Oglebay Norton with the amount of the bonus ranging in value from $0
to $200,000, depending upon the extent to which Oglebay Norton and Mr. Lauer
achieve such goals as may be specified in an incentive plan to be adopted by the
Compensation Subcommittee by the end of February during each calendar year. Any
cash bonus earned during a calendar year will be paid by March 15 of the
immediately following year.
Other Benefits. Oglebay Norton will provide to Mr. Lauer the same
perquisites as it has customarily provided to its top executives. Oglebay Norton
will also provide to Mr. Lauer a supplemental retirement benefit plan that will
provide to him retirement benefits that, when added to any benefits payable to
him under the Salaried Plan, will equal the benefits he would have been entitled
to under the Salaried Plan if (i) in addition to any bonuses received by him,
there had been included in his covered compensation, throughout the period of
his employment with Oglebay Norton, salary earned by him at the rate of $350,000
per year, and (ii) there were no limits on the amount of covered compensation
that could be taken into account in determining the benefit payable to him under
the Salaried Plan. If Mr. Lauer remains in the employ of Oglebay Norton through
January 2, 2003 and receives maximum (i.e., $200,000) annual bonuses, the
aggregate retirement benefit under the Salaried Plan and the supplemental plan
will be the equivalent of an annual lifetime benefit of $38,250 per annum.
The Employment Agreement obligates Mr. Lauer to refrain from competing with
Oglebay Norton while he is employed by Oglebay Norton and for a period of two
years after his employment with Oglebay Norton is terminated.
OFFICER AGREEMENTS EFFECTIVE UPON "CHANGE IN CONTROL"
Oglebay Norton has entered into separate agreements (collectively, the
"Officer Agreements") with the executive officers listed in the Summary
Compensation Table set forth above. The Officer Agreements are designed to
retain these individuals and provide for continuity of management in the event
of any actual or
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<PAGE> 46
threatened "Change in Control" (as defined in the Officer Agreements) of Oglebay
Norton. None of the Officer Agreements will become effective unless, and until,
there is a Change in Control.
There are two "triggers" which apply to the Officer Agreements. The first
"trigger" requires that a "Change in Control" occur. Following a Change in
Control, the officer is entitled to continued employment at a compensation rate
equal to the greatest of that in effect (i) immediately before the Change in
Control, (ii) two years before the Change in Control, or (iii) such greater rate
determined by Oglebay Norton, plus continued participation in specified benefit
plans as an executive officer ("Contract Compensation"). The second "trigger" is
tripped if, following a Change in Control, the officer is terminated without
"Cause", or the officer terminates his employment for "Good Reason" (as defined
in the Officer Agreements). If the second "trigger" is tripped, then the officer
is entitled to receive Contract Compensation in lieu of employment, but only for
the longer of the time remaining in the original 30-month contract term
(following the Change in Control), or six months. Following employment
termination, the officer is obligated to endeavor to mitigate damages by seeking
comparable employment elsewhere and, to the extent the officer is successful,
Contract Compensation is reduced, dollar-for-dollar, for compensation and
benefits received from the subsequent employer. In addition, for as long as
Contract Compensation is received, the officer agrees neither to compete against
Oglebay Norton nor to disclose any of its trade secrets. Finally, Contract
Compensation under the Officer Agreements will be reduced if and to the extent
necessary to prevent any portion from being treated as excess parachute payments
under the Internal Revenue Code.
"POUR-OVER" AND IRREVOCABLE TRUSTS
Oglebay Norton has made commitments under various plans and agreements for
supplemental pension benefits, deferred and executive compensation arrangements,
and obligations arising in the event of a change in control, which it has not
been required to fund on a current basis (collectively, "Benefit Plans"). In
order to provide assurances that those commitments will be honored, Oglebay
Norton has established three trusts with independent trustees to fund those
Benefit Plan obligations in the event of a Change in Control (as defined in the
trust documents).
Irrevocable Trust Agreement I ("Trust I") exists to provide additional
assurances for benefits under a 1974 Supplemental Retirement Plan, all
participants of which have retired from Oglebay Norton. Irrevocable Trust
Agreement II ("Trust II") provides additional assurances for benefits and
payments due under the Excess Benefit Retirement Plan, the Supplemental Plan,
the Officer Agreements, the 1991 Executive Life Program and the 1996 Executive
Life Plan, pursuant to which Oglebay Norton pays life insurance premiums on
behalf of its executive officers.
The Oglebay Norton Company Pour-Over Trust ("Pour-Over Trust") provides
that in the event of a threatened Change in Control, Oglebay Norton shall
deposit in the Pour-Over Trust, on an irrevocable basis, 125% of the aggregate
unfunded obligations of such Benefit Plans subject to Trust I and Trust II. The
Pour-Over Trust becomes revocable if, following the threat, no Change in Control
occurs. If a Change in Control does occur, the Pour-Over Trust remains
irrevocable, and the assets in the Pour-Over Trust are transferred to Trusts I
and II. Although Oglebay Norton has contributed certain company-owned life
insurance policies to the trust held under Trust I, it has not contributed
significant assets to any of the three trusts, although Oglebay Norton has the
right to make additional discretionary contributions into the trusts. Assets
held in the trusts are subject at all times to claims of Oglebay Norton's
general creditors. If funds in the trusts are insufficient to pay amounts due
under a plan or agreement, Oglebay Norton remains obligated to pay those
amounts. No employee has any right to assets in the trusts until and to the
extent benefits are paid from the trusts.
LONG-TERM INCENTIVE PLAN
Oglebay Norton established its Long-Term Incentive Plan ("LTIP") on
December 18, 1995, which was approved by Stockholders at the 1996 Annual
Meeting. The Compensation Subcommittee administers the LTIP and selects those
officers and other key employees to participate in the plan. Participants are
eligible to defer a portion of their annual incentive award or are eligible to
be granted awards under the LTIP, as determined by the Compensation
Subcommittee. Each of the named executive officers currently participates in the
LTIP. During
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<PAGE> 47
years 1995 through 1997, the LTIP consisted of two programs, the "Annual
Incentive Deferral Program" and the "Long-Term Incentive Program." The Annual
Incentive Deferral Program will not be in effect for compensation earned in 1998
and thereafter.
Under the Annual Incentive Deferral Program, each participant is able to
defer all or a portion (as determined by the Compensation Subcommittee) of any
incentive award payable under Oglebay Norton's Annual Incentive Plan. The
deferred amounts are converted into "share units" based upon the fair market
value of the shares of Common Stock of Oglebay Norton on the date of deferral.
Oglebay Norton will make a matching contribution to the participant's deferred
incentive award in an amount determined by the Compensation Subcommittee. For
amounts deferred for 1997, Oglebay Norton's match was 50% of the portion of each
participant's annual incentive award for 1997. An amount equal to dividends paid
on the shares of Common Stock of Oglebay Norton is also credited to the
participant's deferral account and Oglebay Norton match and is also converted
into share units based upon the fair market value of the shares of Common Stock
of Oglebay Norton on the dividend payment date. All annual incentive award
deferrals (and related dividends) are one hundred percent (100%) vested at all
times. Matching contributions (and related dividends) are 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 Oglebay Norton 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 defined in the
LTIP). All distributions under the LTIP are made in shares of Common Stock of
Oglebay Norton. Distributions of vested amounts are made upon a participant's
retirement, death or other termination of employment, upon a "Change in Control"
(as defined in the LTIP), or upon any other event deemed appropriate by the
Compensation Subcommittee. A participant may elect an in-service withdrawal 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 the withdrawal. However, upon
taking such an in-service withdrawal, all of the participant's matching
contributions are immediately forfeited. As noted above, the Annual Incentive
Deferral Program of the LTIP is no longer in effect for compensation earned in
1998 and thereafter.
The LTIP also provides for awards by the Compensation Subcommittee,
including a 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
(collectively, the "Incentive Awards"). The Compensation Subcommittee has the
discretion to set performance objectives as it deems appropriate respecting any
performance awards or restricted stock grants. The 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 Compensation Subcommittee may deem appropriate. As discussed
above under the heading "COMPENSATION OF EXECUTIVE OFFICERS -- Stock Option
Grants in 1997," on October 29, 1997, Oglebay Norton granted stock options to
certain of its executive officers and key employees under the LTIP.
The Compensation Subcommittee also has the authority, in its discretion, to
provide at the time of grant of any award under the LTIP, that the terms of the
grant or date on which an award vests or becomes exercisable may be modified in
the event of a change of control, as defined under the LTIP.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Malvin E. Bank, formerly a member of the Compensation and Organization
Committee of Oglebay Norton, is a partner of the law firm of Thompson Hine &
Flory LLP, Cleveland, Ohio, which provided legal services to Oglebay Norton in
1997 and continues to provide such services in 1998. Mr. Bank has not served on
the Compensation and Organization Committee since April 30, 1997.
Mr. Bersticker serves on the Compensation and Organization Committee of
Oglebay Norton, and is the Chairman and Chief Executive Officer of Ferro
Corporation. As is discussed in the immediately following section, a
wholly-owned subsidiary of Oglebay Norton sells to, and purchases from, Ferro
Corporation various
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<PAGE> 48
items in the ordinary course of business pursuant to arm's length negotiations.
Mr. Bersticker is not a member of the Compensation Subcommittee.
RELATED PARTY TRANSACTIONS
Oglebay Norton Industrial Sands, Inc. ("ONIS"), a wholly-owned subsidiary
of Oglebay Norton, sells ground silica to, and purchases heavy density grinding
media and ceramic mill lining from, Ferro Corporation. Mr. Bersticker is
Chairman of the Board and Chief Executive Officer of Ferro Corporation. During
the year ended December 31, 1997, total sales to and purchases from Ferro
Corporation by ONIS were $627,603 and $528,067, respectively. These transactions
were entered into by ONIS pursuant to arm's length negotiations in the ordinary
course of business and on terms that Oglebay Norton believes to be fair.
LEGAL OPINION
The legality of the Common Shares of the Holding Company will be passed
upon by Thompson Hine & Flory LLP, Cleveland, Ohio, legal counsel to Oglebay
Norton. Several partners of Thompson Hine & Flory LLP own shares of Common Stock
of Oglebay Norton. Information on the share ownership of Malvin E. Bank, who is
a director of Oglebay Norton, and Douglas N. Barr is set forth above under the
heading "BENEFICIAL OWNERSHIP OF COMMON STOCK OF OGLEBAY NORTON." Other partners
of Thompson Hine & Flory LLP have advised Oglebay Norton that they own an
aggregate of approximately [500] shares of Common Stock of Oglebay Norton.
EXPERTS
The consolidated financial statements of Oglebay Norton appearing in
Oglebay Norton's Annual Report on Form 10-K for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
Deloitte & Touche LLP has delivered an opinion to Oglebay Norton regarding
the federal income tax consequences of the reorganization described herein.
Deloitte & Touche LLP was selected by Oglebay Norton, and is qualified to
deliver such opinion, based upon the authority of such firm as experts in tax
matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the records and information of Oglebay Norton, Oglebay Norton
believes that all Securities and Exchange Commission filing requirements
applicable to directors and executive officers under Section 16(a) of the
Securities Exchange Act of 1934, as amended, for 1997 were met.
INDEPENDENT AUDITORS
A representative of Ernst & Young LLP, the independent auditor of Oglebay
Norton for the year ended December 31, 1997, is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if the
representative desires to do so and to respond to appropriate questions with
respect to the firm's examination of the consolidated financial statements and
records of Oglebay Norton for the year ended December 31, 1997. The Board of
Directors of Oglebay Norton has not yet considered the appointment of
independent auditors for the year ending December 31, 1998.
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<PAGE> 49
FINANCIAL STATEMENTS
Oglebay Norton's Annual Report for the year ended December 31, 1997,
including financial statements for such year, accompanies this Proxy
Statement-Prospectus. Stockholders may obtain a copy of Oglebay Norton's Annual
Report on Form 10-K as filed with the Securities and Exchange Commission free of
charge upon oral or written request to the Secretary, Oglebay Norton Company,
1100 Superior Avenue, Cleveland, Ohio 44114-2598, Telephone Number (216)
861-3300.
1999 ANNUAL MEETING
The 1999 Annual Meeting of Stockholders of the Holding Company is presently
scheduled to be held on April 28, 1999. The deadline for stockholders to submit
proposals to be considered for inclusion in the proxy statement for that meeting
is November 25, 1998.
OTHER MATTERS
The management of Oglebay Norton does not know of any business to be acted
upon at the Annual Meeting other than the matters described above, but if any
other matter properly comes before the Annual Meeting, the persons named on the
enclosed proxy card will vote thereon in accordance with their best judgment.
Stockholders are urged to sign and return their proxies without delay.
By Order of the
Board of Directors
DAVID G. SLEZAK,
Secretary and Director
of Legal Affairs
March , 1998
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<PAGE> 50
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") is made as of
March , 1998, by and among Oglebay Norton Company, a Delaware corporation
("Oglebay Norton"), Oglebay Norton Holding Company, an Ohio corporation and
wholly-owned subsidiary of Oglebay Norton (the "Holding Company"), ONCO
Investment Company, an Ohio corporation and wholly-owned subsidiary of the
Holding Company (the "Investment Company"), and Oglebay Norton Merger Company, a
Delaware corporation and wholly-owned subsidiary of the Investment Company (the
"Merger Company").
WHEREAS, Oglebay Norton has an authorized capital stock consisting of
10,000,000 shares of Common Stock, $1.00 par value per share, of which
are issued and outstanding, and 5,000,000 shares of Preferred Stock,
without par value, none of which are issued and outstanding.
WHEREAS, the Investment Company has an authorized capital stock consisting
of one Common Share, $1.00 par value, which share is issued and outstanding and
is owned by the Holding Company.
WHEREAS, the Merger Company has an authorized capital stock consisting of
one share of Common Stock, $1.00 par value, which share is issued and
outstanding and is owned by the Investment Company.
WHEREAS, at the Effective Date (as defined below), the Holding Company will
have an authorized capital stock consisting of 30,000,000 Common Shares, $1.00
par value per share, of which one share is issued and outstanding and is owned
by Oglebay Norton, and 5,000,000 Preferred Shares, without par value, none of
which are issued and outstanding.
WHEREAS, the respective Boards of Directors of Oglebay Norton, the Holding
Company, the Investment Company and the Merger Company deem it advisable that
the Merger Company merge with and into Oglebay Norton upon the terms and
conditions herein provided and, therefore, have each approved and authorized
this Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree that in accordance with the Delaware
General Corporation Law (the "DGCL") the Merger Company shall be merged with and
into Oglebay Norton in accordance with the following terms and conditions.
1. The Merger. Effective upon the filing of this Merger Agreement or a
separate certificate of merger, in such form as is required by the DGCL, with
the Secretary of State of the State of Delaware (the "Effective Date"), the
Merger Company will be merged with and into Oglebay Norton in accordance with
the DGCL. As a result of the merger (the "Merger"), the separate existence of
the Merger Company will cease and Oglebay Norton will be the surviving
corporation (the "Surviving Company"). From and after the Effective Time, the
Merger will have the effects specified in the DGCL.
2. Conditions to the Merger. The obligations of Oglebay Norton, the
Holding Company, the Investment Company and the Merger Company to consummate the
Merger are subject to (a) the adoption of the Merger Agreement at the 1998
Annual Meeting of Stockholders of Oglebay Norton (the "Annual Meeting") by the
vote of the holders of at least two-thirds of the shares of Common Stock of
Oglebay Norton outstanding on the record date for the Annual Meeting and (b) the
receipt by Oglebay Norton of the consent to the Merger of the United States
Secretary of Transportation as and to the extent required by contracts relating
to the construction and chartering of vessels financed under Title XI of the
Merchant Marine Act of 1939.
3. Certificate of Incorporation and By-laws of the Surviving Company. The
Certificate of Incorporation of the Merger Company, as amended and in effect on
the Effective Date, shall be the Certificate of Incorporation of the Surviving
Company without change or amendment until further amended in accordance with the
provisions
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<PAGE> 51
thereof and applicable law, except that the first section of the Certificate of
Incorporation of the Surviving Company shall, as of the Effective Date, be
amended to read as follows:
FIRST. The name of the Corporation shall be "ONCO Transportation
Company."
The By-laws of the Merger Company, as amended and in effect on the
Effective Date, shall be the By-laws of the Surviving Company, without
change or amendment until further amended in accordance with the provisions
thereof and applicable law.
4. Articles of Incorporation and By-laws of the Holding Company. Article
FIRST of the Articles of Incorporation of the Holding Company shall, as of the
Effective Date, be amended to read as follows:
FIRST. The name of the Corporation shall be "Oglebay Norton Company."
5. Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, the directors and officers of the Merger Company immediately
prior to the Effective Time will be the directors and officers of the Surviving
Company after the consummation of the Merger.
6. Further Assurances. From time to time, as and when required by the
Surviving Company or by its successors and assigns, there shall be executed and
delivered on behalf of the Merger Company such deeds and other instruments, and
there shall be taken or caused to be taken by it such further actions, as shall
be appropriate or necessary in order to vest or perfect in or to confirm of
record or otherwise in the Surviving Company the title to and possession of all
the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of the Merger Company, and otherwise to carry out the
purposes of this Merger Agreement, and the officers and directors of the
Surviving Company are fully authorized in the name and on behalf of the Merger
Company or otherwise to take any and all such actions and to execute and deliver
any and all such deeds and other instruments.
7. Common Stock of Oglebay Norton. On the Effective Date, by virtue of the
Merger and without any action on the part of any holder thereof, each share of
Common Stock, $1.00 par value per share, of Oglebay Norton outstanding
immediately prior thereto shall be changed and converted into one fully paid and
nonassessable Common Share, $1.00 par value per share, of the Holding Company.
The conversion of these shares will occur by virtue of the Merger and without an
exchange of certificates, and each certificate representing shares of Common
Stock of Oglebay Norton issued and outstanding immediately prior to the Merger
will, upon completion of the Merger, represent Common Shares of the Holding
Company.
8. Common Stock of the Merger Company. On the Effective Date, by virtue of
the Merger and without any action on the part of the holder thereof, each share
of Common Stock, $1.00 par value per share, of the Merger Company outstanding
immediately prior thereto shall be changed and converted into one fully paid and
nonassessable share of Common Stock, $1.00 par value per share, of the Surviving
Company.
9. Common Shares of the Holding Company Owned by Oglebay Norton. On the
Effective Date, each Common Share of the Holding Company will be canceled, and
all rights in respect thereof will cease.
10. Stock Certificates. On and after the Effective Date, all of the
outstanding certificates that prior to that time represented shares of Common
Stock of Oglebay Norton shall be deemed for all purposes to evidence the same
number of Common Shares of the Holding Company. The registered owner on the
books and records of the Holding Company or its transfer agent of any such stock
certificate shall, until such certificate shall have been surrendered for
transfer or conversion or otherwise accounted for to the Holding Company or its
transfer agent, have and be entitled to exercise any voting and other rights
with respect to, and to receive any dividend and other distributions upon, the
shares of the Holding Company to which such person is entitled.
11. Abandonment. This Merger Agreement will terminate and the Merger will
be abandoned if the Merger Agreement is not adopted at the Annual Meeting by the
vote of the holders of at least two-thirds of the shares of Common Stock of
Oglebay Norton outstanding on the record date for the Annual Meeting. In
addition, at any
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time before the Effective Date, this Merger Agreement may be terminated and the
Merger may be abandoned at the election of the Board of Directors of Oglebay
Norton, whether before or after approval of this Merger Agreement by the
stockholders of Oglebay Norton, if the Board of Directors shall have determined
that the Merger is not in the best interest of Oglebay Norton or its
stockholders.
12. Amendment. This Merger Agreement may be amended at any time before the
Merger becomes effective in a written instrument approved in form and substance
by the Board of Directors of Oglebay Norton and executed by all of the parties
hereto. However, after the adoption of this Merger Agreement by the stockholders
of Oglebay Norton, this Merger Agreement may not be amended in a way that, in
the judgment of the Board of Directors of Oglebay Norton, materially and
adversely affects the rights of the stockholders of Oglebay Norton, unless the
Merger Agreement, as amended, is adopted by the holders of at least two-thirds
of the outstanding shares of Common Stock of Oglebay Norton entitled to vote
thereon.
13. Counterparts. This Merger Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to
be duly executed by their respective authorized officers as of the date first
written above.
OGLEBAY NORTON COMPANY
--------------------------------------
By:
Title:
OGLEBAY NORTON HOLDING COMPANY
--------------------------------------
By:
Title:
ONCO INVESTMENT COMPANY
--------------------------------------
By:
Title:
OGLEBAY NORTON MERGER COMPANY
--------------------------------------
By:
Title:
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<PAGE> 53
EXHIBIT B
ARTICLES OF INCORPORATION
OF
OGLEBAY NORTON HOLDING COMPANY
FIRST. The name of the Corporation is "Oglebay Norton Holding Company."
SECOND. The principal office of the Corporation in the State of Ohio is
located in the City of Cleveland, Cuyahoga County.
THIRD. The purpose or purposes for which the Corporation is formed is to
engage in any lawful act or activity for which corporation may be formed under
the Ohio General Corporation Law.
FOURTH. The total number of shares which the Corporation shall have
authority to issue is 15,000,000, of which 5,000,000 shall be Preferred Shares
without par value, and 10,000,000 shall be Common Shares with a par value of $1
per share. The Preferred Shares may be issued from time to time in one or more
series. To the extent permitted by the Ohio General Corporation Law, the Board
of Directors of the Corporation shall have the right, by resolution or
resolutions, to adopt amendments to these Articles of Incorporation in respect
of any unissued or treasury Preferred Shares and thereby to fix or change: the
division of such shares into series; the dividend or distribution rate; the
dates of payment dividends or distributions; whether dividends are cumulative
and, if so, the dates from which they are cumulative; the liquidation price; the
redemption rights and price; sinking fund requirements; conversion rights;
restrictions on the issuance of shares of any class or series; and any other
relative, participating, optional, or other special rights and privileges of,
and qualifications or restrictions on, the rights of holders of shares of any
class or series; provided, however, that (i) the aggregate number of Common
Shares into which all of the Preferred Shares shall at any time be convertible
shall not exceed 5,000,000, subject to appropriate adjustment in the event of
any stock dividend, stock split-up, or other change in the Common Shares; and
(ii) the price at which Preferred Shares of any series shall at any time be
convertible into Common Shares shall be not less than the fair market value, as
determined by the directors, of the Common Shares on the date on which the
conversion rights of the Preferred Shares of such series are fixed by resolution
or resolutions adopted by the Board of Directors, subject to appropriate
adjustment in the event of any stock dividend, stock split-up, or other change
in the Common Shares. All Preferred Shares of any series issued at different
times may differ as to the dates of issue and the dates from which dividends
thereon shall accumulate.
DIVISION A
EXPRESS TERMS
OF
SERIES C $10 PREFERRED STOCK
There is hereby established a series of Preferred Shares; the designation,
number, voting powers, preferences and rights and the qualifications,
limitation, or restrictions thereof are as follows:
SECTION 1. DESIGNATION. The shares of such series are designated as
the "Series C $10.00 Preferred Stock" (the "Series C Preferred Stock").
SECTION 2. AUTHORIZED NUMBER OF SHARES. Fractional Shares. The
authorized number of shares constituting the Series C Preferred Stock is
300,000. Series C Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of
Series C Preferred Stock.
SECTION 3. DIVIDENDS AND DISTRIBUTIONS. (a) Subject to any prior and
superior rights of the holders of any series of Preferred Shares ranking
prior and superior to the shares of Series C Preferred Stock with respect
to dividends that may be authorized by the Restated Certificate of
Incorporation, the holders of
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shares of Series C Preferred Stock shall be entitled prior to the payment
of any dividends on shares ranking junior to the Series C Preferred Stock
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series C Preferred Stock, in
an amount per share (rounded by the nearest cent) equal to the greater of
(a) $1,000 or (b) subject to the provisions for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (other than a dividend payable in Common
Shares or a subdivision of the outstanding Common Shares, by
reclassification or otherwise), declared on the Common Shares since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series C Preferred Stock. In the event the
Corporation shall at any time after August 26, 1987 (the "Rights
Declaration Date") (i) declare any dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, then
in each such case the amount to which holders of shares of Series C
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or distribution on the
Series C Preferred Stock as provided in paragraph (a) above immediately
after it declares a dividend or distribution on the Common Shares (other
than a dividend payable in Common Shares); provided that, in the event no
dividend or distribution shall have been declared on the Common Shares
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share
on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series C Preferred
Stock, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
C Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date.
(d) Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series C Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series C Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 60 days prior to the date fixed for
the payment thereof.
(e) Dividends in full shall not be declared or paid or set apart for
payment on the Series C Preferred Stock for a dividend period terminating
on the Quarterly Dividend Payment Date unless dividends in full have been
declared or paid or set apart for payment on the Preferred Shares of all
series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective
dividend periods terminating on such dividend date. When the dividends are
not paid in full on all series of the Preferred Shares, the shares of all
series shall share ratably in the payment of dividends, including
accumulations, if any, in accordance with the sums which would be payable
on such shares if all dividends were declared and paid in full.
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SECTION 4. LIQUIDATION, DISSOLUTION OR WINDING UP. (a) Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $10.00 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series C Liquidation
Preference"). Following the payment of the full amount of the Series C
Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series C Preferred Stock unless, prior thereto, the
holders of Common Shares shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Series C Liquidation Preference by (ii) 100 (as appropriately adjusted in
accordance with subparagraph (c) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common
Shares) (such number in clause (ii) is hereinafter referred to as the
"Adjustment Number"). Following the payment of the full amount of the
Series C Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Preferred Stock and Common Shares,
respectively, holders of Series C Preferred Stock and holders of Common
Shares shall receive their ratable and proportionate share, on a per share
basis of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to the Series C Preferred Stock and
Common Shares, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series C Liquidation Preference
and the liquidation preferences of all other series of Preferred Shares, if
any, which rank on a parity with the Series C Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall
be distributed ratably to the holders of Common Shares.
(c) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
SECTION 5. CONVERSION ON MERGER, CONSOLIDATION, ETC. In case the
Corporation shall enter into any merger, consolidation, combination or
other transaction in which Common Shares are exchanged or changed into
other shares or securities, cash and/or any other property, then in any
such case each share of Series C Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of shares, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each Common
Share is changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
SECTION 6. REDEMPTION. The outstanding shares of Series C Preferred
Stock shall not be redeemable.
SECTION 7. VOTING RIGHTS. Each holder of shares of Series C Preferred
Stock shall be entitled to one hundred votes for each share held, and
except as otherwise by law provided, the holders of Series C Preferred
Stock and the holders of Common Shares shall vote together as one class.
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<PAGE> 56
SECTION 8. CONDITION TO ISSUANCE OF ANY OTHER SERIES. The Articles of
Incorporation of the Corporation shall not be further amended to provide
for the issuance of any other series of Preferred Shares without the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of Series C Preferred Stock, voting separately as one voting group.
FIFTH. The existence of the Corporation shall be perpetual.
SIXTH. The private property of the shareholders of the Corporation shall
not be subject to the payment of corporate debts to any extent whatever.
SEVENTH. Provisions for the management of the business and conduct of the
affairs of the Corporation, and to define and regulate the powers of the
Corporation, the directors and the shareholders, are as follows:
(a) The number of directors of the Corporation shall be fixed from
time to time as may be provided in its Regulations, but shall never be less
than three. In the case of an increase in the number of directors at any
time, the additional directors may be elected by the directors then in
office, unless otherwise provided in the Regulations. At each annual
meeting of shareholders, successors to the class of directors whose term
expires at the annual meeting shall be elected for a three-year term. The
number of directors in each of these classes shall be fixed or changed as
may be provided in the Regulations.
Notwithstanding the foregoing, whenever the holders of any class or
series of Preferred Shares issued by the Corporation has the right, voting
separately by class or series, to elect directors at an annual or special
meeting of shareholders, the election, classification, term of office,
filling of vacancies, and other features of such directorships shall be
governed by the terms of such Preferred Shares.
(b) The Board of Directors may from time to time determine whether and
to what extent and at what times and places and under what conditions and
regulations the accounts and books of the Corporation shall be open to the
inspection of the shareholders, and no shareholder shall have any right to
inspect any document, book, or account of the Corporation, except as
conferred by law, unless authorized by resolution of the Board of
Directors.
(c) The shareholders and directors shall have power, if the
Regulations so provide, to hold their meetings and to have one or more
offices within or without the State of Ohio and, subject to the provisions
of the laws of Ohio, to keep the books, documents, and papers of the
Corporation outside the State of Ohio at such places as may be from time to
time designated by the Board of Directors.
(d)(1) The Corporation shall indemnify, to the full extent then
permitted by law, any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, by
reason of the fact the he or she is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee, or agent of another corporation,
partnership, limited liability company, joint venture, trust, or other
enterprise. The Corporation shall pay, to the full extent then required by
law, expenses, including attorney's fees, incurred by a director in
defending any such action, suit, or proceeding as they are incurred, in
advance of the disposition thereof, upon receipt of any undertaking then
required by law. The Corporation may, in its discretion, indemnify and
other person, or advance expenses to any other person, in the same manner
and to the full extent then permitted by law. Notwithstanding the
foregoing, except as provided in Subsection (2) hereof, the Corporation
shall indemnify or advance expenses to any person in connection with a
proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
(d)(2) If a claim under Subsection (1) is not paid in full by the
Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required undertaking, if any is required, has been
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tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Ohio General Corporation Law
for the Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel, or its shareholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the Ohio General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its shareholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable
standard of conduct.
(d)(3) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition
conferred in this subparagraph (d) shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Regulations, agreement, vote of
shareholders or disinterested directors, or otherwise.
(d)(4) The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, or employee of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee, or agent of another corporation,
partnership, limited liability company, joint venture, trust, or other
enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as
such, whether or not the Corporation would have the power to indemnify him
or her against such liability under the provisions of this subparagraph (d)
or of the Ohio General Corporation Law.
(e) The Corporation may in its Regulations confer powers upon its
directors in addition to those conferred herein and in addition to the
powers and authorities expressly conferred upon them by statute.
(f) No shareholder of the Corporation shall have any pre-emptive right
to subscribe for any additional issues of shares of the Corporation.
EIGHTH. The affirmative vote of the holders of shares entitling them to
exercise at least two-thirds of the voting power of the Corporation shall be
required:
(a) To approve (1) the merger of the Corporation into or its
consolidation with another corporation, or (2) the merger into the
Corporation of another corporation, if under the Ohio General Corporation
Law, the affirmative vote of holders of shares would be required to effect
the merger, or (3) the sale, lease, exchange, or other disposition by the
Corporation of all, or substantially all, of its property and assets to
another corporation; or
(b) To approve any agreement, contract, or other arrangement providing
for any of the transactions described in subparagraph (a) above.
No amendment to the Articles of Incorporation of the Corporation shall
amend, alter, change, or repeal any of the provisions of this Article
EIGHTH, unless the amendment effecting such amendment, alteration, change,
or repeal shall receive the affirmative vote or consent of the holders of
share entitling them to exercise at least two-thirds of the voting power of
the Corporation.
NINTH. (A) VOTING REQUIREMENT FOR CERTAIN BUSINESS COMBINATIONS. Unless
both the fair price requirement set forth in the subparagraph (a) and the other
conditions set forth in subparagraph (c) below have been satisfied, the
affirmative vote of the holders of 75% of all outstanding shares of the
Corporation entitled to vote in elections of directors, voting together as a
single class, shall be required for the authorization or approval of any of the
following transactions:
(a)(1) The merger or consolidation of the Corporation or any of its
subsidiaries with or into an interested shareholder (as hereinafter
defined).
(a)(2) The sale, lease, pledge, or other disposition, in one
transaction or in a series of transactions, from the Corporation or any of
its subsidiaries to an interested shareholder, or from an interested
shareholder to
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the Corporation or any of its subsidiaries, of assets having an aggregate
fair market value (as hereinafter defined) equal to or exceeding 20% of the
fair market value, as determined by the continuing directors (as
hereinafter defined), of the consolidated assets of the Corporation and its
subsidiaries.
(a)(3) The issuance, sale, or other transfer, in one transaction or in
a series of transactions, by the Corporation or any of its subsidiaries to
an interested shareholder, or by an interested shareholder to the
Corporation or any of its subsidiaries, of securities for cash or other
consideration having an aggregate fair market value equal to or exceeding
20% of the fair market value, as determined by the continuing directors, of
the consolidated assets of the Corporation and its subsidiaries.
(a)(4) The liquidation or dissolution of the Corporation proposed by
an interested shareholder.
(a)(5) The reclassification of securities, recapitalization of the
Corporation, or other transaction that has the effect of increasing the
proportionate share of any class or series of outstanding securities of the
Corporation or any of its subsidiaries beneficially owned (as hereinafter
defined) by an interested shareholder or of otherwise diluting the position
of any shareholder of the Corporation in comparison with the position of an
interested shareholder.
(a)(6) Any other transaction or series of transactions that is similar
in purpose or effect to those referred to in subsections (1) through (5) of
this subparagraph (a).
This voting requirement shall apply even though no vote, or a lesser
percentage vote, may be required by law, by any other provision of these
Articles of Incorporation, or otherwise. The term "business combination,"
as used in this Article, means any of the transactions referred to in
subsections (1) through (6) of this subparagraph (a).
(b) FAIR PRICE REQUIREMENT. The fair price requirement will be
satisfied if the consideration to be received in the business combination
by the holders of Common Shares or Preferred Shares, and by the Corporation
or any of its subsidiaries, as the case may be, meets the following tests:
(b)(1) If any holder of the Common Shares or Preferred Shares,
other than an interested shareholder, is to receive consideration in the
business combination for any of the shares, the aggregate amount of cash
and fair market value of any other consideration to be received per
share may not be less than the sum of --
(i) the greater of (A) the highest per share price, including
commissions, paid by the interested shareholder for any shares of the
same class or series during the two-year period ending on the date of
the most recent purchase by the interested shareholder of any shares
of the same class or series, (B) the highest per share sales price
reported for shares of the same class or series traded on a national
securities exchange or in the over-the-counter market during the
one-year period preceding the first public announcement of the
proposed business transaction, or (C) in the case of Preferred
Shares, the amount of the per share liquidation preference; plus
(ii) interest on the per share price calculated at the rate
payable by the Corporation under its principal credit facility on the
date on which the interested shareholder became an interested
shareholder, compounded annually from that date until the business
combination is consummated, less the per share amount of cash
dividends payable to holders of record on record dates from that date
until the business combination is consummated, up to the amount of
such interest.
For purposes of this subsection (1), per share amounts will be
adjusted for any stock dividend, stock split, or similar transaction.
(b)(2) The consideration to be received by holders of the Common
Shares or Preferred Shares must be paid in cash or in the same form as
was previously paid by the interested shareholder for shares of the same
class or series; if the interested shareholder previously paid for such
shares with different forms of consideration, the consideration to be
received by the holders of the shares must be in cash or in the same
form as was paid by the interested shareholder for the greatest number
of shares previously acquired by it. The provisions of this subsection
(2) are not intended to diminish the aggregate amount
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of cash and fair market value of any other consideration that any holder
of the Common Shares or Preferred Shares is otherwise entitled to
receive upon the liquidation or dissolution of the Corporation, under
the terms of any contract with the Corporation or an interested
shareholder, or otherwise.
If the Corporation or any of its subsidiaries is to receive
consideration in the business combination, the consideration to be
received must be fair to the Corporation or its subsidiaries, as
determined by the continuing directors.
(c) OTHER CONDITIONS. The other conditions will be satisfied if, from
the time the interested shareholder became an interested shareholder until
the completion of the business combination, each of the following has at
all times been and continues to be true:
(c)(1) The Corporation's Board of Directors has included at least a
majority of continuing directors. The term "continuing director," as
used in this Article NINTH, means an individual who (i) either was a
director of the Corporation at the time the interested shareholder
became an interested shareholder or whose nomination was subsequently
approved by the other continuing directors and (ii) is not an affiliate
or associate (as hereinafter defined) of the interested shareholder. All
actions required or permitted to be taken by the continuing directors
under this Article NINTH shall be taken by the unanimous written consent
of all continuing directors or by the vote of a majority of the
continuing directors then in office at a meeting convened upon such
notice as would be required for a meeting of the full Board of
Directors.
(c)(2) The interested shareholder has not become the beneficial
owner (as hereinafter defined) of any additional Common Shares or
Preferred Shares, except (i) as part of the transaction that resulted in
the interested shareholder becoming an interested shareholder, (ii) upon
conversion of securities previously acquired by it, or (iii) pursuant to
a stock dividend or stock split.
(c)(3) The interested shareholder has not received, directly or
indirectly, the benefit (except proportionately as a shareholder) of any
loan, advance, guaranty, pledge, or other financial assistance, tax
credit or deduction, or other benefit from the Corporation or any of its
subsidiaries.
(c)(4) A proxy or information statement describing the business
combination and complying with the requirements of the Securities and
Exchange Act of 1934, as amended, and the rules and regulations under it
(or any subsequent provisions replacing that Act and the rules and
regulations under it) has been mailed at least 30 days prior to the
completion of the business combination to the holders of all shares of
the Corporation entitled to vote in elections of directors, whether or
not shareholder approval of the business combination is required. If
deemed advisable by the continuing directors, the proxy or information
statement shall contain a recommendation by the continuing directors as
to the advisability (or inadvisability) of the business combination or
an opinion by an investment banking firm, selected by the continuing
directors and retained at the expense of the Corporation, as to the
fairness (or unfairness) of the business combination to holders of
Common Shares or Preferred Shares other than the interested shareholder.
(c)(5) Except to the extent approved by the continuing directors,
there has been no (i) failure to pay in full, when and as due, any
dividends on the Preferred Shares or (ii) failure to pay or reduction in
the annual rate of dividends on the Common Shares, whether directly or
indirectly through a reclassification, recapitalization, or otherwise.
(c)(6) Except to the extent approved by the continuing directors,
there has been no material change in (i) the nature of the business
conducted by the Corporation and its subsidiaries or (ii) the capital
structure of the Corporation, including but not limited to any change in
the number of outstanding Common Shares, the number and series of any
outstanding Preferred Shares, and the types and aggregate principal
amount of any outstanding debt securities, except for changes resulting
from the exercise of previously issued options, warrants, or other
rights, the conversion of previously issued shares or other instruments,
the issuance of previously authorized debt securities, or the mandatory
redemption or retirement of debt securities in accordance with their
terms.
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(d) DEFINITIONS. As used in this Article NINTH:
(d)(1) "AFFILIATE" and "ASSOCIATES". The terms "affiliate" and
"associate" have the meanings ascribed to them in Rule 12b-2 of the
General Rules and Regulations under the Securities and Exchange Act of
1934, as amended, as in effect on May 4, 1983.
(d)(2) "BENEFICIAL OWNERSHIP". A person or entity is deemed to
"beneficially own" shares if, directly or indirectly through any
contract, understanding, arrangement, relationship, or otherwise, that
person or entity has or shares (i) the power to vote or to dispose of,
or to direct the voting or disposition of, the shares or (ii) the right
to acquire the shares pursuant to any contract or arrangement, upon the
exercise of any option, warrant, or right, upon the conversion of any
shares or other instrument, upon revocation of a trust, or otherwise.
The person or entity is also deemed to "beneficially own" shares that
are beneficially owned by affiliates and associates of that person or
entity.
(d)(3) "BUSINESS COMBINATION". The term "business combination" has
the meaning ascribed to it in subparagraph (a) of this Article NINTH.
(d)(4) "CONTINUING DIRECTORS". The term "continuing directors" has
the meaning ascribed to it in subsection (1) of subparagraph (c) of this
Article NINTH.
(d)(5) "FAIR MARKET VALUE". The term "fair market value" means,
(i) in the case of securities listed on a national securities exchange
or quoted in the National Association of Securities Dealers Automated
Quotation Systems (NASDAQ), the highest sales price reported for
securities of the same class or series traded on the national securities
exchange or in the over-the-counter market during the preceding 30-day
period, or if no such report or quotation is available, the value
determined by the continuing directors, and (ii) in the case of other
securities and of consideration or assets other than securities or cash,
the value determined by the continuing directors.
(d)(6) "INTERESTED SHAREHOLDER". The term "interested shareholder"
means any person or entity that, together with its affiliates and
associates, is at the time of, or has been within the two-year period
immediately prior to, the consummation of a business combination the
beneficial owner of shares having at least 25% of the aggregate voting
power of all outstanding shares of the Corporation entitled to vote in
elections of directors. The term "interested shareholder," for purposes
of the requirements and conditions of this Article NINTH, also includes
the affiliates and associates of the interested shareholder.
Notwithstanding the foregoing, the Corporation and its subsidiaries, and
any profit-sharing, employee stock ownership, employee pension, or other
employee benefit plan of the Corporation or any subsidiary, are not
deemed to be "interested shareholders."
(e) Nothing contained in this Article NINTH shall be construed to
relieve any interested shareholder from any fiduciary obligations
imposed by law.
(f) Notwithstanding any other provision of these Articles of
Incorporation or the Regulations of the Corporation (and notwithstanding
the fact that a lesser percentage may be required by law, these Articles
of Incorporation, or the Regulations), the affirmative vote of the
holders of 75% of the outstanding shares of the Corporation entitled to
vote in elections of directors, voting together as a single class, shall
be required to amend or repeal, or adopt any provisions inconsistent
with, this Article NINTH.
TENTH. (A) FOREIGN OWNERSHIP OF SHARES, ETC.
(a)(1) Notwithstanding anything to the contrary in these Articles of
Incorporation, it is the policy of the Corporation that, consistent with
law, Foreigners shall not own or control more than the Permitted Percentage
of the shares of any class of the Corporation at any time outstanding, and,
if Foreigners nevertheless at any time do own more than the Permitted
Percentage of such shares, shares owned by Foreigners may be purchased by
the Corporation, or the voting and the dividend and other distribution
rights of shares owned by Foreigners may be suspended, and the issuance of
stock certificates and the transfer of share ownership on the books of
register of the Corporation to Foreigners may be denied, all to the extent
necessary to prevent the loss by the Corporation (or any Subsidiary or
Controlled Person) of, or to reinstate,
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its right to be a United States Maritime Company or to have any license or
franchise from a governmental agency that is conditioned upon some or all
of the holders of shares of the Corporation possessing prescribed
qualifications.
(a)(2) The Board of Directors is generally authorized to adopt all
such rules and resolutions and to take any and all other lawful measures
reasonably necessary, appropriate, or desirable to carry out the policy set
forth in subparagraph (a)(1).
(a)(3) Without in any way limiting the general powers and authority
set forth in subparagraph (a)(2), the Board of Directors is specifically
authorized to take any or all of the actions specified below and, in that
regard, is authorized to take all such action and make all such
determinations as it deems necessary, appropriate, or desirable and as are
in accordance with law and not inconsistent with this Article TENTH,
including making changes in any of the definitions contained in
subparagraph (i) to accord with changes in applicable law or the rules,
regulations, and practices of any relevant governmental agency.
(b) RESTRICTIONS ON TRANSFER. Any transfer, or attempted or purported
transfer, of any shares issued by the Corporation that would result in the
ownership by one or more Foreigners of an aggregate percentage of the
shares of any class of the Corporation in excess of the Permitted
Percentage shall, to the full extent permitted by law and for so long as
such excess exists, be ineffective as against the Corporation, and the
Corporation shall not recognize the purported transferee as a shareholder
of the Corporation for any purpose whatsoever except for the purpose of
making a further transfer to a person not a Foreigner and for purposes of
the purchase or redemption of such shares by the Corporation, effecting any
other remedy available to the Corporation, or otherwise carrying out the
provisions of this Article TENTH.
(c) NO VOTING RIGHTS; TEMPORARILY WITHHOLDING PAYMENTS OF DIVIDENDS
AND OTHER DISTRIBUTIONS. If at any time (including the time of any record
date) ownership by Foreigners of the outstanding shares of any class of the
Corporation is in excess of the Permitted Percentage, the Corporation may,
to the full extent permitted by law, determine which shares owned by
Foreigners are deemed to be included in such excess (to be selected in a
manner consistent with the provisions of Subsection (d)(3) below), and the
shares deemed to be included in such excess shall (so long as such excess
exists) not have any voting rights, and the Corporation may (so long as
such excess exists) temporarily withhold the payment of dividends and the
sharing in any other distribution (upon liquidation or otherwise) in
respect of the shares deemed to be included in such excess; provided,
however, that any such dividend or distribution shall be set aside for
payment to the owners of such shares (or their transferees) when, as, and
if such excess no longer exists or such shares are no longer owned by
Foreigners.
(d) REDEMPTION OF SHARES. Notwithstanding any other provision of
these Articles of Incorporation and without limiting the power of the Board
of Directors to purchase shares pursuant to subparagraph (f), outstanding
shares of any class of the Corporation shall be subject to redemption by
the Corporation (by action of the Board of Directors, if in the judgment of
the Board such action should be taken) pursuant to Section 1701.23 of the
Ohio General Corporation Law (or any other provision of law) to the extent
necessary to reduce the percentage of shares owned by Foreigners to the
Permitted Percentage. The terms and conditions of such redemption shall be
as follows:
(1) the redemption price shall be the Fair Market Value of such
shares;
(2) the redemption price for shares owned by Foreigners in excess
of the Permitted Percentage may be paid in cash or in Redemption
Securities, as determined by the Board of Directors;
(3) the shares owned by Foreigners to be redeemed shall be selected
in such manner as shall be prescribed by the Board of Directors,
including selection first of the shares most recently purchased,
selection by lot or on a pro rata basis, or selection in any other
manner that is consistent with the policy set forth in this Article
TENTH;
(4) the number of shares to be redeemed shall not exceed the number
necessary to reduce the percentage of shares owned by Foreigners to the
Permitted Percentage;
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(5) written notice of the date of redemption (the "Redemption
Date") shall be given to the record holders of the selected shares
(unless waived in writing by any such holder);
(6) the Redemption Date shall be the later of (i) the date on which
written notice is given to record holders and (ii) the date on which the
funds or Redemption Securities necessary to effect the redemption have
been deposited in trust for the benefit of such record holders and are
subject to immediate withdrawal by them upon surrender of their stock
certificates;
(7) from and after the Redemption Date, any and all rights in
respect of the shares selected for redemption shall cease and terminate,
and the owners of such shares shall thenceforth be entitled only to
receive the cash or Redemption Securities payable upon redemption; and
(8) such other terms and conditions as the Board of Directors may
reasonably determine.
(e) DUAL STOCK CERTIFICATE SYSTEM AND OTHER ACTIONS. The Board of
Directors is authorized to adopt rules and to take such other action as it
may deem necessary or desirable in order to carry out the policy set forth
in subparagraph (a)(1), to impose restrictions on the transfer or the
registration of transfer of shares of any class of the Corporation, in
accordance with law, and to determine whether outstanding shares of any
class of the Corporation are owned by Foreigners or by citizens of the
United States. Such restrictions may include a Dual Stock Certificate
System.
(f) PURCHASE OF SHARES BY THE CORPORATION. Without limiting the power
of the Board of Directors to redeem shares owned by Foreigners in
accordance with subparagraph (d) or generally to purchase outstanding
shares or other securities of the Corporation, the Board of Directors is
authorized, in carrying out the policy set forth in subparagraph (a)(1), to
cause the Corporation to purchase shares of any class of the Corporation
that are owned by Foreigners. Any such purchase may be carried out at such
price and under such other terms as the Board of Directors deems
appropriate and fair to the Corporation under the circumstances.
(g) OWNERSHIP. Whether outstanding shares are owned by Foreigners for
the purposes of this Article TENTH shall be determined under such rules and
resolutions, consistent with definitions of ownership under any applicable
law and the rules, regulations, and practices of any governmental agency
and not inconsistent with this Article TENTH, as may be adopted from time
to time by the Board of Directors. The Corporation may, in its discretion,
rely on the records of the Corporation maintained in accordance with a Dual
Stock Certificate System and the certificates of transferees or with
holders to prove that shares are or are not owned by a Foreigner. Whether
shares are or are not owned by Foreigners may also be subject to proof in
such other way or ways as the Corporation may deem reasonable. The
Corporation at any time may require proof, in addition to the
certification, that shares are or are not owned or are or are not applied
for by a Foreigner, and the payment of dividends may be withheld, and any
application for transfer of ownership on the books of register of the
Corporation may be rejected, until such additional proof is submitted.
(h) EFFECTIVENESS. This Article TENTH shall be effective only so long
as the Corporation or any Subsidiary or Controlled Person (a) is a United
States Maritime Company or has a license or franchise from a governmental
agency that is conditioned upon one or all of the holders of shares of the
Corporation possessing prescribed qualifications or (b) intends to
reinstate itself as a United States Maritime Company, or to reinstate any
such license or franchise, within a reasonable time, after ceasing to be or
hold the same.
(i) DEFINITIONS.
(i)(1) "FAIR MARKET VALUE" of a share of any class of the
Corporation on any particular date shall mean the average (unweighted)
closing price for such a share on the New York Stock Exchange for each
of the 45 trading days on which shares of such class have been traded
preceding the day on which notice of a redemption is given pursuant to
subparagraph (d)(5), except that if such class is not traded on the New
York Stock Exchange, then such closing price for each of the 45 trading
days shall be those listed on any other national security exchange on
which shares of such class are listed, and if not listed on any national
security exchange, the last sale price for each of the 45 trading days
as quoted in the NASDAQ National Market System, and if not quoted in the
NASDAQ National Market System, the
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mean between the representative bid and asked prices on each of the 45
trading days as quoted by NASDAQ or another generally recognized
reporting system.
(i)(2) "SUBSIDIARY" shall mean any corporation more than 50% of the
outstanding shares of which are owned by the Corporation or by any
Subsidiary of the Corporation.
(i)(3) "FOREIGNER" shall mean (a) any person (including for
purposes of this subparagraph (i) an individual, a partnership, a
corporation, or an association) that is not a United States citizen or
is the representative of or fiduciary for any person that is not a
United States citizen; (b) any foreign government or the representative
thereof; (c) any corporation the president, chief executive officer, or
chairman of the board of directors of which is a Foreigner, or of which
more than a minority cf its directors necessary to constitute a quorum
are Foreigners; (d) any corporation organized under the laws of any
foreign government; (e) any corporation of which a majority of its
shares are owned beneficially or of record, or may be voted by,
Foreigners, or which by any other means whatsoever is controlled by or
in which control is permitted to be exercised by Foreigners; (f) any
partnership or association which is controlled by Foreigners; (g) any
corporation of which a 25% or greater interest is owned beneficially or
of record by Foreigners and which may be deemed to "control" the
Corporation (the Board of Directors being authorized to determine
reasonably the meaning of "control" for this purpose); (h) any other
person deemed by the Board of Directors to be a Foreigner as to the
United States or the Corporation (or any Subsidiary) or otherwise not
possessing prescribed qualifications to be a holder of outstanding
shares of the Corporation in accordance with the policy set forth in
subparagraph (a)(1); or (i) any person who acts as representative of or
fiduciary for any person described in clauses (a) through (h) above.
(i)(4) "PERMITTED PERCENTAGE" shall mean the lesser of the
following percentages of the outstanding shares of any class of the
Corporation: (i) so long as the Corporation (or any Subsidiary or
Controlled Person) operates vessels in the United States coastwise,
intercoastal, or noncontiguous domestic trade, 25%; and (ii) so long as
the Corporation (or any Subsidiary or Controlled Person) shall have a
license or franchise from a governmental agency to conduct its business
which is conditioned upon some of the holders of shares of the
Corporation possessing prescribed qualifications, the percentage
prescribed by law to possess or operate under such license or franchise;
except that the Board of Directors may reduce the lesser of the
foregoing percentages by not more than 2-1/2% in the event that the
Board determines that a reasonable margin in the amount of such
reduction is desirable, in which case "Permitted Percentage" shall mean
the lesser of such percentages reduced by such margin.
(i)(5) "REDEMPTION SECURITIES" shall mean interest bearing
promissory notes of the Corporation with a maturity of not more than 10
years from the date of issue and bearing interest at a rate, and having
other terms, designed to ensure that the value of the promissory note at
the date of issue is equivalent to the redemption price.
(i)(6) "DUAL STOCK CERTIFICATE SYSTEM" means a system under which
(i) one of two different forms of stock certificate, representing
outstanding shares of any class of the Corporation, is issued to the
holders of record dependent on whether the shares are or are not owned
by a Foreigner; (ii) the forms of stock certificate for any class of the
Corporation are marked "Foreign" for shares owned by Foreigners or
"Domestic" for shares not owned by Foreigners but are identical in all
other respects and comply with all provisions of the Ohio General
Corporation Law (including Section 1701.23 thereof with respect to
restrictions on transfer or registration of transfer); (iii) when, as,
and if the Permitted Percentage is reached or exceeded for any class of
shares and until the percentage of the class owned by Foreigners has
been reduced to or below the Permitted Percentage, no additional
"Foreign" stock certificates may be issued for the class to any
transferee of the holder of a "Domestic" stock certificate and the
Corporation will not recognize any such transferee as an owner of shares
of the Corporation for any purpose whatsoever; (iv) a certification is
required from any transferee (and from any recipient upon original
issuance) of shares of the Corporation as to whether such transferee (or
recipient), and if such transferee (or recipient) is acting as nominee
or in any other capacity for an owner, such owner, is
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or is not a Foreigner and registration of transfer (or original
issuance) is denied upon refusal to furnish such certification; (v) to
the extent necessary to enable the Corporation to determine the
percentage of any class of outstanding shares of the Corporation that is
owned by Foreigners for the purpose of submitting any proof of
citizenship required by law or by contract with the United States
government (or any agency thereof), the record holders and the owners of
such shares may be required from time to time to confirm their
citizenship status, and dividends payable to any such record holder and
owner may, in the discretion of the Board of Directors, be temporarily
withheld until confirmation of such citizenship status is received; and
(vi) the records of the Corporation are maintained in such manner as to
enable determination at any time, as to each class of outstanding shares
of the Corporation, of the percentage that is owned by Foreigners and
the percentage that is owned by United States citizens.
(i)(7) "CONTROLLED PERSON" means any corporation or partnership of
which the Corporation or any subsidiary owns or controls an interest in
excess of 25%.
(i)(8) "UNITED STATES MARITIME COMPANY" means any corporation or
other entity which, directly or indirectly, (i) owns or operates vessels
in the United States coastwise trade, intercoastal trade, or
non-contiguous domestic trade, (ii) owns, charters, sub-charters, or
leases any vessel the costs of construction, renovation, or
reconstruction of which have been financed, in whole or in part, by
obligations insured or guaranteed under Title XI of the Merchant Marine
Act of 1936, as amended, (iii) conducts any activity, takes any action,
or receives any benefit that would be adversely affected under any
provision of the United States maritime, shipping, or vessel
documentation laws because of the ownership by Foreigners of its shares,
or (iv) maintains a Capital Construction Fund under the provisions of
Section 807 of the Merchant Marine Act of 1936, as amended.
ELEVENTH. Except as expressly provided in these Articles of Incorporation,
all actions that would otherwise require the affirmative vote of the holders of
shares entitling them to exercise two-thirds of the voting power of the
Corporation on such proposal may be taken with the affirmative vote of the
holders of a majority of such voting power.
TWELFTH. The Corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation of the
Corporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon shareholders are granted subject to this reservation.
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EXHIBIT C
REGULATIONS
OF
OGLEBAY NORTON HOLDING COMPANY
<PAGE> 66
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER SUBJECT NUMBER
- ------- ------- ------
<C> <S> <C>
OFFICES
1. Offices..................................................... 1
SEAL
2. Seal........................................................ 1
SHAREHOLDERS' MEETINGS
3. Place of meetings........................................... 1
4. Annual meeting.............................................. 1
5. Quorum...................................................... 1
6. Voting...................................................... 2
7. Notice of annual meeting.................................... 2
8. Shareholders' list.......................................... 2
9. Special meetings............................................ 2
10. Business transacted at special meetings..................... 2
11. Notice of special meetings.................................. 3
DIRECTORS
12. Number; election; qualifications; term of office............ 3
13. Powers and authorities...................................... 3
VACANCIES
14. Vacancies................................................... 3
MEETINGS OF THE BOARD
15. Notice...................................................... 4
16. Quorum...................................................... 4
ACTION WITHOUT A MEETING
17. Action by directors without a meeting....................... 4
COMMITTEES
18. Executive Committee......................................... 4
19. Other committees............................................ 4
COMPENSATION OF DIRECTORS AND COMMITTEE MEMBERS
20. Compensation of directors and committee members............. 5
OFFICERS
Election and designation of officers; compensation; term of
21. office; vacancies........................................... 5
CHAIRMAN OF THE BOARD
22. Chairman of the Board....................................... 5
PRESIDENT
23. President................................................... 5
SECRETARY
24. Secretary................................................... 6
TREASURER
25. Treasurer................................................... 6
OTHER OFFICERS
26. Other officers.............................................. 6
AUTHORITY TO VOTE SECURITIES
27. Authority to vote securities................................ 6
DELEGATION OF AUTHORITY AND DUTIES
28. Delegation of authority and duties of officers.............. 6
</TABLE>
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<TABLE>
<CAPTION>
PAGE
NUMBER SUBJECT NUMBER
- ------- ------- ------
<C> <S> <C>
STOCK CERTIFICATES
29. Stock certificates.......................................... 7
TRANSFERS OF SHARES
30. Transfers of shares......................................... 7
LOST, STOLEN OR DESTROYED CERTIFICATES
31. Lost, stolen or destroyed certificates...................... 7
TRANSFER AGENT AND REGISTRAR
32. Transfer agent and registrar................................ 7
RECORD DATES
33. Record dates................................................ 8
REGISTERED SHAREHOLDERS
Right of corporation to recognize only record
34. shareholders................................................ 8
INSPECTION OF BOOKS
35. Inspection of books......................................... 8
DIVIDENDS
36. Dividends................................................... 9
DIRECTORS' ANNUAL STATEMENT
38. Directors' annual statement................................. 9
NOTICES
39. Notices..................................................... 9
40. Advance notice of proposals by shareholders................. 10
41. Advance notice of nominations by shareholder................ 11
AMENDMENTS
42. Amendments.................................................. 11
</TABLE>
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<PAGE> 68
REGULATIONS
OF
OGLEBAY NORTON HOLDING COMPANY
OFFICES
1. The principal office of the corporation in the State of Ohio is located
in the City of Cleveland, Cuyahoga County. The corporation shall also have an
office in the City of Cleveland, Ohio, and it may also have such other offices
at such other places, either within or without the State of Ohio, as the Board
of Directors may from time to time designate or the business of the corporation
may require.
SEAL
2. The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Ohio". Said seal may be used by
causing it, or a facsimile thereof, to be impressed, affixed, or otherwise
reproduced.
SHAREHOLDERS' MEETINGS
3. All meetings of the shareholders may be held at such place within or
without the State of Ohio as shall be designated in the call for such meeting.
4. The annual meeting of the shareholders shall be held on the last
Wednesday in April in each year at such time and place as shall be designated in
the call for such meeting, and at such meeting the shareholders shall elect, by
ballot, a Board of Directors and transact such other business as may properly be
brought before the meeting.
5. The holders of a majority of the outstanding shares of the corporation
present in person or represented by proxy shall constitute a quorum at all
meetings of the shareholders for the transaction of business, except as
otherwise provided by law, by the Articles of Incorporation, or by these
Regulations; provided, however, that no action required by law, by the Articles
of Incorporation, or by these Regulations to be authorized or taken by a
designated proportion of the shares of the corporation may be authorized or
taken by a lesser proportion; and provided, further, that, if a quorum shall not
be present or represented at any meeting of the shareholders, the holders of a
majority of the voting shares present or represented thereat shall have power to
adjourn the meeting, from time to time, without notice other than announcement
at the meeting, until the requisite number of shares shall be present or
represented. At such adjourned meeting, at which the requisite number of shares
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified.
6. At each meeting of the shareholders, every shareholder having the right
to vote shall be entitled to vote in person or by proxy appointed by an
instrument in writing subscribed by such shareholder and bearing a date not more
than eleven months prior to said meeting, unless said instrument specifies the
date on which it is to expire or the length of time it is to continue in force.
In all elections of directors, each shareholder shall be entitled to vote
cumulatively, subject to the notice requirements of the Ohio General Corporation
Law, and to give one candidate as many votes as the number of directors to be
elected multiplied by the number of his or her votes, or to distribute his or
her votes on the same principle among two or more candidates, as he or she sees
fit. The vote for directors and, on the demand of any shareholder, the vote upon
any question before the meeting shall be by ballot. All elections shall be had
and all questions decided by a plurality vote, except as otherwise required by
law or by these Regulations.
7. Written notice of the annual meeting, stating the time, place and object
thereof, shall be mailed to each shareholder entitled to vote thereat at such
address as appears on the records of the corporation not less than ten or more
than sixty days prior to the meeting.
8. Upon request of any shareholder at any meeting of shareholders, a
complete list, or classified lists, of the shareholders of record, arranged in
alphabetical order and showing the address of each and the number of shares
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registered in the name of each, shall be produced at the meeting and open to the
examination of any shareholder who may be present at the meeting.
9. Special meetings of the shareholders for any purpose or purposes, unless
otherwise prescribed by law, may be called by the Chairman of the Board, by the
President, by the directors by action at a meeting or a majority of the
directors acting without a meeting, or by persons who hold fifty percent of all
shares outstanding and entitled to vote thereat.
10. Business transacted at all special meetings shall be confined the
objects stated in the call.
11. Written notice of any special meeting of the shareholders stating the
time, place and object thereof, shall be mailed, postage prepaid, not less than
ten or more than sixty days before such meeting, to each shareholder entitled to
vote thereat, at such address as appears on the books of the corporation.
DIRECTORS
12. The property and business of this corporation shall be managed by its
Board of Directors, consisting of such number of members, not less, however,
than three, as the shareholders may determine at any annual or special meeting
called for the purpose of electing directors at which a quorum is present, by
the affirmative vote of a majority of the shares which are represented at the
meeting and entitled to vote on such proposal, or as the directors may determine
from time to time. Whenever the shareholders shall have so determined the
number, such number shall be deemed the authorized number of directors until the
same shall be changed by vote of the shareholders as aforesaid or by the
directors. Directors need not be shareholders. They shall be elected at the
annual meeting of the shareholders, and each director shall be elected to serve
until his successor shall be elected and shall qualify. No director may be
removed from office.
13. In addition to the powers and authorities by these Regulations
expressly conferred upon them, the directors may exercise all such powers of the
corporation and do all such lawful acts and things as are not by law, by the
Articles of Incorporation, or by these Regulations directed or required to be
exercised or done by the shareholders.
VACANCIES
14. If the office of any director or directors becomes vacant by reason of
death, resignation, retirement, disqualification or otherwise, the remaining
directors, though less than a quorum, may choose a successor or successors who
shall hold office until the next annual meeting of shareholders at which the
class or classes of directors in which the vacancy or vacancies occur shall be
elected.
MEETINGS OF THE BOARD
15. Regular or special meetings of the Board may be called by the Chairman
of the Board or by the President on one day's notice to each director, either
personally or by mail, telegram, or cablegram. Special meetings shall be called
by the President or Secretary in like manner and on like notice on the written
request of two directors.
16. At all meetings of the Board, a majority of the directors shall be
necessary and sufficient to constitute a quorum for the transaction of business,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by law, by the Articles of Incorporation, or by
these Regulations.
ACTION WITHOUT A MEETING
17. Any action required or permitted to be taken at any meeting of the
Board of Directors or any committee thereof may be taken without a meeting if,
prior to such action, a written consent thereto is signed by all members
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of the Board or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the Board or committee.
COMMITTEES
18. The Board of Directors shall by resolution appoint an Executive
Committee consisting of not less than four or more than eight directors of the
corporation, as the Board shall determine, together with such alternates as the
Board may deem advisable. The Executive Committee shall meet as called by either
the Chairman of that Committee or the Secretary of the Company, at such place or
places as they may from time to time determine. The Executive Committee shall
have and may exercise all of the powers and authority of the Board of Directors
in the management of the business and affairs of the corporation, other than the
filling of vacancies among the directors or in any committee of the directors,
when the Board is not in session, subject to any specific resolutions of the
Board of Directors. Unless otherwise ordered by the Board of Directors, the
Executive Committee may prescribe its own rules for calling and holding meetings
and for its own procedures and may act at a meeting by a majority of its members
or without a meeting by written consent of all of its members. The Executive
Committee shall cause the Secretary to keep full and complete records of all
meetings and actions, which shall be open to inspection. by any director. Each
member of the Executive Committee and each alternate shall hold office during
the pleasure of the Board of Directors.
19. The Board of Directors may by resolution appoint one or more additional
committees, each committee to consist of three or more directors and to have
such authority and to perform such duties as may from time to time be determined
by the Board of Directors.
COMPENSATION OF DIRECTORS AND COMMITTEE MEMBERS
20. The directors, by the affirmative vote of a majority of those in
office, shall have the authority to establish reasonable compensation for
services to the corporation by directors and committee members, or may delegate
such authority to one or more officers or directors.
OFFICERS
21. The Board of Directors shall elect a Chairman of the Board, a
President, one or more Vice Presidents, any one or more of whom may be
designated Executive Vice Presidents and any one or more of whom may be
designated Senior Vice Presidents, a Treasurer and a Secretary. The Board of
Directors may elect such other officers as in its discretion it deems necessary.
The Chairman of the Board, any Vice Chairman of the Board, and the President
shall be directors, but no other one of the officers need be a director. Any
two, but not more than two, of such offices may be held by the same person. The
compensation of all of the officers of the corporation shall be fixed by the
Board of Directors. officers elected by the Board of Directors shall hold office
until their successors are chosen and qualified in their stead. Any officer
elected by the Board of Directors shall hold office during the pleasure of the
Board. If the office of any officer or officers becomes vacant, the vacancy may
be filled by the Board of Directors.
CHAIRMAN OF THE BOARD
22. The Chairman of the Board shall preside at all meetings of the Board of
Directors and shall have such other authority and perform such other duties as
may be determined by the Board of Directors.
PRESIDENT
23. The President shall preside at all meetings of the shareholders.
Subject to directions of the Board of Directors, he shall have general executive
authority and responsibility with respect to the business and affairs of the
corporation, and shall have such other authority and perform such other duties
as may be determined by the Board of Directors.
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SECRETARY
24. The Secretary shall record all of the proceedings of the meetings of
the shareholders, the Board of Directors, and the Executive Committee. He shall
keep such other books as may be required by the Board of Directors, shall give
notices of meetings of the shareholders, the Board, and the Executive Committee
required by law, by these Regulations, or otherwise, shall attest, on behalf of
the corporation, all documents requiring the attestation of the Secretary, and
shall have such authority and perform such other duties as may be determined by
the Board of Directors.
TREASURER
25. The Treasurer shall receive and have in charge all money, bills, notes,
bonds, shares in other corporations, and similar property belonging to the
corporation, and shall hold and dispose of the same as may be ordered by the
Board of Directors. He shall keep accurate financial accounts and hold the same
open for the inspection and examination of the directors and shall have such
authority and perform such other duties as may be determined by the Board of
Directors.
OTHER OFFICERS
26. The Vice Presidents, Assistant Secretaries, and the Assistant
Treasurers, if any, and any other officers whom the Board of Directors may elect
shall, respectively, have such authority and perform such duties as may be
determined by the Board of Directors.
AUTHORITY TO VOTE SECURITIES
27. The Chairman of the Board, the President, and any other officers
designated by the Board of Directors are each authorized to vote, appoint
proxies, and execute consents, waivers, and releases with respect to securities
of other corporations owned by the corporation.
DELEGATION OF AUTHORITY AND DUTIES
28. The Board of Directors is authorized to delegate the authority and
duties of any officer to any other officer and generally to control the action
of the officers and to require the performance of duties in addition to those
mentioned in these Regulations.
STOCK CERTIFICATES
29. Every holder of shares in the corporation shall be entitled to one or
more certificates, signed by the Chairman of the Board, the President, a Vice
President, the Treasurer, an Assistant Treasurer, the Secretary, or an Assistant
Secretary, certifying the number of shares owned by him in the corporation. When
such a certificate is countersigned by an incorporated transfer agent or
registrar, the signature of any of said officers of the corporation may be
facsimile, engraved, stamped, or printed. Although any officer of the
corporation whose manual or facsimile signature is affixed to such a certificate
ceases to be such officer before the certificate is delivered, such certificate
nevertheless shall be effective in all respects when delivered.
TRANSFERS OF SHARES
30. Shares of the corporation shall be transferable upon the books of the
corporation by the holders thereof, in person, or by a duly authorized attorney,
and new certificates shall be issued upon surrender and cancellation of
certificates for a like number of shares, with duly executed assignment or power
of transfer endorsed thereon or attached thereto, and with such proof of the
authenticity of the signatures to such assignment or power of transfer as the
corporation or its agents may reasonably require.
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LOST, STOLEN OR DESTROYED CERTIFICATES
31. The corporation may issue a new stock certificate in the place of any
certificate alleged to have been lost, stolen or destroyed. The Board of
Directors may require the owner, or his legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against it on account of the issuance of such new certificate.
A new certificate may be issued without requiring any bond when, in the judgment
of the directors, it is proper to do so.
TRANSFER AGENT AND REGISTRAR
32. The Board of Directors may, from time to time, appoint, or revoke the
appointment of, transfer agents and registrars and may require all stock
certificates to bear the signatures of such transfer agents and registrars or
any of them.
RECORD DATES
33. The Board of Directors may fix in advance a date, not exceeding fifty
days preceding the date of any meeting of shareholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of shares shall go into effect, or a
date in connection with obtaining the consent of shareholders for any purpose,
as a record date for the determination of the shareholders entitled to notice
of, and to vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares, or to give such consent, and in such case only such shareholders as
shall be shareholders of record on the date so fixed shall be entitled to such
notice of and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
any such record date fixed as aforesaid. In the event that no record date shall
be fixed for the determination of shareholders entitled to vote at a meeting of
shareholders, the record date shall be the date next preceding the day on which
notice is given, or the date next preceding the day on which the meeting is
held, as the case may be.
REGISTERED SHAREHOLDERS
34. The corporation shall be entitled to treat the holder of record of any
share or shares as the holder in fact thereof, and, accordingly, shall not be
bound to recognize any equitable or other claim to, or interest in, such share
on the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of Ohio.
INSPECTION OF BOOKS
35. The directors shall determine, from time to time, whether and if
allowed, when and under what conditions and regulations, the accounts and books
of the corporation (except such as may by statute be specifically open to
inspection), or any of them, shall be open to the inspection of the
shareholders, and the shareholders' rights in this respect are and shall be
restricted and limited accordingly.
DIVIDENDS
36. Dividends upon the shares of the corporation, subject to the provisions
of the Articles of Incorporation, if any, may be declared by the Board of
Directors at any regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property or in shares.
Before payment of any dividend, there may be set aside, out of any funds of
the corporation available for dividends, such sum or sums as the directors, from
time to time, in their absolute discretion, think proper, as a reserve fund to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of
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the corporation, or for such other purpose as the directors shall think
conducive to the interest of the corporation; and the directors may abolish any
such reserve in the manner in which it was created.
DIRECTORS' ANNUAL STATEMENT
37. The Board of Directors shall present at each annual meeting, and when
called for by vote of the shareholders, at any special meeting of the
shareholders, a full and clear statement of the business and condition of the
corporation.
NOTICES
38. Expect as provided in Section 39 and 40, whenever, under the provisions
of these Regulations, notice is required to be given to any director, officer or
shareholder, it shall not be construed to mean personal notice, but such notice
as may be given in writing by mail, by depositing the same in the post office or
letter box in a postpaid, sealed wrapper, addressed to such shareholder, officer
or director at such address as appears on the books of the corporation; and such
notice shall be deemed to be given at the time when the same shall be thus
mailed.
Any shareholder, director or officer may waive any notice required to be
given by law, by the Articles of Incorporation or by these Regulations and shall
be deemed to have waived notice of any meeting which he shall attend without
protesting, prior to or at the commencement of such meeting, the lack, of proper
notice thereof.
39. At any annual or special meeting of shareholders, proposals by
shareholders shall be considered only if the shareholder intending to make the
proposal is entitled to vote on the proposal at the meeting, advance notice of
the intention to make the proposal is timely given in accordance with this
Section 39 and the proposals are otherwise proper for consideration under
applicable law and the Articles of Incorporation. Notice of any such shareholder
proposal must be given in writing to the Secretary, and received at the
corporation's principal executive offices, not less than sixty nor more than
ninety days prior to the scheduled date of the meeting, as disclosed by the
corporation to its shareholders or in other public notice (including, in the
case of an annual meeting, disclosure in the proxy statement for the previous
year); except that, if notice to the shareholders or prior public disclosure of
the scheduled date of the meeting is first given or made less than seventy-five
days prior to the date of the meeting, the written notice of the intention to
make the shareholder proposal must be given to the Secretary not later than the
close of business on the fifteenth day following the day on which such notice to
the shareholders or public disclosure (whichever occurs earlier) is first given
or made. Notice of the anticipated date of the annual meeting included the
corporation's proxy statement for the prior year will, for this purpose, be
adequate notice of the date of the meeting unless the date is subsequently
advanced by more than thirty days or delayed by more than ninety days. Any
notice of the intention to make a shareholder proposal shall be accompanied by
the text of the proposal and a brief written statement of the reasons why the
shareholder favors the proposal and shall set forth (i) the shareholder's name
and record address, (ii) a representation that the shareholder is a holder of
record of shares of the corporation entitled to vote at the meeting and intends
to appear in person or by proxy at the meeting to make the proposal, (iii) a
description of all arrangements or understandings between the shareholder and
any other person (naming that person) pursuant to which the proposal is to be
made, and (iv) the number and class of all shares of the corporation beneficial
owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934) by the shareholder and any material interest of the shareholder in the
proposal (other than any interest solely as a shareholder). The person presiding
at the meeting shall determine whether the notice of the shareholder proposal
has been duly given and shall direct that the proposal not be considered if the
notice (together with all information required to be submitted by the
shareholder under this Section 40) has not been given.
40. Subject to the rights of the holders of any class or series of
preferred shares of the corporation, a shareholder may make nominations for the
election of directors at an annual or special meeting of shareholders only if
the shareholder intending to make the nominations is entitled to vote for the
election of directors at the meeting and written notice of the intention to make
the nominations is timely given as provided in this Section 41. Notice of any
such shareholder nominations must be given in writing to the Secretary, and
received at
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the corporation's principal executive offices, not less than sixty nor more than
ninety days prior to the scheduled date of the meeting, as disclosed by the
corporation to its shareholders or in other public notice (including, in the
case of an annual meeting, disclosure in the proxy statement for the previous
year); except that, if notice to the shareholders or prior public disclosure of
the scheduled date of the meeting is first given or made less than seventy-five
days prior to the date of the meeting, the written notice of the intention to
make the nominations must be given to the Secretary not later than the close of
business on the fifteenth day following the day on which such notice to the
shareholders or public disclosure (whichever occurs earlier) is first given or
made. Any notice of a shareholder's intention to make such nominations shall set
forth: (i) as to each person who is not an incumbent director when the
shareholder proposes to nominate that person for election as a director, (A) the
name, age, and business and residence address of that person, (B) the principal
occupation and employment of that person during the past five years and the name
and principal business of any corporation or other organization in which such
occupations and employment were carried on, (C) all positions of that person as
a director, officer, partner, employee or controlling shareholder of any
corporation or other organization, (D) the class and number of shares of the
corporation that are beneficially owned (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934) by that person, (E) any other information
regarding the person that would be required, pursuant to Item 401 of Regulation
S-K adopted by the Securities and Exchange Commission (or the corresponding
provisions of any regulations subsequently adopted by the Securities and
Exchange Commission applicable to the corporation), to be included in a proxy
statement of the corporation complying with the proxy rules of the Securities
and Exchange Commission if that person were nominated by the board of directors
of the corporation, and (F) the written consent of that person to serve as a
director of the corporation, and (ii) as to the shareholder giving the notice,
(A) the name and record address of the shareholder, (B) a representation that
the shareholder is a holder of record of shares of the corporation entitled to
vote at the meeting and intends to appear in person or by proxy at the meeting
to nominate the person specified in the notice, (C) a description of all
arrangements or understandings between the shareholder and each nominee and any
other person (naming that person) pursuant to which the nomination is to be
made, and (D) the class and number of shares of the corporation that are
beneficially owned (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) by the shareholder.
AMENDMENTS
41. These Regulations may be amended, or new Regulations may be adopted, at
a meeting by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the corporation on the proposal, or
without a meeting by the written consent of the holders of shares entitling them
to exercise all of the voting power of the corporation on the proposal. No
amendment of these Regulations with respect to the time or place for the
election of directors shall be made within sixty days next before the day on
which such election is to be held. In case of any amendment of these Regulations
with respect to such time or place, notice thereof shall be given to each
shareholder, in the manner provided in Section 39 of these Regulations, at least
twenty days before the first election following such amendment is held. Any
amendment of [the first sentence of Section 14,] Section 39, or Section 40 of
these Regulations adopted by shareholders at an annual or special meeting shall
only be effective for subsequent meetings and shall not eliminate or modify the
prohibition on removal of directors or the requirement for advance notice of
shareholder proposals or shareholder nominations for the election of directors,
as the case may be, made at the meeting at which the amendment is adopted.
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EXHIBIT D
OGLEBAY NORTON COMPANY
DIRECTOR FEE DEFERRAL PLAN
ARTICLE I
ESTABLISHMENT OF PLAN AND PURPOSE
SECTION 1.1. ESTABLISHMENT OF PLAN. This Oglebay Norton Company Director
Fee Deferral Plan (the "Plan") is established effective as of February 1, 1998,
subject to approval by its Stockholders at its 1998 Annual Meeting of
Stockholders.
SECTION 1.2. PURPOSE. The Plan is intended to attract and retain qualified
individuals to serve as Directors of the Company by offering them the
opportunity to defer some or all of the Fees earned by them for services as a
Director of the Company.
ARTICLE II
DEFINITIONS
For 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 any portion of his Fees pursuant to the Plan.
"Board" means the Board of Directors of the Company.
"Committee" means the Committee authorized by the Board to administer the
Plan.
"Common Stock" or "Stock" means common stock, one dollar ($1.00) par value
per share, of the Company.
"Company" means Oglebay Norton Company, a corporation organized under the
laws of the State of Delaware, or any successor organization.
"Deferred Cash" means Deferred Fees that are credited with interest based
on the Prime Rate in accordance with Section 4.5.
"Deferred Compensation Election" means a written election delivered to the
Company pursuant to which a Participant elects to defer Fees under the Plan.
"Deferred Fees" means any portion of Fees deferred pursuant to the Plan.
"Designated Beneficiary" means one or more beneficiaries designated by the
Participant in accordance with Section 7.2.
"Fair Market Value," with respect to a share of Stock as of any given day,
means the last reported closing price for a share of Stock on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") for that
day or, if there was no sale of Stock so reported for that day, on the most
recently preceding day on which there was such a sale. If the Stock is not
listed or admitted to trading on NASDAQ on any given day, the Fair Market Value
on that day will be as determined by the Committee.
"Fees" means any and all compensation payable, but for an election made
under the Plan, to a Participant in the form of cash for services as a Director
of the Company.
"Matching Contributions" means the additional Share Units credited by the
Company to the Account of a Participant who (i) elects to defer a portion of his
Fees in the form of Share Units, or (ii) elects to defer a portion of dividend
equivalents attributable to Share Units as provided in Section 4.03.
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"Participant" means a Director who is or hereafter becomes eligible to
participate in the Plan and does participate by electing, in the manner
specified herein, to defer Fees pursuant to the Plan.
"Prime Rate" means the Prime Rate as reported in The Wall Street Journal in
effect as of the date of each Annual Meeting of Stockholders.
"Share Units" means Deferred Fees that are converted into share units in
accordance with Section 4.3.
"Termination of Service" means an individual's termination of service as a
Director for any reason whatsoever.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
SECTION 3.1. ELIGIBILITY AND PARTICIPATION. Any Director of the Company
who is not employed by the Company shall be eligible to participate under the
Plan and will become a Participant upon submission to the Company of a properly
completed and executed Deferred Compensation Election.
SECTION 3.2. DEFERRAL OPTIONS. For the period beginning February 1, 1998
and ending December 31, 1998, and each calendar year thereafter, a Participant
may elect to defer the receipt of all or part of his or her Fees (in ten-percent
increments) in the form of Share Units or Deferred Cash. Once a Participant has
made an effective election, he may not thereafter change that election or change
any allocation between Share Units or Deferred Cash with respect to such
calendar year.
SECTION 3.3. ELECTION DEADLINE. To be in effect, a Participant's election
must be completed, signed and filed with the Secretary of the Company on or
before such date as is necessary to defer inclusion of the Fees in the
Director's gross income for Federal income tax purposes.
ARTICLE IV
DEFERRED FEES
SECTION 4.1. CREDITING OF DEFERRED FEES. Deferred Fees shall be credited
to the Participant's Account on the dates the Fees would have been paid to the
Participant if there had been no valid deferral election.
SECTION 4.2. DEFERRAL PERIODS. Payment of the amount of Fees allocated to
Share Units or Deferred Cash will be deferred to Termination of Service. Such
Fees shall be credited to the Participant on the date such amounts would have
been paid to him if there had been no valid deferral election.
SECTION 4.3. SHARE UNITS. Fees deferred in the form of Share Units shall
be converted into that number of Share Units equal to the amount of the Fees
being deferred divided by the Fair Market Value of one share of Stock on the
date the Fees are credited to the Participant's Account. On each Company Stock
dividend payment date, dividend equivalents equal to the actual Company Stock
dividends shall either, based upon the written election of the Participant, (i)
be credited to the Share Units in the Participant's Account, and shall in turn
be converted into Share Units based upon the Fair Market Value of the Stock on
that date, or (ii) be paid to the Participant in cash.
SECTION 4.4. MATCHING CONTRIBUTION. The Company shall credit to the
Participant's Account in the form of additional Share Units (a) at the time the
Fees are credited to the Account a Matching Contribution equal to twenty-five
percent (25%) of the Deferred Fees credited in the form of Share Units, and (b)
at each Company Stock dividend payment date, to the extent the Participant has
elected to defer dividend equivalents in Share Units, a Matching Contribution
equal to twenty-five percent (25%) of the dividends deferred by the Participant
on that date.
SECTION 4.5. DEFERRED CASH. Fees deferred as Deferred Cash shall be
credited with interest at the Prime Rate, compounded annually effective as of
the end of each calendar year, until distributed.
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ARTICLE V
DISTRIBUTIONS
SECTION 5.1. TIMING. Following a Participant's Termination of Service, all
Share Units and Deferred Cash in the Participant's Account shall be distributed
in the manner described in Section 5.2. Such distributions shall be made or
commence as soon as administratively feasible following the event that entitles
the Participant to a distribution.
SECTION 5.2. FORM OF DISTRIBUTION. Any Share Units standing to the
Participant's credit shall be converted to the same number of common shares of
Stock for distribution to the Participant in a single distribution, except that
any fractional Share Units shall be paid in cash. Any Deferred Fees credited to
the Participant's Account in the form of Deferred Cash shall be automatically
distributed in three substantially equal annual installments of principal in the
form of cash, with interest continuing to accrue on the undistributed balance in
the Participant's Account.
ARTICLE VI
ADMINISTRATION, AMENDMENT AND TERMINATION
SECTION 6.1. ADMINISTRATION. The Plan shall be administered by the
Committee.
SECTION 6.2. AUTHORITY OF THE COMMITTEE. The Committee shall have the
authority to:
(a) interpret the terms and provisions of the Plan and any deferral
made hereunder (and any agreements relating thereto), and otherwise settle
all claims and disputes arising under the Plan;
(b) delegate responsibility and authority for the operation and
administration of the Plan, appoint employees and officers of the Company
to act on its behalf, and employ persons to assist in fulfilling its
responsibilities under the Plan; and
(c) 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 the 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.
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,
termination, or discontinuation shall be made that would impair the rights of a
Participant with respect to any outstanding deferral under the Plan without the
Participant's consent, or that, 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; or (b) 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 deferral of compensation. Payments shall be made from the
general funds of the Company, and the Company shall not be required to establish
or maintain any special or separate fund, to purchase or acquire life insurance
on a Participant's life, or otherwise to segregate assets to assure that such
payments shall be made, and neither a Participant nor Designated Beneficiary
shall have any interest in any particular assets of the Company by reason of its
obligations hereunder. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant 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 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.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NON-ALIENATION OF BENEFITS. Subject to any federal statue to
the contrary, no right or benefit under the Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge
any right or benefit under the Plan shall be void. No right or benefit hereunder
shall in any manner be liable for or subject to the debts, contracts,
liabilities, or torts of the person entitled to such benefits. If a Participant
or a Designated Beneficiary (if entitled to benefits under the Plan) shall
become bankrupt, or attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge any right hereunder, then such right or benefit shall, in
the discretion of the Committee, cease and terminate, and in such event, the
Company may hold or apply the same or any part thereof for the benefit of the
Participant, Designated Beneficiary, or his spouse, children, or other
dependents, or any of them, in such manner and in such amounts and proportions
as the Committee may deem proper.
SECTION 7.2. DESIGNATION OF BENEFICIARY. A Participant may designate one
or more Designated Beneficiaries on a form prescribed by the Committee, to whom
payments otherwise due to or for the benefit of the Participant hereunder shall
be made in the event of his death prior to the commencement or completion of
benefit payments hereunder. In the event no such written designation is made by
a Participant or if no Designated Beneficiary shall be in existence at the time
of the Participant's death or if each Designated Beneficiary predeceases the
Participant, the estate of the Participant shall be his Designated Beneficiary.
SECTION 7.3. NO EMPLOYMENT AGREEMENT. The Plan shall not be deemed to
constitute a contract of employment between the Company and a Participant.
Neither shall the execution of the Plan nor any action taken by the Company
pursuant to the Plan be held or construed to confer on a Participant any legal
right to be continued as Director of the Company or in any other capacity with
the Company whatsoever; nor shall any provision herein restrict the right of any
Participant to resign as a Director.
SECTION 7.4. BINDING EFFECT. Obligations incurred by the Company pursuant
to the Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant or his Designated Beneficiary.
SECTION 7.5. ENTIRE PLAN. This document and any amendments hereto contain
all the terms and provisions of the Plan and shall constitute the entire Plan,
any other alleged terms or provisions being of no effect.
ARTICLE VIII
CONSTRUCTION
SECTION 8.1. GOVERNING LAW. The Plan shall be construed and governed in
accordance with the laws of the State of Ohio.
SECTION 8.2. GENDER. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
* * *
EXECUTED at Cleveland, Ohio, effective as of the date described herein.
OGLEBAY NORTON COMPANY
By
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Title:
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EXHIBIT E
OGLEBAY NORTON COMPANY
PERFORMANCE OPTION AGREEMENT
This Agreement between OGLEBAY NORTON COMPANY ("Oglebay") and JOHN LAUER
("Lauer") memorializes the grant made on December 17, 1997 by Oglebay's
Compensation Subcommittee to Lauer of a nonqualified stock option as
contemplated by the Employment Agreement entered into between Oglebay and Lauer
on that same date (the "Employment Agreement"). Capitalized terms used in this
Agreement and not otherwise defined have the meanings assigned to them in the
Employment Agreement.
1. GRANT OF OPTION. The Compensation Subcommittee hereby grants to Lauer,
as of December 17, 1997, an option (the "Performance Option") to purchase all or
any number of an aggregate of 380,174 shares of Oglebay Common Stock, $1.00 par
value ("Shares"), at an exercise price of $38.00 per Share (the "Exercise
Price"). (The Exercise Price is equal to the closing per Share sales price for
December 16, 1997 as reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") National Market plus $6.00 per Share.) The
Performance Option shall be a nonqualified stock option and shall not be treated
as an incentive stock option. The Performance Option is granted subject to
approval of Oglebay's shareholders, which approval will be sought at Oglebay's
1998 Annual Meeting of Shareholders.
2. TERM OF OPTION. Unless earlier terminated pursuant to any of Sections
6.1, 6.2, or 6.3, the Performance Option shall terminate at the close of
business on, and shall not be exercisable at any time after, June 30, 2005.
3. FULL VESTING IF LAUER REMAINS IN EMPLOY OF OGLEBAY THROUGH JANUARY 2,
2003. If Lauer remains in the employ of Oglebay through January 2, 2003, the
Performance Option, to the extent not previously exercised by Lauer, shall
remain exercisable thereafter through June 30, 2005.
4. EXERCISE OF OPTION.
4.1 First Exercise Date. Unless accelerated as provided in Section
6.1, the Performance Option will first become exercisable on January 1,
2001.
4.2 Exercise in Whole or in Part. Once exercisable, the Performance
Option may be exercised by Lauer in whole or in part (but not for any
fractional Shares) and from time to time until the expiration or
termination of the Performance Option.
4.3 Method of Exercise. The Performance Option will be exercisable by
delivery of (a) the Exercise Price (payable in accordance with Section
4.4), and (b) a written notice to Oglebay identifying this Agreement and
specifying the number of Shares as to which the Performance Option is being
exercised. Upon any exercise of the Performance Option, Lauer shall provide
Oglebay the means to satisfy Oglebay's withholding obligation in accordance
with Section 5. Oglebay shall deliver to Lauer certificates representing
the Performance Option Shares as soon as administratively feasible
following any exercise made in conformance with all of the terms of this
Agreement.
4.4 Payment for Shares. Upon exercise of the Performance Option,
Lauer shall pay the Exercise Price in cash or in such other form of
consideration as the Compensation Subcommittee may determine to be
acceptable, including, without limitation, (a) by delivery by Lauer (with
the written notice of election to exercise) of irrevocable instructions to
a broker registered under the Securities Exchange Act of 1934, as amended,
to promptly deliver to Oglebay the amount of sale or loan proceeds to pay
the Exercise Price, (b) in Shares (including through an attestation
procedure) surrendered to Oglebay, (c) by the surrender of all or part of
the Performance Option, or (d) by a combination of the foregoing methods,
as and to the extent permitted by the Compensation Subcommittee. Shares
surrendered in connection with the exercise of the Performance Option shall
be valued at their Fair Market Value on the date of exercise. Except as
otherwise determined by the Compensation Subcommittee, the term "Fair
Market Value" with respect to Shares means the closing sales price of
Shares as reported on NASDAQ National Market on the date for which the
determination of fair market value is made or, if there are no sales of
Shares on that date, then on the next
E-1
<PAGE> 80
preceding date on which there were any sales of Shares. If the Shares cease
to be traded on the NASDAQ National Market, the "Fair Market Value" of
Shares shall be determined in such similar manner as may be prescribed by
the Compensation Subcommittee.
5. WITHHOLDING OF TAXES. The Compensation Subcommittee may, in its
discretion, permit or require Lauer to satisfy, in whole or in part, any
applicable federal, state, and local withholding tax obligation that may arise
in connection with the acquisition of Shares pursuant to the Performance Option,
by such means as the Compensation Subcommittee may determine including, without
limitation, by having Oglebay hold back some portion of the Shares that would
otherwise be delivered pursuant to the Performance Option or by delivering to
Oglebay an amount equal to the withholding tax obligation arising with respect
to such acquisition in (a) cash, (b) Shares, or (c) such combination of cash and
Shares as the Compensation Subcommittee may determine. The Fair Market Value of
the Shares to be so held back by Oglebay or delivered by Lauer shall be
determined as of the date on which the obligation to withhold first arose.
Oglebay may apply the provisions of this Section 5 based upon generally
applicable withholding rates and without regard to any statutory minimum rate
applicable to special payments.
6. EFFECT OF TERMINATION OF LAUER'S EMPLOYMENT BEFORE JANUARY 2, 2003. The
provisions of this Section 6 shall apply only if the date on which Lauer's
employment with Oglebay terminates (the "Termination Date") occurs before
January 2, 2003.
6.1 Termination Without Cause, etc., Constructive Termination, or
Termination by Lauer after a Change of Control. If, before January 2,
2003, Lauer's employment is terminated by Oglebay for any reason other than
Cause, disability, or death or Lauer is Constructively Terminated or Lauer
terminates his employment by notice to the Board of Directors within 90
days of the occurrence of a Change of Control, the Performance Option, (a)
to the extent not already exercisable, will become immediately exercisable,
(b) will remain exercisable through January 2, 2004, and (c) will be
terminated at the close of business on January 2, 2004.
6.2 Termination by Death or Disability. If, before January 2, 2003,
Lauer's employment with Oglebay is terminated by his death or by Oglebay on
account of Lauer's disability:
(a) if the Termination Date occurs before January 1, 2001, the
Performance Option will be terminated as of the Termination Date; and
(b) if the Termination Date occurs after December 31, 2000, the
Performance Option, to the extent not previously exercised, will remain
exercisable for a period of one year after the Termination Date and will
be terminated at the close of business on the first anniversary of the
Termination Date.
6.3 Termination for Cause or Voluntarily by Lauer. If, before January
2, 2003, Lauer's employment is terminated by Oglebay for Cause or by Lauer
other than as a result of a Constructive Termination, the Performance
Option will be terminated as of the Termination Date.
7. TRANSFERABILITY. The Performance Option may not be transferred by Lauer
other than by will or by the laws of descent and distribution. During Lauer's
lifetime, only Lauer himself (or, in the case of his incapacity, his attorney in
fact or legal guardian) may exercise the Performance Option.
8. ADJUSTMENT UPON CHANGES IN SHARES. In the event of any stock dividend,
stock split, or share combination of the Shares or any reclassification,
recapitalization, merger, consolidation, other form of business combination,
liquidation, or dissolution involving Oglebay or any spin-off or other
distribution to shareholders of Oglebay (other than normal cash dividends), the
Compensation Subcommittee shall adjust the number and kind of shares subject to,
the price per share under, and the terms and conditions of the Performance
Option to the extent necessary and in such manner that the benefits to Lauer
under the Performance Option shall be maintained substantially as before the
occurrence of that event. Any adjustment so made by the Compensation
Subcommittee shall be conclusive and binding for all purposes of this Agreement
as of such date as the Compensation Subcommittee may determine.
E-2
<PAGE> 81
9. ADMINISTRATION. The Compensation Subcommittee shall have the authority
to make all determinations necessary for the administration of this Agreement.
The construction and interpretation by the Compensation Subcommittee of any
provision of this Agreement and any determination made by the Compensation
Subcommittee pursuant to any provision hereof shall be final and conclusive. No
member or alternate member of the Committee shall be liable for any action or
determination made in good faith. The Compensation Subcommittee may authorize
any one or more members of the Compensation Subcommittee or any officer of
Oglebay to execute and deliver documents on behalf of the Compensation
Subcommittee and the Compensation Subcommittee may delegate to one or more
employees, agents, or officers of Oglebay, or to one or more third party
consultants, accountants, lawyers, or other advisors, such ministerial duties
related to the operation of the Agreement as it may deem appropriate.
10. MISCELLANEOUS. Nothing contained in this Agreement shall be understood
as conferring on Lauer any right to continue as an employee of Oglebay or any
affiliate. This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio. This Agreement shall inure to the benefit of and
be binding upon its parties and their respective heirs, executors,
administrators, successors, and assigns, but the Performance Option shall not be
transferable by Lauer other than as provided in Section 7.
IN WITNESS WHEREOF, Oglebay has caused this Agreement to be executed on its
behalf by its duly authorized Chairman of the Compensation Subcommittee, and
Lauer has hereunto set his hand, all as of the day and year first written above.
OGLEBAY NORTON COMPANY
By /s/ JOHN D. WEIL
------------------------------------
John D. Weil, Chairman, Compensation
Subcommittee
/s/ JOHN LAUER
-----------------------------------
John Lauer
E-3
<PAGE> 82
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Paragraph (E) of Section 1701.13 of the Ohio Revised Code grants each
corporation organized under the laws of the State of Ohio, such as the Holding
Company, the power to indemnify its directors, officers and other specified
persons. Provisions relating to indemnification of directors and officers of the
Holding Company and other specified persons have been adopted pursuant to Ohio
law and are contained in Article Seventh of the Holding Company's Articles of
Incorporation. Article Seventh of the Articles of Incorporation provides that
the corporation shall indemnify, to the fullest extent then permitted by law,
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was a director or officer of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or agent of
another corporation, partnership, limited liability company, joint venture,
trust or other enterprise. Article Seventh provides also that the corporation
shall pay, to the fullest extent then required by law, expenses, including
attorney's fees, incurred by a director in defending any such action, suit or
proceeding as they are incurred, in advance of the disposition thereof, upon
receipt of any undertaking then required by law. Article Seventh provides
further that the corporation may, in its discretion, indemnify any other person,
or advance expenses to any other person, in the same manner and to the fullest
extent then permitted by law. Finally, Article Seventh provides that the
corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer or employee of the corporation, or is or was serving
at the request of the corporation as a director, trustee, officer, employee or
agent of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise, against any liability asserted against him
or her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the corporation would have the power to
indemnify him or her against such liability under Article Seventh of the
Articles of Incorporation or Ohio law.
Oglebay Norton maintains insurance coverage for the benefit of its
directors and officers with respect to many types of claims that may be asserted
against them, some of which claims may be in addition to those which would
entitle the director or officer to indemnification under Article Seventh of the
Articles of Incorporation.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<C> <S>
(a) EXHIBITS.
2 Agreement and Plan of Merger (included as Exhibit A to Proxy
Statement-Prospectus).
3.1 Articles of Incorporation of Oglebay Norton Holding Company
(included as Exhibit B to Proxy Statement-Prospectus).
3.2 Regulations of Oglebay Norton Holding Company (included as
Exhibit C to Proxy Statement-Prospectus).
5 Opinion of Thompson Hine & Flory LLP regarding legality of
the Common Shares of Oglebay Norton Holding Company (to be
filed by amendment).
8 Opinion of Deloitte & Touche LLP regarding federal income
tax matters (to be filed by amendment).
10.1 Oglebay Norton Company Director Fee Deferral Plan (included
as Exhibit D to Proxy Statement-Prospectus).
10.2 Performance Option Agreement with Mr. John N. Lauer
(included as Exhibit E to Proxy Statement-Prospectus).
11 Computation of Earnings per Share (to be filed by
amendment).
13 The portions of the Annual Report to Stockholders of Oglebay
Norton Company for the year ended December 31, 1997 that are
incorporated by reference into the Proxy
Statement-Prospectus (to be filed by amendment).
</TABLE>
II-1
<PAGE> 83
<TABLE>
<S> <C>
21 Subsidiaries of Oglebay Norton Holding Company (to be filed
by amendment).
23.1 Consent of Thompson Hine & Flory LLP (included in Exhibit 5
to this Registration Statement).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ernst & Young LLP.
24 Power of Attorney.
(b) NOT APPLICABLE.
(c) See Exhibit 8 under Section (a) of this Item.
</TABLE>
ITEM 22. UNDERTAKINGS
The Registrant hereby undertakes as follows:
(a) That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the Registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(b) That every prospectus that is filed pursuant to paragraph (a) above, or
that purports to meet the requirements of Section 10(a)(3) of the Securities Act
of 1933 and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to this registration statement and
will not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) For purposes of determining any liability under the Securities Act of
1933, each filing of Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 20 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, and will be governed by the final adjudication of such
issue.
(e) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(f) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-2
<PAGE> 84
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO
ON MARCH 3, 1998.
OGLEBAY NORTON HOLDING COMPANY
By: /s/ DAVID G. SLEZAK
------------------------------------
David G. Slezak, Secretary and
Director of Legal Affairs
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AS OF MARCH 3, 1998.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C> <C>
/s/ JOHN N. LAUER President, Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
John N. Lauer
/s/ DAVID H. KELSEY Vice President and Chief Financial Officer
- --------------------------------------------- (Principal Financial and Accounting Officer)
David H. Kelsey
/s/ BRENT D. BAIRD Director
- ---------------------------------------------
Brent D. Baird
/s/ MALVIN E. BANK Director
- ---------------------------------------------
Malvin E. Bank
/s/ WILLIAM G. BARES Director
- ---------------------------------------------
William G. Bares
/s/ JAMES T. BARTLETT Director
- ---------------------------------------------
James T. Bartlett
/s/ ALBERT C. BERSTICKER Director
- ---------------------------------------------
Albert C. Bersticker
/s/ R. THOMAS GREEN, JR. Director
- ---------------------------------------------
R. Thomas Green, Jr.
/s/ RALPH D. KETCHUM Director
- ---------------------------------------------
Ralph D. Ketchum
/s/ WILLIAM G. PRYOR Director
- ---------------------------------------------
William G. Pryor
/s/ JOHN D. WEIL Director
- ---------------------------------------------
John D. Weil
By /s/ DAVID G. SLEZAK March 3, 1998
- --------------------------------------------------------
David G. Slezak, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-3
<PAGE> 85
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- ----------- ------
<C> <S> <C>
2 Agreement and Plan of Merger (included as Exhibit A to Proxy
Statement-Prospectus).
3.1 Articles of Incorporation of Oglebay Norton Holding Company
(included as Exhibit B to Proxy Statement-Prospectus).
3.2 Regulations of Oglebay Norton Holding Company (included as
Exhibit C to Proxy Statement-Prospectus).
5 Opinion of Thompson Hine & Flory LLP regarding legality of
the Common Shares of Oglebay Norton Holding Company (to be
filed by amendment).
8 Opinion of Deloitte & Touche LLP regarding federal income
tax matters (to be filed by amendment).
10.1 Oglebay Norton Company Director Fee Deferral Plan (included
as Exhibit D to Proxy Statement-Prospectus).
10.2 Performance Option Agreement with Mr. John N. Lauer
(included as Exhibit E to Proxy Statement-Prospectus).
11 Computation of Earnings Per Share (to be filed by
amendment).
13 The portions of the Annual Report to Stockholders of Oglebay
Norton Company for the year ended December 31, 1997 that are
incorporated by reference into the Proxy
Statement-Prospectus (to be filed by amendment).
21 Subsidiaries of Oglebay Norton Holding Company (to be filed
by amendment).
23.1 Consent of Thompson Hine & Flory LLP (included in Exhibit 5
to this Registration Statement).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ernst & Young LLP.
24 Power of Attorney.
(b) NOT APPLICABLE.
(c) See Exhibit 8 of this Item.
</TABLE>
<PAGE> 1
Exhibit 23.2
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the reference to our firm under the captions "Federal Income Tax
Consequences" and "Experts" in the Registration Statement on Form S-4 of Oglebay
Norton Holding Company and related Proxy Statement-Prospectus of Oglebay Norton
Company and Oglebay Norton Holding Company for the registration of 7,303,332
Common Shares of Oglebay Norton Holding Company and to the attachment thereto as
an exhibit our opinion regarding the federal income tax consequences of the
reorganization and merger described in the Registration Statement and related
Proxy Statement-Prospectus.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Cleveland, Ohio
March 3, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) of Oglebay Norton Holding Company and related
Proxy Statement-Prospectus of Oglebay Norton Company and Oglebay Norton Holding
Company for the registration of 7,303,332 Oglebay Norton Holding Company Common
Shares and to the incorporation by reference therein of our report dated
February 14, 1997, with respect to the consolidated financial statements of
Oglebay Norton Company included in its Annual Report (Form 10-K) for the year
ended December 31, 1996, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
------------------------------------
Ernst & Young LLP
Cleveland, Ohio
March 2, 1998
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/24/98 /s/ A. C. Bersticker
- ------------------ -------------------------------
Date Albert C. Bersticker
Director
<PAGE> 2
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
Feb. 23, 1998 /s/ Brent D. Baird
- ------------------ -------------------------------
Date Brent D. Baird
Director
<PAGE> 3
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/26/98 /s/ D. H. Kelsey
- ------------------ -------------------------------
Date David H. Kelsey
Vice President and Chief Financial
Officer
<PAGE> 4
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/26/98 /s/ John D. Weil
- ------------------ -------------------------------
Date John D. Weil
Director
<PAGE> 5
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
March 2, 1998 /s/ John N. Lauer
- ------------------ -------------------------------
Date John N. Lauer
President and Chief Executive
Officer and Director
<PAGE> 6
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/24/98 /s/ James T. Bartlett
- ------------------ -------------------------------
Date James T.Bartlett
Director
<PAGE> 7
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/26/98 /s/ Malvin E. Bank
- ------------------ -------------------------------
Date Malvin E. Bank
Director
<PAGE> 8
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
Feb. 27, 1998 /s/ R. Thomas Green, Jr.
- ------------------ -------------------------------
Date R. Thomas Green, Jr.
Chairman of the Board and Director
<PAGE> 9
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/27/98 /s/ Ralph D. Ketchum
- ------------------ -------------------------------
Date Ralph D. Ketchum
Director
<PAGE> 10
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2-26-98 /s/ William G. Bares
- ------------------ -------------------------------
Date William G. Bares
Director
<PAGE> 11
POWER OF ATTORNEY
WHEREAS, OGLEBAY NORTON HOLDING COMPANY, an Ohio corporation
("Holding Company"), proposes to file with the Securities and Exchange
Commission a Registration Statement on Form S-4 relating to shares of Holding
Company that will be issued in connection with an Agreement and Plan of Merger
("Agreement"). That Agreement provides that Oglebay Norton Company, a Delaware
corporation ("Oglebay Norton"), will become a wholly-owned subsidiary of Holding
Company and the shares of common stock of Oglebay Norton will be converted into
common shares of Holding Company.
NOW, THEREFORE, the undersigned hereby appoints David G.
Slezak, as attorney for the undersigned, for the purpose of executing and filing
such Registration Statement and any amendments thereto, hereby giving said
attorney full authority to perform all acts necessary or desirable thereto as
fully as the undersigned could do if personally present and hereby ratifying all
that said attorney may lawfully do, have done or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney prior to the filing of the above-referenced Form S-4.
2/24/98 /s/ W. G. Pryor
- ------------------ -------------------------------
Date William G. Pryor
Director
