<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OGLEBAY NORTON COMPANY
(AND ITS SUBSIDIARIES IDENTIFIED ON THE FOLLOWING PAGE)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 1400 34-1888342
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2598
(216) 861-3300
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
JEFFREY S. GRAY, ESQ.
OGLEBAY NORTON COMPANY
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2598
(216) 861-3300
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
------------------------
COPIES TO:
CHARLES W. HARDIN, JR., ESQ.
JONES, DAY, REAVIS & POGUE
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114
(216) 586-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable following the effective date of this registration statement.
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. [ ]
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------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
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10% Senior Subordinated Notes Due
2009.................................. $100,000,000 100% $100,000,000 $27,800
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Subsidiary Guarantees of 10% Senior
Subordinated Notes Due 2009(2)........ N/A N/A N/A N/A
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Total......................... $100,000,000 100% $100,000,000 $27,800
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(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(f) under the Securities Act of 1933, as amended.
(2) Pursuant to Rule 457(n) under the Securities Act of 1933, no registration
fee is required with respect to the Subsidiary Guarantees.
------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
ADDRESS,
INCLUDING ZIP
CODE,
AND TELEPHONE
NUMBER, INCLUDING
STATE OF PRIMARY STANDARD AREA CODE, OF
INCORPORATION INDUSTRIAL IRS REGISTRANT'S
OR CLASSIFICATION EMPLOYER PRINCIPAL
NAME ORGANIZATION CODE NUMBER ID NO. EXECUTIVE OFFICES
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ON Marine Services Company......... Delaware 4432 34-0158970 *
ONCO Investment Company............ Delaware 1400 34-1888339 *
Oglebay Norton Engineered
Materials, Inc................... Ohio 3297 34-1385659 *
Oglebay Norton Industrial Minerals,
Inc. ............................ Ohio 1400 34-1861207 *
Oglebay Norton Industrial Sands,
Inc. ............................ California 1446 33-0051164 *
Oglebay Norton Terminals, Inc...... Ohio 4432 34-1313796 *
Oglebay Norton Marine Services applied
Company, L.L.C................... Delaware 4432 for *
Colorado Silica Sand, Inc. ........ Colorado 1446 84-0756233 *
Global Stone Corporation........... Ohio 1400 34-1876188 *
Global Stone Chemstone
Corporation...................... Delaware 3274 54-1284052 *
Global Stone Detroit Lime
Company.......................... Delaware 3274 38-3209900 *
Global Stone Filler Products,
Inc. ............................ Delaware 1422 52-2114442 *
Global Stone James River, Inc...... Delaware 3274 52-2151061 *
Global Stone PenRoc Inc............ Delaware 1422 23-2812008 *
Global Stone Port Inland, Inc. .... Michigan 1422 38-3404630 *
Global Stone St. Clair Inc......... Delaware 3274 73-1483284 *
Global Stone Tenn Luttrell
Company.......................... Delaware 3274 23-2054534 *
Global Stone (U.S.A.) Inc.......... Delaware 1400 51-0356498 *
Texas Mining, LP................... Delaware 1446 75-2753902 *
</TABLE>
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* 1100 Superior Avenue, Cleveland, Ohio 44114-2598; (216) 861-3300.
<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. OGLEBAY
NORTON MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND OGLEBAY NORTON IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 14, 1999
PROSPECTUS
$100,000,000
OFFER TO EXCHANGE
ALL OUTSTANDING 10% SENIOR SUBORDINATED NOTES DUE 2009
FOR 10% SENIOR SUBORDINATED NOTES DUE 2009
OF
OGLEBAY NORTON COMPANY
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
CENTRAL TIME, ON , 1999
------------------------
THE REGISTERED NOTES
- The terms of the exchange notes to be issued are substantially identical
to the outstanding notes that a current subsidiary of Oglebay Norton
issued on January 26, 1999, except for transfer restrictions and
registration rights relating to the outstanding notes that will not apply
to the exchange notes.
- Interest on the notes accrues at the rate of 10% per year, payable in
cash every six months on February 1 and August 1, with the first payment
on August 1, 1999.
- The notes are not secured by any collateral.
- The notes are guaranteed by most of the United States subsidiaries of
Oglebay Norton.
MATERIAL TERMS OF THE EXCHANGE OFFER
- Expires at 5:00 p.m., central time, on , 1999, unless
extended.
- The exchange offer is not subject to any condition other than that it
must not violate applicable law or any applicable interpretation of the
Staff of the Securities and Exchange Commission.
- All outstanding notes that are validly tendered and not validly withdrawn
will be exchanged for equal principal amount of exchange notes which are
registered under the Securities Act of 1933.
- Tenders of outstanding notes may be withdrawn at any time prior to the
expiration of the exchange offer.
- Oglebay Norton will not receive any cash proceeds from the exchange
offer.
------------------------
Please consider carefully the "Risk Factors" beginning on page 11 of this
prospectus.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE NOTES TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR
HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this prospectus is , 1999.
<PAGE> 4
I. REFERENCES TO ADDITIONAL INFORMATION
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT OGLEBAY NORTON THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS.
YOU MAY OBTAIN DOCUMENTS THAT ARE FILED BY OGLEBAY NORTON WITH THE SECURITIES
AND EXCHANGE COMMISSION AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS BY
REQUESTING THE DOCUMENTS, IN WRITING OR BY TELEPHONE, FROM THE COMMISSION OR:
OGLEBAY NORTON COMPANY
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2598
ATTENTION: INVESTOR RELATIONS
TELEPHONE: (216) 861-3300
IF YOU WOULD LIKE TO REQUEST COPIES OF THESE DOCUMENTS, PLEASE DO SO BY
, 1999 IN ORDER TO RECEIVE THEM BEFORE THE EXPIRATION OF THE
EXCHANGE OFFER. SEE "XIII. WHERE YOU CAN GET MORE INFORMATION."
2
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TABLE OF CONTENTS
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PAGE
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I. REFERENCES TO ADDITIONAL INFORMATION.......
2
II. SUMMARY.................................... 4
A. Oglebay Norton........................ 4
B. Use of Proceeds....................... 5
C. The Exchange Offer.................... 5
D. The Exchange Notes.................... 8
E. Summary Financial
Information........................... 9
III. RISK FACTORS............................... 11
A. Oglebay Norton's High Level of Debt
May Adversely Affect Its Ability to
Repay the Notes....................... 11
B. Oglebay Norton's Acquisition Strategy
Is Risky.............................. 11
C. Oglebay Norton's Future Performance
Will Depend on Its Ability to Succeed
in the Highly Competitive Mining
Industry.............................. 12
D. Demand for Oglebay Norton's Products
and Services Is Cyclical.............. 12
E. Oglebay Norton Experiences Higher
Levels of Activity in Spring and
Summer................................ 13
F. Oglebay Norton Depends on Significant
Customers............................. 13
G. Oglebay Norton's Notes and Guarantees
are Subordinated to Other Debt........ 13
H. The Indenture and Senior Credit
Facility Contain Restrictive Debt
Covenants that Could Impede Oglebay
Norton's Ability to Obtain Necessary
Financing............................. 13
I. Oglebay Norton Depends on Good Labor
Relations............................. 14
J. Oglebay Norton's Mining Operations are
Subject to Conditions Beyond Our
Control............................... 14
K. Oglebay Norton Must Maintain Adequate
Mineral Reserves...................... 14
L. Oglebay Norton Depends on Its Existing
Vessels Which Require Regular
Maintenance........................... 15
M. Oglebay Norton Is Involved in
Litigation............................ 15
N. Oglebay Norton's Operations May Be
Disrupted Due to the Year 2000
Issue................................. 15
O. Noteholders May Be Impacted by
Original Issue Discount............... 15
P. Guarantors May Not Be Liable for the
Notes Due to Fraudulent Conveyance
Laws.................................. 16
Q. Oglebay Norton May Be Unable to
Repurchase Your Notes Upon a Change of
Control............................... 16
R. There May Not Be a Public Market for
the Notes............................. 16
S. Oglebay Norton Cannot Assure
Compliance with Environmental
Regulations........................... 16
T. If You Do Not Exchange Your
Outstanding Notes You May Have
Difficulty in Transferring Them at a
Later Time............................ 17
U. Oglebay Norton's Holding Company
Structure Causes It to Rely on Funds
From Its Subsidiaries................. 17
V. Oglebay Norton's Forward-Looking
Statements Are Subject to a Variety of
Factors That Could Cause Actual
Results to Differ Materially from
Current Beliefs....................... 17
</TABLE>
<TABLE>
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IV. USE OF PROCEEDS............................ 18
V. CAPITALIZATION............................. 18
VI. THE EXCHANGE OFFER......................... 18
A. Purpose and Effect of the Exchange
Offer................................. 18
B. Resale of the Exchange Notes.......... 19
C. Terms of the Exchange Offer........... 20
D. Expiration Date, Extensions;
Amendments............................ 20
E. Conditions............................ 21
F. Procedures for Tendering.............. 21
G. Book-Entry Transfer................... 23
H. Guaranteed Delivery Procedures........ 24
I. Withdrawal of Tenders................. 24
J. Termination of Certain Rights......... 25
K. Exchange Agent........................ 25
L. Fees and Expenses..................... 25
M. Consequences of Failure to Exchange... 26
N. Accounting Treatment.................. 26
VII. THE EXCHANGE NOTES......................... 26
A. Glossary of Defined Terms............. 27
B. General............................... 43
C. Maturity, Interest and Principal...... 43
D. Optional Redemption................... 44
E. Guarantees............................ 44
F. Subordination of Notes and
Guarantees............................ 45
G. Certain Covenants..................... 47
H. Change of Control Offer............... 56
I. Merger, Consolidation or Sale of
Assets................................ 57
J. Events of Default..................... 58
K. Defeasance and Covenant Defeasance.... 59
L. Modification of Indenture............. 60
M. The Trustee........................... 61
N. No Personal Liability of Directors,
Officers, Employees and
Stockholders.......................... 61
O. Transfer and Exchange................. 61
VIII. THE SENIOR CREDIT FACILITY................. 62
A. General............................... 62
B. Commitment Fee and Interest Rate...... 62
C. Security.............................. 62
D. Certain Covenants..................... 62
E. Events of Default..................... 63
F. Prepayment............................ 63
IX. CERTAIN UNITED STATES FEDERAL TAX
CONSIDERATIONS............................. 63
X. PLAN OF DISTRIBUTION....................... 68
XI. LEGAL MATTERS.............................. 68
XII. EXPERTS.................................... 68
XIII. WHERE YOU CAN GET MORE INFORMATION.........
69
A. Available Information................. 69
B. Incorporation of Documents by
Reference............................. 69
XIV. INDEX TO FINANCIAL STATEMENTS.............. F-1
</TABLE>
3
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II. SUMMARY
This summary highlights basic information about Oglebay Norton and the
exchange offer, but does not contain all information important to you. You
should read the more detailed information and consolidated financial statements
and the related notes appearing elsewhere in this prospectus and incorporated by
reference into this prospectus.
A. OGLEBAY NORTON
Overview
Oglebay Norton was founded in 1854 and is headquartered in Cleveland, Ohio.
We mine, process, transport and market industrial minerals. We serve a broad
customer base in the following industries:
- integrated steel,
- electric utility,
- construction,
- oil drilling,
- glass,
- ceramic,
- environmental,
- chemical,
- recreational, and
- industrial manufacturing.
Our business benefits from long-term relationships with customers who are
market leaders in their industries. We have purchase contracts with many of
these customers that are for more than one year.
In addition, we own high-quality assets, including:
- our well-maintained fleet of marine transportation vessels,
- our recently modernized industrial sands and lime and limestone
extraction equipment and facilities, and
- our strategically located, high-quality industrial sand and limestone
reserves.
As of the date of this prospectus, we:
- operate the largest fleet of self-unloading vessels on the Great Lakes,
transporting iron ore, coal, limestone and other dry bulk cargo between
U.S. ports through our Marine Transportation Division,
- mine and process industrial sands at six operations, located in Ohio and
the southwestern United States, through our Industrial Sands Division,
and
- mine and process limestone and produce lime at nine operations located
throughout the eastern United States and Canada through our Lime and
Limestone Division.
Our Marine Transportation Division is one of four leading providers of
marine transportation between U.S. ports on the Great Lakes. We have an
approximate 20% market share of this market and shipped 23.2 million tons in
1998, compared with 23.8 million in 1997 and 22.1 million in 1996. We believe
that our Industrial Sands Division is the fourth largest producer of industrial
sands in the United States and that our Lime and Limestone Division is the fifth
largest producer of lime in the United States.
4
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In early 1998, our Board of Directors installed a new management team, led
by John N. Lauer, President and Chief Executive Officer and David H. Kelsey,
Vice President and Chief Financial Officer. Since March of 1998, the new
management team has completed the following five acquisitions:
- Global Stone Corporation, a producer and marketer of lime and limestone,
at a purchase price of $225.4 million;
- the Port Inland, Michigan limestone operations of Specialty Minerals
Inc., a subsidiary of Minerals Technologies Inc.;
- Colorado Silica Sand, Inc., an industrial sands producer;
- Filler Products, Inc., a privately owned producer of chemical limestone;
and
- W.S. Frey Company, Inc., a privately owned producer of chemical
limestone, lime and construction aggregates.
The Global Stone acquisition and the acquisitions of Port Inland, Filler
Products and W.S. Frey are part of our overall strategy to capitalize on our
core competencies in the industrial minerals industry by expanding our
operations to include the mining and processing of limestone and the production
of lime.
Reorganization
We reorganized our corporate structure on March 5, 1999. Under this
reorganization, we are now a Delaware holding company. We assumed all
obligations of our subsidiary that issued the outstanding notes, and that
subsidiary agreed to guarantee the outstanding notes and the exchange notes.
B. USE OF PROCEEDS
Oglebay Norton will not receive any cash proceeds from the exchange offer.
C. THE EXCHANGE OFFER
THE EXCHANGE OFFER......... Oglebay Norton offers to exchange $100.0 million in
principal amount of its 10% Senior Subordinated
Notes due February 1, 2009, which have been
registered under the federal securities laws, for
$100.0 million principal amount of its outstanding
unregistered 10% Senior Subordinated Notes due
February 1, 2009, which Oglebay Norton issued on
January 26, 1999 in a private offering. You have
the right to exchange your outstanding notes for
exchange notes with substantially identical terms.
REGISTRATION RIGHTS
AGREEMENT.................. Oglebay Norton exchanged the outstanding notes on
January 26, 1999 with CIBC Oppenheimer Corp. At
that time, Oglebay Norton signed a registration
rights agreement with CIBC Oppenheimer, which
requires Oglebay Norton to conduct this exchange
offer.
This exchange offer is intended to satisfy those
rights set forth in the registration rights
agreement. After the exchange offer is complete,
you will no longer be entitled to registration
rights with respect to outstanding notes that you
do not exchange.
IF YOU FAIL TO EXCHANGE
YOUR OUTSTANDING NOTES..... If you do not exchange your outstanding notes for
exchange notes in the exchange offer, you will
continue to be subject to the restrictions on
transfer provided in the outstanding notes and the
indenture governing those notes. In general, you
may not offer or sell your outstanding notes unless
they are registered under the federal securities
law or are sold in a
5
<PAGE> 8
transaction exempt from or not subject to the
registration requirements of the federal securities
laws and applicable state securities laws.
EXPIRATION DATE............ The exchange offer will expire at 5:00 p.m.,
central time, on 1999, unless Oglebay
Norton decides to extend the expiration date. See
"VI.D. The Exchange Offer -- Expiration Date;
Extensions; Amendments."
CONDITIONS TO THE EXCHANGE
OFFER.................... The exchange offer is subject to conditions that
Oglebay Norton may waive. The exchange offer is not
conditioned upon any minimum amount of outstanding
notes being tendered for exchange. See "VI.E. The
Exchange Offer -- Conditions."
Oglebay Norton reserves the right, subject to
applicable law, at any time and from time to time:
- to extend the exchange offer or to terminate the
exchange offer if specified conditions have not
been satisfied; and
- to amend the terms of the exchange offer in any
manner consistent with the registration rights
agreement.
See "VI.D. The Exchange Offer -- Expiration Date;
Extensions; Amendments."
PROCEDURES FOR TENDERING
OUTSTANDING NOTES........ If you wish to tender your outstanding notes for
exchange, you must:
- complete and sign the enclosed Letter of
Transmittal by following the related
instructions; and
- send the Letter of Transmittal, as directed in
the instructions, together with any other
required documents, to the exchange agent,
either:
(1) with the outstanding notes to be tendered,
or
(2) in compliance with the specified
procedures for guaranteed delivery of the
outstanding notes.
Brokers, dealers, commercial banks, trust companies
and other nominees may also effect tenders by
book-entry transfer.
Please do not send your Letter of Transmittal or
certificates representing your outstanding notes to
Oglebay Norton. Those documents should only be sent
to the exchange agent. Questions regarding how to
tender and requests for information should be
directed to the exchange agent. See "VI.K. The
Exchange Offer -- Exchange Agent."
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS........ If your outstanding notes are registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee, Oglebay Norton urges you
to contact that person promptly if you wish to
tender your outstanding notes in accordance with
the exchange offer. See "VI.F. The Exchange
Offer -- Procedures for Tendering."
WITHDRAWAL RIGHTS.......... You may withdraw the tender of your outstanding
notes at any time prior to the expiration date of
the exchange offer by delivering a written notice
of your withdrawal to the exchange agent. You must
also follow the with-
6
<PAGE> 9
drawal procedures as described under the heading
"VI.I. The Exchange Offer -- Withdrawal of
Tenders."
RESALES OF EXCHANGE
NOTES...................... Oglebay Norton believes that you will be able to
offer for resale, resell or otherwise transfer
exchange notes issued in the exchange offer without
compliance with the registration and prospectus
delivery provisions of the federal securities laws,
provided that:
- you are acquiring the exchange notes in the
ordinary course of business;
- you are not participating, and have no
arrangement or understanding with any person to
participate, in the distribution of the exchange
notes; and
- you are not an affiliate of Oglebay Norton, or if
you are an affiliate, you will comply with the
registration and prospectus delivery requirements
of the Securities Act to the extent applicable.
As defined in Rule 405 of the Securities Act, an
affiliate of Oglebay Norton is a person that
"controls or is controlled by or is under common
control with" Oglebay Norton.
Oglebay Norton's belief is based on interpretations
by the Commission, as set forth in no-action
letters issued to third parties unrelated to
Oglebay Norton. The Staff has not considered this
exchange offer in the context of a no-action
letter, and Oglebay Norton cannot assure you that
the Staff would make a similar determination with
respect to this exchange offer.
If Oglebay Norton's belief is not accurate and you
transfer an exchange note without delivering a
prospectus meeting the requirements of the federal
securities laws or without an exemption from these
laws, you may incur liability under the federal
securities laws. Oglebay Norton does not and will
not assume or indemnify you against this liability.
Each broker-dealer that receives exchange notes for
its own account in exchange for outstanding notes
which were acquired by that broker-dealer as a
result of market-making or other trading activities
must agree to deliver a prospectus meeting the
requirements of the federal securities laws in
connection with any resale of the exchange notes.
See "VI.B. The Exchange Offer -- Resale of the
Exchange Notes."
EXCHANGE AGENT............. The exchange agent for the exchange offer is
Norwest Bank Minnesota, National Association. The
address, telephone number and facsimile number of
the exchange agent are set forth in "VI.K. The
Exchange Offer -- Exchange Agent" and in the Letter
of Transmittal.
See "VI. The Exchange Offer" for more detailed information concerning the
exchange offer.
7
<PAGE> 10
D. THE EXCHANGE NOTES
ISSUER..................... Oglebay Norton Company
1100 Superior Avenue
Cleveland, Ohio 44114-2598
(216) 861-3300
EXCHANGE NOTES............. $100.0 million principal amount of 10% Senior
Subordinated Notes due February 1, 2009.
INTEREST PAYMENT DATES..... Interest on the notes accrues at the rate of 10%
per year, payable in cash every six months on
February 1 and August 1, with the first payment on
August 1, 1999.
RANKING.................... If we default, your right to payment under the
notes is junior to our secured debt and senior debt
and equal to our other unsecured and subordinated
debt.
We owed $210.7 million of senior debt on December
31, 1998 and had additional borrowing capacity of
$32.0 million under our senior credit facility.
The notes are not secured by any collateral.
GUARANTEES................. Most of our existing and future U.S. subsidiaries
have guaranteed payment on the notes. Our foreign
subsidiaries are not guaranteeing payment on the
notes.
If we default, your right to payment under the
guarantees will be junior to secured debt and
senior debt of our U.S. subsidiaries that are
Guarantors and will be equal to their other
unsecured and subordinated debt. The notes are
effectively junior to all liabilities of our
foreign subsidiaries and our U.S. subsidiaries that
are not Guarantors.
The Guarantors owed $210.7 million of senior debt
on December 31, 1998.
OPTIONAL REDEMPTION........ At any time, which may be more than once, before
the third anniversary of the issue date, we can
choose to redeem up to 35% of the outstanding notes
at 110% of their face amount plus accrued but
unpaid interest with money that we raise in one or
more public equity offerings, so long as:
- we give notice of redemption within 60 days of
completing the public equity offering; and
- at least 65% of the notes originally issued
remain outstanding afterwards.
We cannot otherwise redeem the notes before the
fifth anniversary of the issue date. At any time
after that date, which may be more than once, we
can choose to redeem some or all of the notes at a
premium to their face value, plus accrued but
unpaid interest. The premium we will have to pay
will be reduced each year thereafter until the
notes mature.
8
<PAGE> 11
CHANGE OF CONTROL OFFER.... If there is a Change of Control, we must offer to
purchase your notes at 101% of their face amount
plus accrued but unpaid interest.
We might not be able to pay you the required price
for notes you present to us at the time of a Change
of Control, because:
- we might not have enough funds at that time; or
- the terms of our other debt may prevent us from
paying.
ASSET SALE PROCEEDS
OFFER...................... If we sell a defined amount of assets, we must
under defined circumstances offer to purchase your
notes at their face amount plus interest.
CERTAIN INDENTURE
PROVISIONS................. The indenture governing the notes will limit what
we, and most or all of our subsidiaries, may do.
The provisions of the indenture will limit our
ability to:
- incur more debt;
- pay dividends, make distributions or repurchase
stock;
- issue preferred stock of subsidiaries;
- make some kinds of investments;
- create liens;
- enter into transactions with affiliates;
- enter into sale and leaseback transactions;
- merge or consolidate; and
- transfer and sell assets.
There are a number of important exceptions to these
covenants, which are more fully described under
"VII. The Exchange Notes."
See the "VII. The Exchange Notes" for more detailed information concerning
the exchange notes.
E. SUMMARY FINANCIAL INFORMATION
The following table sets forth summary historical financial data of Oglebay
Norton for the years ended December 31, 1994 through 1998. This financial data
has been derived from our audited consolidated financial statements for those
years. As the information presented below is only a summary and does not provide
all of the information contained in our financial statements, you should also
read "Management's Discussion and Analysis of Financial Condition and Results of
Operations," which is incorporated by reference into this prospectus, and our
consolidated financial statements and notes thereto, which are included in this
prospectus.
9
<PAGE> 12
As you read the summary financial information, you should note that for the
purpose of computing the ratio of earnings to fixed charges, earnings is income
from continuing operations before income taxes and fixed charges. Fixed charges
is equal to interest expense.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
(IN THOUSANDS)
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STATEMENT OF OPERATIONS DATA:
Net Sales and Operating Revenues...... $118,509 $126,373 $129,697 $145,185 $238,852
Costs and Expenses
Costs of goods sold and operating
expenses......................... 83,759 88,520 94,396 98,421 157,959
Depreciation, depletion and
amortization..................... 10,928 11,403 11,259 8,947 20,875
General, administrative and selling
expenses......................... 13,452 13,477 12,389 13,352 22,983
-------- -------- -------- -------- --------
108,139 113,400 118,044 120,720 201,817
-------- -------- -------- -------- --------
Income from Operations................ 10,370 12,973 11,653 24,465 37,035
Gain on sale of assets............. 8,003 4,641 3,151 5,548 125
Interest, dividends and other
income........................... 1,388 2,281 2,791 2,693 1,750
Interest expense................... (5,797) (4,147) (3,004) (2,834) (19,280)
Other expense...................... (1,424) (2,492) (2,011) (4,296) (1,935)
-------- -------- -------- -------- --------
Income from Continuing Operations
before Income Taxes................ 12,540 13,256 12,580 25,576 17,695
Income taxes....................... 2,982 2,632 1,541 7,220 5,659
-------- -------- -------- -------- --------
Income from Continuing Operations..... $ 9,558 $ 10,624 $ 11,039 $ 18,356 $ 12,036
======== ======== ======== ======== ========
OTHER DATA:
Ratio of earnings to fixed charges.... 3.2x 4.2x 5.2x 10.0x 1.9x
</TABLE>
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
1998
--------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Working capital........................................... $ 27,311
Total assets.............................................. 565,624
Total debt................................................ 312,066
Stockholders' equity...................................... 126,933
</TABLE>
10
<PAGE> 13
III. RISK FACTORS
You should carefully consider the following risk factors, as well as the
other information in this prospectus, before making an investment in the
exchange notes.
A. OGLEBAY NORTON'S HIGH LEVEL OF DEBT MAY ADVERSELY AFFECT ITS ABILITY TO
REPAY THE NOTES
We are highly leveraged. At December 31, 1998, we had $312.1 million of
indebtedness, representing approximately 71.1% of our total capitalization. See
"V. Capitalization." Furthermore, subject to restrictions in the indenture and
the senior credit facility, we, along with our subsidiaries, may incur
additional indebtedness from time to time to finance acquisitions, provide for
working capital or capital expenditures or for other purposes.
Our high level of indebtedness could have important consequences to the
holders of notes, including, but not limited to, the following:
- limiting our ability to obtain additional financing for acquisitions,
working capital, capital expenditures or other purposes;
- limiting our ability to use operating cash flow in other areas of our
business because we must dedicate a substantial portion of these funds to
make principal payments and fund debt service;
- limiting our ability to borrow additional funds or to dispose of assets;
- limiting our ability to compete with others who are not as highly
leveraged; and
- limiting our ability to react to changing market conditions, changes in
our industry and economic downturns.
We currently expect that we will be able to service our indebtedness out of
cash flow from operations. If we are unable to generate sufficient cash flow to
meet our debt service obligations, we will have to pursue one or more
alternatives. These include reducing or delaying capital expenditures,
refinancing debt, selling assets or raising equity capital. Each of these
alternatives is dependent upon financial, business and other general economic
factors that affect us, many of which are beyond our control. We cannot assure
you that any of these alternatives could be accomplished on satisfactory terms
or that they would yield sufficient funds to retire the notes and the
indebtedness senior to the notes. While we believe that our cash flow from
operations will provide an adequate source of long-term liquidity, a significant
drop in operating cash flows resulting from economic conditions, competition or
other uncertainties beyond our control would increase the need for alternative
sources of liquidity.
B. OGLEBAY NORTON'S ACQUISITION STRATEGY IS RISKY
a. Oglebay Norton's recent acquisitions may require substantial resources
We recently completed the acquisitions of Colorado Silica, Port Inland,
Global Stone, Filler Products and W.S. Frey. Global Stone is the largest company
that we have ever acquired. Although all acquisitions are subject to risk, an
acquisition of the magnitude of Global Stone is inherently subject to
significant risk. These acquisitions may require substantial additional
attention from, and place substantial additional demands upon, our senior
management. This may divert management's attention from and make it more
difficult for them to manage our other businesses. In addition, unanticipated
events or liabilities relating to these acquisitions could have a material
adverse effect on us.
We believe that we will realize substantial benefits from the successful
integration of these acquired businesses. However, we might not be able to
establish, maintain or increase our cash flow or profitability or successfully
integrate any of these acquired businesses into our operations.
b. Oglebay Norton's operations may be affected by future acquisitions
We continually evaluate potential acquisitions and intend to actively
pursue acquisition opportunities, some of which could be material. We may
finance future acquisitions through internally generated funds, bank
11
<PAGE> 14
borrowings, public offerings or private placements of equity or debt securities,
or a combination of these sources. We might not be able to make acquisitions on
terms that are favorable to us. If we do complete any future acquisitions, we
will face many risks, including the possible inability to integrate an acquired
business into our operations, diversion of our management's attention, failure
to retain key acquired personnel and unanticipated problems or liabilities, some
or all of which could have a material adverse effect on us.
C. OGLEBAY NORTON'S FUTURE PERFORMANCE WILL DEPEND ON ITS ABILITY TO SUCCEED IN
THE HIGHLY COMPETITIVE MINING INDUSTRY
a. Oglebay Norton's competitors have greater financial resources
We sell our products and services in highly competitive markets. In many of
our markets, we face competition from large companies that have greater
financial resources than we do and from companies that may develop technology
superior to ours. We believe that for all of our business segments the following
are the most significant competitive considerations:
- price;
- product quality;
- product characteristics;
- location; and
- customer service.
b. Oglebay Norton competes with other modes of transportation and would be
hurt if the Jones Act were repealed
In addition, our Marine Transportation Division must compete with the price
and availability of other modes of transportation, including railroads and
trucks. Our Marine Transportation Division could face additional competitive
pressures if the law known as the Jones Act is repealed. The Jones Act requires
that only U.S.-built and U.S.-owned vessels transport merchandise between U.S.
ports. If the Jones Act is repealed, we may be unable to compete successfully
with new competitors that could enter the market. We expect competitive
pressures in our markets to remain strong.
D. DEMAND FOR OGLEBAY NORTON'S PRODUCTS AND SERVICES IS CYCLICAL
The marine transportation industry on the Great Lakes is cyclical, which
means it experiences increases and decreases in profitability, vessel values and
charter rates. These increases and decreases result mostly from changes in the
demand for Great Lakes shipping. The demand for Great Lakes shipping is
influenced by many factors, including the following:
- global and regional economic conditions;
- changes in transportation patterns;
- changes in weather;
- changes in mineral yields from mines and quarries;
- congestion of the ports and locks serving the Great Lakes;
- construction in the Great Lakes region;
- labor strikes;
- demand for the minerals we ship; and
- price and availability of oil and other fuels.
In addition, demand for us to transport iron ore will be heavily influenced
by the future success of integrated steel producers in the Great Lakes region.
Integrated steel producers make steel from iron ore, rather than beginning with
scrap metal or with partially processed iron.
12
<PAGE> 15
Although the increases and decreases are less severe, the industrial sands
and lime and limestone industries also are cyclical. Demand in the markets
served by these industries is influenced by many factors, including the
following:
- general and regional economic conditions;
- new construction demands;
- population growth rates; and
- government spending on road construction.
E. OGLEBAY NORTON EXPERIENCES HIGHER LEVELS OF ACTIVITY IN SPRING AND SUMMER
Our businesses are seasonal, meaning that we experience higher levels of
activity in some periods of the year than in others. Ordinarily, we are able to
operate our vessels on the Great Lakes for approximately 259 days per year
beginning in early April and continuing through mid-December. However, weather
conditions and customer demand cause increases and decreases in the number of
days we actually operate. Our mining operations experience weaker demand during
the winter months, when weather conditions can affect the road and rail
distribution of products and the use of industrial sands, lime and limestone for
construction.
F. OGLEBAY NORTON DEPENDS ON SIGNIFICANT CUSTOMERS
We received 25.7% of our 1998 revenue from our four largest customers, AK
Steel Holding Corporation, DTE Energy Company, The LTV Corporation and Stelco
Inc. In addition, our Marine Transportation Division received 55.3% of its 1998
operating revenue from AK Steel Holding Corporation, DTE Energy Company and The
LTV Corporation. These customers might not continue to purchase these levels of
our products and services in the future. If any of these or other major
customers substantially reduce or stop purchasing our products or services, we
could suffer a material adverse effect.
G. OGLEBAY NORTON'S NOTES AND GUARANTEES ARE SUBORDINATED TO OTHER DEBT
The notes are subordinate to all Senior Indebtedness and the guarantees are
subordinate to all Guarantor Senior Indebtedness, including existing and future
indebtedness. As of December 31, 1998, we had $210.7 million of Senior
Indebtedness and Guarantor Senior Indebtedness. In addition, as of the same
date, we could have incurred additional Senior Indebtedness of up to $32.0
million under our senior credit facility. In the event of our bankruptcy,
liquidation or dissolution, our assets would not be available to pay obligations
on the notes until we had made all of the payments on our Senior Indebtedness.
Similarly, in the event of bankruptcy, liquidation or dissolution of any
guarantor, its assets would not be available to pay obligations on the notes
until all payments had been made on its Guarantor Senior Indebtedness. After
making these other payments, there might not be sufficient assets remaining to
make any payments on the notes. In addition, some of the events of default under
our Senior Indebtedness would prohibit us from making any payments on the notes.
The terms "Senior Indebtedness" and "Senior Guarantee Indebtedness" are defined
in the "VII.A. The Exchange Notes -- Glossary of Defined Terms" section of this
prospectus.
H. THE INDENTURE AND SENIOR CREDIT FACILITY CONTAIN RESTRICTIVE DEBT COVENANTS
THAT COULD IMPEDE OGLEBAY NORTON'S ABILITY TO OBTAIN NECESSARY FINANCING
The indenture governing the notes will limit what we, and most or all of
our subsidiaries, may do. The provisions of the indenture will limit our ability
to:
- incur more debt;
- pay dividends, make distributions or repurchase stock;
- issue preferred stock of subsidiaries;
- make some kinds of investments;
- create liens;
- enter into transactions with affiliates;
13
<PAGE> 16
- enter into sale and leaseback transactions;
- merge or consolidate; and
- transfer and sell assets.
There are a number of important exceptions to these covenants, which are
more fully described under "VII. The Exchange Notes."
The senior credit facility contains many similar and more stringent
limitations. In addition, it requires us to comply with financial ratios and
tests. If we breach any of these covenants we would default under the senior
credit facility and, as a result, may be prohibited from making any payments to
you. In addition, under defined circumstances, all amounts borrowed under the
senior credit facility, plus interest, may be declared to be due and payable,
which would be an event of default under the indenture. See "VIII. The Senior
Credit Facility."
These restrictions in the indenture and the senior credit facility in
combination with our high level of debt, could limit our ability to respond to
market conditions or meet extraordinary capital needs, or could adversely affect
our ability to finance our future operations or capital needs, or engage in
other business activities which could be in our interest.
I. OGLEBAY NORTON DEPENDS ON GOOD LABOR RELATIONS
We have nine collective bargaining agreements with various labor unions.
These unions represented approximately 60% of our employees as of March 31,
1999. Our agreements with these unions have expiration dates that range from
August 1, 1999 to March 14, 2003. If we are unable to renegotiate acceptable
collective bargaining agreements with these unions, we could experience, among
other things, strikes, work stoppages or other slowdowns by our workers and
increased operating costs as a result of higher wages or benefits paid to our
union employees. Although we consider our current relations with our employees
to be good, if we do not maintain these good relations, we could suffer a
material adverse effect.
J. OGLEBAY NORTON'S MINING OPERATIONS ARE SUBJECT TO CONDITIONS BEYOND OUR
CONTROL
Our mining operations are subject to conditions beyond our control that can
affect the cost of mining and processing at our mines. These conditions include
weather and natural disasters, like heavy rains and flooding, unexpected
maintenance problems, variations in the amount of rock and soil overlying
mineral deposits, variations in geological conditions and other matters. In
recent years, Global Stone's operations were negatively impacted by some of
these events, including flooding and maintenance problems. We cannot predict
whether we will suffer the impact of these and other conditions in the future.
K. OGLEBAY NORTON MUST MAINTAIN ADEQUATE MINERAL RESERVES
Our future success depends, in part, upon our ability to develop or acquire
additional industrial mineral reserves and to profitably extract those reserves.
Although we believe that the depletion of our existing reserves from mining is
unlikely, we cannot state with certainty how long it will be profitable for us
to extract our reserves in the future. To increase our reserves and mining
production, we must continue to develop and acquire reserves. It is very
difficult for us, and for other mining companies, to estimate quantities of
recoverable reserves. Our estimates of reserve data are based on independent
studies as well as our own studies. Our estimates of industrial mineral reserves
and future net cash flows, however, depend upon a number of factors and
assumptions which include:
- historical production from the areas;
- the assumed effects of regulations by governmental agencies;
- assumptions concerning future industrial mineral prices;
- assumptions concerning future operating costs, severance costs and excise
taxes; and
- assumptions concerning development costs and reclamation costs.
14
<PAGE> 17
These factors and assumptions may vary considerably from actual results. For
these reasons, our reserve data may not be accurate. Our actual production,
revenues and expenditures likely will vary from these estimates, and these
variances may be material. As a result, you should not place undue reliance on
the mineral reserve data incorporated by reference into this prospectus. We
cannot assure you that our attempts to maintain adequate reserves in the future
will be successful.
L. OGLEBAY NORTON DEPENDS ON ITS EXISTING VESSELS WHICH REQUIRE REGULAR
MAINTENANCE
Our newest Great Lakes vessel was commissioned in 1981 and our oldest in
1925. The relatively long life of our vessels is due to a scheduled program of
regular winter maintenance, periodic renovation and minimal corrosion because we
operate only in fresh water. However, our vessels depend upon complex mechanical
systems for both propulsion and unloading cargo. If any of these systems fail,
we may be forced to take the affected vessel out of service. If we do this, we
will lose the revenue and earnings associated with that vessel. In general, we
must spend more money to maintain a vessel in good operating condition as the
age of the vessel increases. However, our Great Lakes shipping operations might
not be profitable enough in the future to justify spending the necessary money
on maintenance to keep our vessels in service. In addition, although our vessels
are insured, if we suffer catastrophic damage to a vessel, the insurance
proceeds will not cover the cost of a new vessel. Therefore, if this happens, we
will suffer a permanent loss in cargo capacity and a permanent reduction in
revenue and earnings from our Marine Transportation Division.
M. OGLEBAY NORTON IS INVOLVED IN LITIGATION
We are a defendant in various lawsuits related to our businesses. These
matters include lawsuits relating to the exposure of persons to asbestos and
silica. Although we do not believe that these lawsuits are likely to have a
material adverse effect upon our business, we cannot predict what the full
impact of these or other lawsuits will be.
N. OGLEBAY NORTON'S OPERATIONS MAY BE DISRUPTED DUE TO THE YEAR 2000 ISSUE
We continue to address the impact of the Year 2000 issue on our business.
As part of our Year 2000 program, we have also made efforts to determine and
assess the Year 2000 compliance status of third parties with which we do
business. The Year 2000 issue affects computer systems that have date-sensitive
programs that may not properly recognize the year 2000. Specifically, with
respect to us, this issue affects not only the computer software and hardware
but also machines and equipment used in production that contain embedded
computer chips. If our efforts to address the Year 2000 issue are not
successful, we may experience significant interruptions to our operations.
O. NOTEHOLDERS MAY BE IMPACTED BY ORIGINAL ISSUE DISCOUNT
The notes are issued with original issue discount for United States federal
income tax purposes. Accordingly, some holders of the notes are required to
include original issue discount in gross income for United States federal income
tax purposes in advance of receipt of the cash payments to which the income is
attributable. See "IX. Certain United States Federal Tax Considerations."
In addition, if a bankruptcy case is commenced by or against us under the
United States Bankruptcy Code, the claim of the holder of notes may be limited
to an amount equal to the sum of:
- the price set forth on the cover page of this prospectus, and
- that portion of the original issue discount which is not deemed to
constitute "unmatured interest" for purposes of the United States
Bankruptcy Code.
Any original issue discount that was not accreted as of the date of any
bankruptcy filing would constitute "unmatured interest."
15
<PAGE> 18
P. GUARANTORS MAY NOT BE LIABLE FOR THE NOTES DUE TO FRAUDULENT CONVEYANCE LAWS
Most of our existing and future U.S. subsidiaries have guaranteed the
payment on the notes. Our foreign subsidiaries have not guaranteed payment on
the notes.
Although laws differ among various jurisdictions, in general, under
fraudulent conveyance laws, a court could subordinate or avoid any guarantee if
it found that:
- the guarantee was incurred with actual intent to hinder, delay or defraud
creditors; or
- the guarantor did not receive fair consideration or reasonably equivalent
value for the guarantee and the guarantor was any of the following:
-- insolvent or was rendered insolvent because of the guarantee;
-- engaged in a business or transaction for which its remaining assets
constituted unreasonably small capital; or
-- intended to incur, or believed that it would incur, debts beyond its
ability to pay at maturity.
If a court avoided a guarantee as a result of a fraudulent conveyance, or
held it unenforceable for any other reason, you would cease to have any claim in
respect of that guarantor and would be creditors solely of Oglebay Norton and
any guarantor whose guarantee was not avoided or held unenforceable.
Q. OGLEBAY NORTON MAY BE UNABLE TO REPURCHASE YOUR NOTES UPON A CHANGE OF
CONTROL
If we experience a change of control, we must offer to purchase your notes
at 101% of their face amount, plus accrued but unpaid interest. A change of
control under the indenture will result in a default under the senior credit
facility. In addition, if you exercise your right to require us to purchase the
notes upon a change of control, we might also default under our other
indebtedness because of the financial effect of this type of purchase on us. We
might not be able to pay you the required price for notes you present to us at
the time of a change of control, because we might not have enough funds at that
time or the terms of our other debt may prevent us from paying. See "VII. The
Exchange Notes -- Certain Covenants" and "VIII. The Senior Credit Facility."
R. THERE MAY NOT BE A PUBLIC MARKET FOR THE NOTES
There is no established trading market for the notes. If a market were to
develop, the notes could trade at prices that may be lower than the initial
offering price depending on many factors, including prevailing interest rates,
our operating results and the market for similar securities. As a result, your
ability to resell the notes may be limited. We do not intend to apply for
listing or quotation of the notes on any securities exchange or stock market;
however, we expect that the notes will be able to trade in the Portal Market of
the National Association of Securities Dealers, Inc. See "X. Plan of
Distribution."
S. OGLEBAY NORTON CANNOT ASSURE COMPLIANCE WITH ENVIRONMENTAL REGULATIONS
We are subject to a variety of federal, state, provincial and local
environmental laws and regulations. These laws and regulations control our use,
handling, treatment, storage, discharge, transportation and disposal of
hazardous substances and hazardous wastes used or generated by us in our mining,
processing and marine transportation businesses. In addition, we are subject to
regulations by federal, state, provincial and local authorities on matters
including employee health and safety, permitting and licensing requirements,
plant and wildlife protection, and reclamation and restoration of mining
properties. If we fail to comply with present and future environmental laws and
regulations, we could be subject to future liabilities or our operations could
be interrupted. In addition, future environmental laws and regulations could
restrict our ability to expand our facilities or could require us to acquire
costly equipment or to incur other significant expenses in connection with our
businesses. Although we believe we have made sufficient capital expenditures to
achieve substantial compliance with existing environmental laws and regulations,
you should be aware that other problems identified in the future or future
changes in environmental requirements could have a material adverse effect on
us.
16
<PAGE> 19
T. IF YOU DO NOT EXCHANGE YOUR OUTSTANDING NOTES YOU MAY HAVE DIFFICULTY IN
TRANSFERRING THEM AT A LATER TIME.
Oglebay Norton will issue exchange notes in exchange for the outstanding
notes after the exchange agent receives your outstanding notes, the letter of
transmittal and all related documents. You should allow adequate time for
delivery if you choose to tender your outstanding notes for exchange.
Outstanding notes that are not exchanged will remain subject to restrictions on
transfer and will not have any rights to registration.
If you do participate in the exchange offer for the purpose of
participating in the distribution of the exchange notes, you must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933 for any resale transaction. Each broker-dealer who holds outstanding notes
for its own account due to market-making or other trading activities and who
receives exchange notes for its own account must acknowledge that it will
deliver a prospectus in connection with any resale of the exchange notes. If any
outstanding notes are not tendered in the exchange or are tendered but not
accepted, the trading market for the outstanding notes could be negatively
affected due to the limited number of outstanding notes expected to remain
outstanding following the completion of the exchange offer.
U. OGLEBAY NORTON'S HOLDING COMPANY STRUCTURE CAUSES IT TO RELY ON FUNDS FROM
ITS SUBSIDIARIES
Oglebay Norton is structured as a holding company that directly or
indirectly owns all of the capital stock of its operating subsidiaries. As a
holding company, Oglebay Norton is dependent on dividends or other intercompany
transfers of funds from its subsidiaries to meet Oglebay Norton's debt service
and other obligations. Consequently, Oglebay Norton's cash flow and ability to
service its debt obligations, including the notes, are dependent upon the
earnings of the subsidiaries and the distribution of those earnings to Oglebay
Norton, or upon loans, advances or other payments made by the subsidiaries to
Oglebay Norton. There can be no assurance that the earnings of Oglebay Norton's
subsidiaries will be adequate for Oglebay Norton to meet its debt service
obligations.
V. OGLEBAY NORTON'S FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT
BELIEFS
We make "forward-looking statements" throughout this prospectus. Whenever
you read a statement that is not simply a statement of historical fact, such as
when we describe what we "believe," "expect" or "anticipate" will occur, and
other similar statements, you must remember that our expectations may not be
correct, even though we believe they are reasonable. We do not guarantee that
the transactions and events described in this prospectus will happen as
described, or that they will happen at all. The forward-looking information
contained in this prospectus is generally located in the material set forth
under the headings "Summary" and "Risk Factors," but may be found in other
locations as well. You should read this prospectus completely and with the
understanding that actual future results may be materially different from what
we expect. We will not update these forward-looking statements, even though our
situation will change in the future. We believe that the following factors,
among others, could affect our future performance and cause actual results to
differ materially from those expressed or implied by forward-looking statements
made in this prospectus:
- unfavorable weather conditions;
- fluctuations in oil prices;
- steel production levels;
- changes in the demand for our products or services due to changes in
technology;
- Great Lakes and Mid-Atlantic construction activity;
- the California economy and population growth rates in the Southwestern
United States;
- labor unrest;
- the loss or bankruptcy of major customers; and
- year 2000 software conversion failures of vendors, suppliers and
customers.
17
<PAGE> 20
IV. USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange
notes. Because Oglebay Norton is exchanging the exchange notes for the
outstanding notes, which have substantially identical terms, the issuance of the
exchange notes will not result in any increase in the indebtedness of Oglebay
Norton.
V. CAPITALIZATION
The following table sets forth at December, 31, 1998 our cash and cash
equivalents and capitalization. This information should be read in conjunction
with the consolidated financial statements and the related notes included in
this prospectus. You should also read the description of the Senior Credit
Facility included in this prospectus.
<TABLE>
<CAPTION>
DECEMBER 31,
1998
--------------
(IN THOUSANDS)
<S> <C>
Cash and cash equivalents....................... $ 1,940
========
Total debt:
Senior Credit Facility........................ $171,000
Other......................................... 41,066
Senior subordinated notes..................... 100,000
--------
Total debt............................ 312,066
Total stockholders' equity...................... 126,933
--------
Total capitalization.................. $438,999
========
</TABLE>
Total debt in the table above includes current maturities of $9.5
million.
VI. THE EXCHANGE OFFER
A. PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On January 26, 1999, Oglebay Norton exchanged $100.0 million in principal
amount at maturity of the outstanding notes in a private exchange with CIBC
Oppenheimer. CIBC Oppenheimer sold the outstanding notes to a limited number of
"Qualified Institutional Buyers," as defined under the Securities Act of 1933.
In connection with the exchange of the outstanding notes, Oglebay Norton and
CIBC Oppenheimer entered into a registration rights agreement, dated as of
February 1, 1999. Under that agreement, Oglebay Norton must, among other things,
use its reasonable best efforts to file with the Commission a registration
statement under the Securities Act of 1933 covering the exchange offer and to
cause that registration statement to become and remain effective under the
Securities Act of 1933. Upon the effectiveness of that registration statement,
Oglebay Norton must also offer each holder of the outstanding notes the
opportunity to exchange its securities for an equal principal amount at maturity
of exchange notes. You are a holder with respect to the exchange offer if you
are a person in whose name any outstanding notes are registered on Oglebay
Norton's books or any other person who has obtained a properly completed
assignment of outstanding notes from the registered holder.
Oglebay Norton is making the exchange offer to comply with its obligations
under the registration rights agreement. A copy of the registration rights
agreement has been filed as an exhibit to the registration statement of which
this prospectus is a part.
In order to participate in the exchange offer, you must represent to
Oglebay Norton, among other things, that:
- the exchange notes being acquired in accordance with the exchange offer
are being obtained in the ordinary course of business of the person
receiving the exchange notes,
- neither you nor any other person with whom you have any arrangement or
understanding is engaging in or intends to engage in a distribution of
those exchange notes,
- you are not an affiliate of Oglebay Norton. An affiliate is any person
who "controls or is controlled by or is under common control with"
Oglebay Norton,
18
<PAGE> 21
- if you are an affiliate of Oglebay Norton, you will comply with
requirements of the Securities Act of 1933 applicable to affiliates, and
- you are not acting on behalf of any person who could not truthfully make
these representations.
B. RESALE OF THE EXCHANGE NOTES
Based on a previous interpretation by the Staff of the Commission set forth
in no-action letters issued to third parties, including Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated
(available June 5, 1991), Mary Kay Cosmetics, Inc. (available June 5, 1991),
Warnaco, Inc. (available October 11, 1991), and K-111 Communications Corp.
(available May 14, 1993), Oglebay Norton believes that the exchange notes issued
in the exchange offer may be offered for resale, resold, and otherwise
transferred by you, except if you are an affiliate of Oglebay Norton, without
compliance with the registration and prospectus delivery provisions of the
Securities Act of 1933, provided that the representations set forth in "--
Purpose and Effect of the Exchange Offer" apply to you. The Staff has not
considered this exchange in the context of a no-action letter, and Oglebay
Norton cannot assure you that the Staff would make a similar determination with
respect to the exchange offer.
If you tender in the exchange offer with the intention of participating in
a distribution of the exchange notes, you cannot rely on the interpretation by
the Staff of the Commission as set forth in no-action letters described above
issued to third parties unrelated to Oglebay Norton and you must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with a secondary resale transaction. In the event that Oglebay
Norton's belief regarding resale is inaccurate, those who transfer exchange
notes in violation of the prospectus delivery provisions of the Securities Act
of 1933 and without an exemption from registration under the federal securities
laws may incur liability under these laws. Oglebay Norton does not and will not
assume or indemnify you against this liability.
The exchange offer is not being made to, nor will Oglebay Norton accept
surrenders for exchange from, holders of outstanding notes in any jurisdiction
in which the exchange offer or the acceptance of the exchange offer would not be
in compliance with the securities or blue sky laws of the particular
jurisdiction. Each broker-dealer that receives exchange notes for its own
account in exchange for outstanding notes, where the outstanding notes were
acquired by that broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of the exchange notes. In order to facilitate the
disposition of exchange notes by broker-dealers participating in the exchange
offer, Oglebay Norton has agreed to make a reasonable number of copies of this
prospectus, as it may be amended or supplemented from time to time, available
for delivery by those broker-dealers to satisfy their prospectus delivery
obligations under the Securities Act of 1933.
Any holder that is a broker-dealer participating in the exchange offer must
comply with the procedures set forth for broker-dealers in the enclosed Letter
of Transmittal. Under the registration rights agreement, Oglebay Norton is not
required to amend or supplement the prospectus for a period exceeding 180 days
after the expiration date of the exchange offer, except in limited circumstances
where Oglebay Norton suspends use of the registration statement. Oglebay Norton
may suspend use of the registration statement if:
- an order suspending the effectiveness of the registration statement or
preventing the use of any prospectus is entered, or any proceeding is
initiated to obtain this type of order,
- Oglebay Norton receives notice that the qualification or exemption from
qualification of the registration statement or any of the exchange notes
to be sold by any broker-dealer for offer or sale in any jurisdiction has
been suspended, or any proceeding is initiated or threatened to obtain a
suspension,
- any information becomes known that makes any statement made in the
registration statement, prospectus or any document incorporated by
reference in either, untrue in any material respect, or that requires
changes in, or amendments to any of these documents to correct or clarify
the statement,
- Oglebay Norton determines that a post-effective amendment to the
registration statement is appropriate.
Oglebay Norton has not entered into any arrangement or understanding with any
person to distribute the exchange notes to be received in the exchange offer.
See "X. Plan of Distribution."
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C. TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal, Oglebay Norton will accept any and all
outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., central
time, on the day the exchange offer expires.
As of the date of this prospectus, $100.0 million in principal amount at
maturity of the notes are outstanding. This prospectus, together with the Letter
of Transmittal, is being sent to all registered holders of the outstanding notes
on this date. There will be no fixed record date for determining registered
holders of the outstanding notes entitled to participate in the exchange offer,
however, holders of the outstanding notes must tender their certificates
therefor or cause their outstanding notes to be tendered by book-entry transfer
prior to the expiration date of the exchange offer to participate.
The form and terms of the exchange notes will be the same as the form and
terms of the outstanding notes except that the exchange notes will be registered
under the Securities Act of 1933 and therefore will not bear legends restricting
their transfer. Following consummation of the exchange offer, all rights under
the registration rights agreement accorded to holders of outstanding notes,
including the right to receive additional incremental interest on the
outstanding notes, to the extent and in the circumstances specified in the
registration rights agreement, will terminate.
Oglebay Norton intends to conduct the exchange offer in accordance with the
provisions of the registration rights agreement and applicable federal
securities laws. Outstanding notes that are not tendered for exchange under the
exchange offer will remain outstanding and will be entitled to the rights under
the related indenture. Any outstanding notes not tendered for exchange will not
retain any rights under the registration rights agreement and will remain
subject to transfer restrictions. See "-- Consequences of Failure to Exchange."
Oglebay Norton will be deemed to have accepted validly tendered outstanding
notes when, as and if Oglebay Norton will have given oral or written notice of
its acceptance to the exchange agent. The exchange agent will act as agent for
the tendering holders for the purposes of receiving the exchange notes from
Oglebay Norton. If any tendered outstanding notes are not accepted for exchange
because of an invalid tender, the occurrence of other events set forth in this
prospectus, or otherwise, certificates for any unaccepted outstanding notes will
be returned, or, in the case of outstanding notes tendered by book-entry
transfer, those unaccepted outstanding notes will be credited to an account
maintained with The Depository Trust Company, without expense to the tendering
holder of those outstanding notes as promptly as practicable after the
expiration date of the exchange offer. See "-- Procedures for Tendering."
Those who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange in
accordance with the exchange offer. Oglebay Norton will pay all charges and
expenses, other than applicable taxes described below, in connection with the
exchange offer. See "-- Fees and Expenses."
D. EXPIRATION DATE, EXTENSIONS; AMENDMENTS
The expiration date is 5:00 p.m., central time on , 1999,
unless Oglebay Norton, in its sole discretion, extends the exchange offer, in
which case, the expiration date will be the latest date and time to which the
exchange offer is extended. Oglebay Norton must use its reasonable best efforts
to consummate the exchange offer on or prior to the 60th day following the date
the registration statement is declared effective.
To extend the exchange offer, Oglebay Norton must notify the exchange agent
by oral or written notice prior to 9:00 a.m., Eastern Standard Time, on the next
business day after the previously scheduled expiration date and make a public
announcement of the extension.
Oglebay Norton reserves the right:
- to extend the exchange offer or to terminate the exchange offer if any of
the conditions set forth below under "-- Conditions" are not satisfied by
giving oral or written notice of the extension or termination to the
exchange agent; or
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<PAGE> 23
- to amend the terms of the exchange offer in any manner consistent with
the registration rights agreement.
Any delay in acceptances, extension, termination, or amendment will be
followed as promptly as practicable by oral or written notice of the delay to
the registered holders of the outstanding notes. If Oglebay Norton amends the
exchange offer in a manner that constitutes a material change, Oglebay Norton
will promptly disclose the amendment by means of a prospectus supplement that
will be distributed to the registered holders of the outstanding notes, and
Oglebay Norton will extend the exchange offer for a period of five to ten
business days, depending upon the significance of the amendment and the manner
of disclosure to the registered holders of the outstanding notes, if the
exchange offer would otherwise expire during the five to ten business day
period.
Without limiting the manner in which Oglebay Norton may choose to make a
public announcement of any delay, extension, amendment, or termination of the
exchange offer, Oglebay Norton will have no obligation to publish, advertise, or
otherwise communicate that public announcement, other than by making a timely
release to an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the exchange offer,
Oglebay Norton will accept, promptly after the expiration date of the exchange
offer, all outstanding notes properly tendered and will issue the exchange notes
promptly after acceptance of the outstanding notes. See "-- Conditions" below.
For purposes of the exchange offer, Oglebay Norton will be deemed to have
accepted properly tendered outstanding notes for exchange when, as and if
Oglebay Norton will have given oral or written notice of its acceptance to the
exchange agent.
In all cases, issuance of the exchange notes for outstanding notes that are
accepted for exchange in accordance with the exchange offer will be made only
after timely receipt by the exchange agent of certificates for those outstanding
notes or a timely confirmation of book-entry transfer of the outstanding notes
into the exchange agent's account at The Depository Trust Company, a properly
completed and duly executed Letter of Transmittal, and all other required
documents; provided, however, that Oglebay Norton reserves the absolute right to
waive any defects or irregularities in the tender of outstanding notes or in the
satisfaction of conditions of the exchange offer by holders of the outstanding
notes. If any tendered outstanding notes are not accepted for any reason set
forth in the terms and conditions of the exchange offer, if the holder withdraws
the previously tendered outstanding notes, or if outstanding notes are submitted
for a greater principal amount of outstanding notes than the holder desires to
exchange, then the unaccepted, withdrawn or portion of non-exchanged outstanding
notes, as appropriate, will be returned as promptly as practicable after the
expiration or termination of the exchange offer, or, in the case of outstanding
notes tendered by book-entry transfer, those unaccepted, withdrawn or portion of
non-exchanged outstanding notes, as appropriate, will be credited to an account
maintained with The Depository Trust Company, without expense to the tendering
holder of these outstanding notes.
E. CONDITIONS
Without regard to other terms of the exchange offer, Oglebay Norton will
not be required to exchange any exchange notes for any outstanding notes and may
terminate the exchange offer before the acceptance of any outstanding notes for
exchange, if:
- the exchange offer is not registered under the Securities Act of 1933 on
the appropriate form, or
- the exchange offer fails to comply with all applicable rules and
regulations under the Exchange Act.
If Oglebay Norton determines that either of these conditions are not
satisfied, Oglebay Norton may refuse to accept any outstanding notes and return
all tendered outstanding notes to the tendering holders, or, in the case of
outstanding notes tendered by book-entry transfer, credit those outstanding
notes to an account maintained with The Depository Trust Company
F. PROCEDURES FOR TENDERING
To tender in the exchange offer, you must complete, sign and date an
original or facsimile Letter of Transmittal, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
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deliver the Letter of Transmittal to the exchange agent prior to the expiration
date of the exchange offer. In addition, either:
- certificates for the outstanding notes must be received by the exchange
agent, along with the Letter of Transmittal, or
- a timely confirmation of transfer by book-entry of those outstanding
notes, if the book-entry procedure is available, into the exchange
agent's account at The Depository Trust Company, as set forth in the
procedure for book-entry transfer described below, which the exchange
agent must receive prior to the expiration date of the exchange offer, or
- you must comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive the Letter of
Transmittal and other required documents at the address set forth below under
"-- Exchange Agent" prior to the expiration of the exchange offer.
If you tender your outstanding notes and do not withdraw them prior to the
expiration date of the exchange offer, you will be deemed to have an agreement
with Oglebay Norton in accordance with the terms and subject to the conditions
set forth in this prospectus and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR RISK. INSTEAD
OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE OF
THE EXCHANGE OFFER. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT
TO OGLEBAY NORTON. YOU MAY REQUEST YOUR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES, OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company, or other nominee and who
wishes to tender its outstanding notes should contact the registered holder
promptly and instruct that registered holder to tender the outstanding notes on
the beneficial owner's behalf. If the beneficial owner wishes to tender its
outstanding notes on the owner's own behalf, that owner must, prior to
completing and executing the Letter of Transmittal and delivering its
outstanding notes, either make appropriate arrangements to register ownership of
the outstanding notes in that owner's name or obtain a properly completed
assignment from the registered holder. The transfer of registered ownership of
outstanding notes may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an eligible institution, unless the
outstanding notes are tendered:
- by a registered holder who has not completed the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal, or
- for the account of an eligible institution.
In the event that signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, each of the
following is deemed an eligible institution:
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
- commercial bank,
- trust company having an office or correspondent in the United States, or
- eligible guarantor institution as provided by Rule 17Ad-15 of the
Securities Exchange Act of 1934.
If the Letter of Transmittal is signed by a person other than the
registered holder of any outstanding notes, the outstanding notes must be
endorsed or accompanied by a properly completed bond power, signed by the
registered holder as his, her or its name appears on the outstanding notes.
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<PAGE> 25
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the Letter of Transmittal or any outstanding notes or bond power,
those persons should so indicate when signing, and unless Oglebay Norton waives
evidence satisfactory to Oglebay Norton of their authority to so act this
evidence must be submitted with the Letter of Transmittal.
Oglebay Norton will determine all questions as to the validity, form,
eligibility, including time of receipt, acceptance of tendered outstanding
notes, and withdrawal of tendered outstanding notes, in its sole discretion. All
of these determinations by Oglebay Norton will be final and binding. Oglebay
Norton reserves the absolute right to reject any and all outstanding notes not
properly tendered or any outstanding notes Oglebay Norton's acceptance of which
would, in the opinion of counsel for Oglebay Norton, be unlawful. Oglebay Norton
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular outstanding notes. Oglebay Norton's interpretation of
the terms and conditions of the exchange offer, including the instructions in
the Letter of Transmittal will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within the time Oglebay Norton determines. Although Oglebay
Norton intends to notify holders of outstanding notes of defects or
irregularities with respect to tenders of outstanding notes, neither Oglebay
Norton, nor the exchange agent, or any other person will incur any liability for
failure to give this notification. Tenders of outstanding notes will not be
deemed to have been made until defects or irregularities have been cured or
waived. Any outstanding notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the exchange agent to the tendering holders
of outstanding notes, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the expiration date of the exchange offer.
In addition, Oglebay Norton reserves the right, in its sole discretion, to
purchase or make offers for any outstanding notes that remain outstanding
subsequent to the expiration date of the exchange offer or, as set forth above
under "-- Conditions," to terminate the exchange offer and, to the extent
permitted by applicable law and the terms of its agreements relating to its
outstanding indebtedness, purchase outstanding notes in the open market, in
privately negotiated transactions or otherwise. The terms of any purchases or
offers could differ from the terms of the exchange offer.
If the holder of outstanding notes is a broker-dealer participating in the
exchange offer that will receive exchange notes for its own account in exchange
for outstanding notes that were acquired as a result of market-making activities
or other trading activities, that broker-dealer will be required to acknowledge
in the Letter of Transmittal that it will deliver a prospectus in connection
with any resale of the exchange notes and otherwise agree to comply with the
procedures described above under "-- Resale of the Exchange Notes"; however, by
so acknowledging and delivering a prospectus, that broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act of 1933.
In all cases, issuance of exchange notes in accordance with the exchange
offer will be made only after timely receipt by the exchange agent of
certificates for the outstanding notes or a timely confirmation of book entry
transfer of outstanding notes into the exchange agent's account at The
Depository Trust Company, a properly completed and duty executed Letter of
Transmittal, and all other required documents. If any tendered outstanding notes
are not accepted for any reason set forth in the terms and conditions of the
exchange offer or if outstanding notes are submitted for a greater principal
amount of outstanding notes than the holder of outstanding notes desires to
exchange, the unaccepted or portion of non-exchanged outstanding notes will be
returned as promptly as practicable after the expiration or termination of the
exchange offer, or, in the case of outstanding notes tendered by book-entry
transfer into the exchange agent's account at The Depository Trust Company in
accordance with the book-entry transfer procedures described below, the
unaccepted or portion of non-exchanged outstanding notes will be credited to an
account maintained with The Depository Trust Company, without expense to the
tendering holder of outstanding notes.
G. BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the outstanding notes at The Depository Trust Company for the purposes of the
exchange offer within two business days after the date of this prospectus, and
any financial institution that is a participant in The Depository Trust
Company's systems may
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<PAGE> 26
make book-entry delivery of outstanding notes by causing The Depository Trust
Company to transfer the outstanding notes into the exchange agent's account at
The Depository Trust Company in accordance with The Depository Trust Company's
procedures for transfer. However, although delivery of outstanding notes may be
effected through book-entry transfer at The Depository Trust Company, the Letter
of Transmittal or facsimile of the Letter of Transmittal, with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received by the exchange agent at the address set forth below
under "-- Exchange Agent" on or prior to the expiration date of the exchange
offer, unless the holder complies with the guaranteed delivery procedures
described below.
H. GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and (1) whose
outstanding notes are not immediately available or (2) who cannot deliver their
outstanding notes, the Letter of Transmittal, or any other required documents to
the exchange agent prior to the expiration date, may effect a tender if:
- The tender is made through an eligible institution;
- Prior to the expiration date of the exchange offer, the exchange agent
receives from that eligible institution a properly completed and duly
executed Notice of Guaranteed Delivery, by facsimile transmission, mail
or hand delivery, setting forth the name and address of the holder, the
certificate number(s) of the outstanding notes and the principal amount
of outstanding notes tendered and stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange
trading days after the expiration date of the exchange offer, the Letter
of Transmittal, together with the certificate(s) representing the
outstanding notes in proper form for transfer or a confirmation of
book-entry transfer, as the case may be, and any other documents required
by the Letter of Transmittal will be deposited by the eligible
institution with the exchange agent; and
- The exchange agent receives the properly completed and executed Letter of
Transmittal, as well as the certificate(s) representing all tendered
outstanding notes in proper form for transfer and other documents
required by the Letter of Transmittal within three New York Stock
Exchange trading days after the expiration date of the exchange offer.
Upon request to the exchange agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
I. WITHDRAWAL OF TENDERS
Except as otherwise provided, tenders of outstanding notes may be withdrawn
at any time prior to 5:00 p.m., central time, on the expiration date of the
exchange offer.
To withdraw a tender of outstanding notes in the exchange offer, a written
or facsimile transmission notice of withdrawal must be received by the exchange
agent at its address set forth herein prior to 5:00 p.m., central time, on the
expiration date of the exchange offer. Any notice of withdrawal must:
- specify the name of the person having deposited the outstanding notes to
be withdrawn,
- identify the outstanding notes to be withdrawn,
- be signed by the holder in the same manner as the original signature on
the Letter of Transmittal by which the outstanding notes were tendered or
be accompanied by documents of transfer sufficient to have the exchange
agent register the transfer of the outstanding notes in the name of the
person withdrawing the tender, and
- specify the name in which any outstanding notes are to be registered, if
different from that of the person who deposited the outstanding notes to
be withdrawn.
Oglebay Norton will determine all questions as to the validity, form, and
eligibility of the notices, and that determination will be final and binding on
all parties. Any outstanding notes so withdrawn will be deemed not to
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<PAGE> 27
have been validly tendered for purposes of the exchange offer, and no exchange
notes will be issued with respect to those outstanding notes unless the
outstanding notes so withdrawn are validly retendered.
Any outstanding notes that have been tendered but that are not accepted for
payment will be returned to the holder of those outstanding notes, or in the
case of outstanding notes tendered by book-entry transfer, will be credited to
an account maintained with The Depository Trust Company, without cost to the
holder as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn outstanding notes may be
retendered by following one of the procedures described above under "--
Procedures for Tendering" at any time prior to the expiration date of the
exchange offer.
J. TERMINATION OF CERTAIN RIGHTS
All rights given to holders of outstanding notes under the registration
rights agreement will terminate upon the consummation of the exchange offer
except with respect to Oglebay Norton's duty:
- to keep the registration statement effective until the closing of the
exchange offer and for a period not to exceed 180 days after the
expiration date of the exchange offer, and
- to provide a reasonable number of copies of the latest version of this
prospectus to any broker-dealer that requests copies of this prospectus
for use in connection with any resale by that broker-dealer of exchange
notes received for its own account in accordance with the exchange offer
in exchange for outstanding notes acquired for its own account as a
result of market-making or other trading activities, subject to the
conditions described above under "-- Resale of the Exchange Notes."
K. EXCHANGE AGENT
Norwest Bank Minnesota, National Association has been appointed exchange
agent for the exchange offer. Questions and requests for assistance, requests
for additional copies of this prospectus or the Letter of Transmittal, and
requests for copies of the Notice of Guaranteed Delivery with respect to the
outstanding notes should be addressed to the exchange agent as follows:
<TABLE>
<S> <C> <C>
BY REGISTERED OR BY HAND DELIVERY OR IN PERSON:
CERTIFIED MAIL OVERNIGHT COURIER:
Norwest Bank Minnesota, Norwest Bank Minnesota, Norwest Bank Minnesota,
National Association National Association National Association
Corporate Trust Operations Corporate Trust Operations Northstar East Bldg.
P.O. Box 1517 Norwest Center 608 2(nd) Ave. S.
Minneapolis, MN 55480-1517 Sixth and Marquette 12(th) Floor
Minneapolis, MN 55479-0113 Corporate Trust Services
Minneapolis, MN 55479-0113
</TABLE>
BY FACSIMILE:
(612) 667-4927
CONFIRM BY TELEPHONE
(612) 667-9764
L. FEES AND EXPENSES
Oglebay Norton will pay the expenses of soliciting tenders in connection
with the exchange offer. The principal solicitation is being made by mail;
however, additional solicitation may be made by telecopier, telephone, or in
person by officers and regular employees of Oglebay Norton and its affiliates.
Oglebay Norton has not retained any dealer-manager in connection with the
exchange offer and will not make any payments to broker-dealers or others
soliciting acceptances of the exchange offer. Oglebay Norton, however, will pay
the exchange agent reasonable and customary fees for its services and will
reimburse the exchange agent for its reasonable out-of-pocket expenses in
connection with the exchange offer.
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Oglebay Norton estimates that its cash expenses in connection with the
exchange offer will be approximately $ . These expenses include
registration fees, fees and expenses of the exchange agent, accounting and legal
fees, and printing costs, among others.
Oglebay Norton will pay all transfer taxes, if any, applicable to the
exchange of the outstanding notes for exchange notes. The tendering holder of
outstanding notes, however, will pay applicable taxes if certificates
representing outstanding notes not tendered or accepted for exchange are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of outstanding notes tendered, or
- if tendered, the certificates representing outstanding notes are
registered in the name of any person other than the person signing the
Letter of Transmittal, or
- if a transfer tax is imposed for any reason other than the exchange of
the outstanding notes in the exchange offer.
If satisfactory evidence of payment of the transfer taxes or exemption from
payment of transfer taxes is not submitted with the Letter of Transmittal, the
amount of the transfer taxes will be billed directly to the tendering holder and
the exchange notes may not be delivered until the transfer taxes are paid.
M. CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. Holders of the
outstanding notes are urged to consult their financial and tax advisors in
making their own decisions on what action to take.
Outstanding notes that are not exchanged for the exchange notes in the
exchange offer will not have any rights under the registration rights agreement
and will remain restricted securities for purposes of the federal securities
laws. Accordingly, the outstanding notes may not be offered, sold, pledged, or
otherwise transferred except in accordance with applicable securities laws:
- to Oglebay Norton or any subsidiary of Oglebay Norton;
- to a "Qualified Institutional Buyer" within the meaning of Rule 144A
under the Securities Act of 1933 purchasing for its own account or for
the account of a qualified institutional buyer in a transaction meeting
the requirements of Rule 144A;
- in an offshore transaction complying with Rule 904 of Regulation S under
the Securities Act of 1933;
- in accordance with an exemption from registration under the Securities
Act of 1933 provided by Rule 144 thereunder, if available;
- to "Institutional Accredited Investors" in a transaction exempt from the
registration requirements of the Securities Act of 1933; or
- in accordance with an effective registration statement under the
Securities Act of 1933.
N. ACCOUNTING TREATMENT
For accounting purposes, Oglebay Norton will recognize no gain or loss as a
result of the exchange offer. The exchange notes will be recorded at the same
carrying value as the outstanding notes, as reflected in Oglebay Norton's
accounting records on the date of the exchange. The expenses of the exchange
offer will be amortized over the remaining term of the exchange notes.
VII. THE EXCHANGE NOTES
The outstanding notes were, and the exchange notes will be, issued under an
indenture, dated as of February 1, 1999, by and among Oglebay Norton, the
Guarantors and Norwest Bank Minnesota, National Association, as trustee. The
terms of the notes include those stated in the indenture and those made part of
the indenture by reference to the Trust Indenture Act of 1939 (the "TIA"). The
notes are subject to all the terms of the indenture and the TIA, and Holders of
the notes are referred to the indenture and the TIA for a statement of
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these terms. The following is a summary of the material terms and provisions of
the notes. This summary does not purport to be a complete description of the
notes and is subject to the detailed provisions of, and qualified in its
entirety by reference to, the notes and the indenture, including the definitions
contained therein. A copy of the form of indenture may be obtained from Oglebay
Norton by any Holder or prospective investor upon request. As used in this
section, the term "Oglebay Norton" refers to Oglebay Norton Company and not any
of its subsidiaries. Definitions relating to some of the capitalized terms are
set forth under "-- Glossary of Defined Terms." Capitalized terms that are used
but not otherwise defined in this prospectus have the meanings ascribed to them
in the indenture.
A. GLOSSARY OF DEFINED TERMS
The following is a glossary of defined terms substantially as used in the
indenture. Reference is made to the terms of the notes and the indenture for the
full definition of all terms, including those below, as well as any other
capitalized terms used in this prospectus for which no definition is provided.
"Acquired Indebtedness" means Indebtedness of a Person:
(1) assumed in connection with an Asset Acquisition from that Person,
or
(2) existing at the time that Person becomes a Restricted Subsidiary
or is merged or consolidated with or into Oglebay Norton or any Restricted
Subsidiary;
provided, however, that this Indebtedness was not incurred in connection with,
or in contemplation of, the above referenced Asset Acquisition, that Person
becoming a Restricted Subsidiary or the above referenced merger or
consolidation.
"Additional Interest" has the meaning provided in Section 4(a) of the
registration rights agreement.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of
the amount by which:
(1) the fair value of the property of that Guarantor exceeds the total
amount of liabilities, including, without limitation, contingent
liabilities, after giving effect to all other fixed and contingent
liabilities, but excluding liabilities under the Guarantee, of that
Guarantor at that date, and
(2) the present fair salable value of the assets of that Guarantor at
that date exceeds the amount that will be required to pay the probable
liability of that Guarantor on its debts, after giving effect to all other
fixed and contingent liabilities and after giving effect to any collection
from any Subsidiary of that Guarantor in respect of the obligations of that
Guarantor under the Guarantee, excluding Indebtedness in respect of the
Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with that specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management or
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing. Affiliates of any Person shall include each
director or executive officer of that Person and each other Person that
beneficially owns 10% or more of the Voting Equity Interests of that Person.
"amend" means amend, modify, supplement, restate or amend and restate,
including successively; and "amending" and "amended" have correlative meanings.
"Asset Acquisition" means:
(1) any capital contribution, by means of transfers of cash or other
property to others or payments for property or services for the account or
use of others, or otherwise, by Oglebay Norton or any Restricted Subsidiary
to any other Person, or any acquisition or purchase of Equity Interests of
any other Person by Oglebay Norton or any Restricted Subsidiary, in either
case, in accordance with which that Person shall become a Restricted
Subsidiary or shall be consolidated or merged with or into Oglebay Norton
or any Restricted Subsidiary, or
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(2) any acquisition by Oglebay Norton or any Restricted Subsidiary of
the assets of any Person which constitute all or substantially all of an
operating unit or line of business of that Person or which is otherwise
outside of the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
that has the effect of a disposition, or other disposition, including, without
limitation, by way of any merger, consolidation or Sale and Leaseback
Transaction, to any Person other than Oglebay Norton or a Wholly Owned
Restricted Subsidiary, in one transaction or a series of related transactions,
of:
(1) any Equity Interest of any Restricted Subsidiary, or
(2) other than in the ordinary course of business, any other property
or asset of Oglebay Norton or any Restricted Subsidiary, including the
receipt of proceeds paid on account of the loss of or damage to any
property or asset and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceedings.
The term "Asset Sale" shall not include:
(1) any transaction consummated in compliance with "-- Merger,
Consolidation or Sale of Assets"; provided, however, that any transaction
consummated in compliance with "-- Merger, Consolidation or Sale of Assets"
involving a sale, conveyance, assignment, transfer, lease or other disposal
of less than all of the properties or assets of Oglebay Norton and the
Restricted Subsidiaries shall be deemed to be an Asset Sale with respect to
the properties or assets of Oglebay Norton and Restricted Subsidiaries that
are not so sold, conveyed, assigned, transferred, leased or otherwise
disposed of in the transaction;
(2) sales of property or equipment that has become worn out, obsolete
or damaged or otherwise unsuitable for use in the business of Oglebay
Norton or any Restricted Subsidiary, as the case may be; and
(3) any Permitted Investment and any Restricted Payment permitted by
"-- Certain Covenants -- Limitation on Restricted Payments". In addition,
solely for purposes of "-- Certain Covenants -- Limitation on Certain Asset
Sales", sales, conveyances, transfers, leases or other dispositions of
properties or assets in a single transaction or series of transactions
involving assets with a fair market value of less than $2.0 million shall
be deemed not to be an Asset Sale.
"Attributable Indebtedness" in respect of a Sale and Leaseback Transaction
means, as at the time of determination, the greater of:
(1) the fair value of the property subject to the arrangement, as
determined by the Board of Directors of Oglebay Norton, and
(2) the present value of the total obligations, discounted at a rate
of 10%, compounded annually, of the lessee for rental payments during the
remaining term of the lease included in the Sale and Leaseback Transaction,
including any period for which the lease has been extended.
"Bankruptcy Law" means Title 11 of the United States Code entitled
"Bankruptcy" or any other Law relating to bankruptcy, insolvency, winding up,
liquidation, reorganization or relief of debtors, whether in effect on the date
of this prospectus or afterwards.
"Board of Directors" means:
(1) in the case of a Person that is a corporation, the board of
directors of that Person or any committee authorized to act therefor,
(2) in the case of a Person that is a limited partnership, the board
of directors of its corporate general partner or any committee authorized
to act therefor, or, if the general partner is itself a limited
partnership, the board of directors of that general partner's corporate
general partner or any committee authorized to act therefor, and
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(3) in the case of any other Person, the board of directors,
management committee or similar governing body or any authorized committee
of these groups responsible for the management of the business and affairs
of that Person.
"Board Resolution" means a copy of a resolution certified by an Officers'
Certificate to have been duly adopted by the Board of Directors of Oglebay
Norton and to be in full force and effect, and delivered to the trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which:
(1) commercial banks in the City of New York are authorized or
required by law to close, or
(2) the New York Stock Exchange is not open for trading.
"Capital Lease Obligation" means, at the time any determination of the
Capital Lease Obligation is to be made, the amount of the liability in respect
of a capital lease that would at that time be so required to be capitalized on
the balance sheet in accordance with GAAP.
"Cash Equivalents" means:
(1) U.S. dollars;
(2) securities issued or directly and fully guaranteed or insured by
the U.S. government or any agency or instrumentality of these entities
having maturities of not more than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) entered
into with any financial institution meeting the qualifications specified in
clause (3) above; and
(5) commercial paper rated P-1, A-1 or the equivalent of P-1 or A-1 by
Moody's or S&P, respectively, and in each case maturing within six months
after the date of acquisition.
"Change of Control" shall mean the occurrence of any of the following
events, whether or not approved by the Board of Directors of Oglebay Norton:
(1) any Person or "group":
(a) is or becomes the "beneficial owner," directly or indirectly,
of Equity Interests representing 50% or more of the total voting power
of the Voting Equity Interests of Oglebay Norton or representing 50% or
more of the equity of Oglebay Norton, or
(b) has the power, directly or indirectly, to elect a majority of
the members of the Board of Directors of Oglebay Norton;
(2) Oglebay Norton consolidates with, or merges with or into, another
Person or Oglebay Norton or one or more Restricted Subsidiaries sell,
assign, convey, transfer, lease or otherwise dispose of all or
substantially all of the assets of Oglebay Norton and the Restricted
Subsidiaries, taken as a whole, to any Person, other than a Wholly Owned
Restricted Subsidiary, or any Person consolidates with, or merges with or
into, Oglebay Norton, in any event other than by a transaction in which the
Person or Persons that "beneficially owned," directly or indirectly, Equity
Interests representing 50% or more of the Voting Equity Interests of
Oglebay Norton or representing 50% or more of the equity of Oglebay Norton
immediately prior to the transaction, "beneficially own," directly or
indirectly, Equity Interests representing 50% or more of the total voting
power of the Voting Equity Interests or representing 50% or more of the
equity, as the case may be, of the surviving or transferee Person;
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(3) during any consecutive two-year period, individuals who at the
beginning of the period constituted the Board of Directors of Oglebay
Norton, together with any new directors whose election by the stockholder
of Oglebay Norton or whose nomination for election by the Board of
Directors of Oglebay Norton was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of the period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the Board of
Directors of Oglebay Norton then in office; or
(4) there shall occur the liquidation or dissolution of Oglebay Norton
or the stockholders of Oglebay Norton shall approve the liquidation or
dissolution. For purposes of this definition, (I) "group" has the meaning
under Section 13(d) and 14(d) of the Exchange Act, including any group
acting for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act, and (II)
"beneficial ownership" has the meaning set forth in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that that Person has the right to
acquire, whether the right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise.
"Commission" means the Securities and Exchange Commission.
"Common Equity Interests" means any Equity Interests other than Preferred
Equity Interests.
"Consolidated EBITDA" means, for any period, the sum, without duplication,
of the following items as determined on a consolidated basis for Oglebay Norton
and the Restricted Subsidiaries in accordance with GAAP:
(1) Consolidated Net Income, plus
(2) to the extent Consolidated Net Income has been reduced thereby,
(a) all income taxes of Oglebay Norton and the Restricted
Subsidiaries paid or accrued in accordance with GAAP for that period
(other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business),
(b) Consolidated Interest Expense,
(c) Consolidated Non-cash Charges, and
(d) debt prepayment premiums or penalties paid, and other
transaction costs incurred, in connection with the Transactions, less
(3) any non-cash items increasing Consolidated Net Income for that
period, all as determined on a consolidated basis for Oglebay Norton and
the Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum, without
duplication, of:
(1) Consolidated Interest Expense, plus
(2) the product of:
(a) the amount of all cash dividend payments on any series of
Preferred Equity Interests of Oglebay Norton or any Restricted
Subsidiary paid, accrued or scheduled to be paid or accrued during that
period, times
(b) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal,
state and local tax rate of that Person, expressed as a decimal.
"Consolidated Fixed Charge Coverage Ratio" shall mean, at any time of
determination (a "Transaction Date"), the ratio of:
(1) Consolidated EBITDA for the four full fiscal quarter period (the
"Four Quarter Period") of Oglebay Norton for which financial statements are
available at the date of determination ending at or prior to the
Transaction Date, to
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(2) Consolidated Fixed Charges for the period.
The Consolidated Fixed Charge Coverage Ratio shall be calculated after
giving pro forma effect to:
(1) the incurrence or repayment of any Indebtedness of Oglebay Norton
or any Restricted Subsidiary giving rise to the need to make the
calculation and any incurrence or repayment of other Indebtedness, other
than the incurrence or repayment of Indebtedness in the ordinary course of
business for working capital purposes in accordance with working capital
credit facilities, since the beginning of the Four Quarter Period and at or
prior to the Transaction Date, as if that incurrence or repayment, as the
case may be, occurred on the first day of the Four Quarter Period; and
(2) any Asset Sales or Asset Acquisitions, including, without
limitation, any Asset Acquisition giving rise to the need to make the
calculation as a result of Oglebay Norton or any Restricted Subsidiary,
including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition, incurring Acquired Indebtedness and also including any
EBITDA; provided that the EBITDA shall be included only to the extent
includable in accordance with the definition of "Consolidated Net Income,"
attributable to the assets that are the subject of the Asset Acquisition
during the Four Quarter Period, since the beginning of the Four Quarter
Period and at or prior to the Transaction Date, as if the Asset Sale or
Asset Acquisition, including the incurrence of any Acquired Indebtedness,
occurred on the first day of the Four Quarter Period.
In calculating "Consolidated Fixed Charges" for purposes of determining the
denominator, but not the numerator, of this "Consolidated Fixed Charge Coverage
Ratio":
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on the Indebtedness in effect on the
Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent that the interest is
covered by one or more Interest Rate Protection Obligations, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of the agreements.
"Consolidated Interest Expense" means, for any period, the sum of, without
duplication:
(1) the aggregate of the interest expense of Oglebay Norton and the
Restricted Subsidiaries for that period determined on a consolidated basis
in accordance with GAAP, including:
(a) any amortization of debt discount,
(b) the net costs under Interest Rate Protection Obligations,
(c) all capitalized interest, and
(d) the interest portion of any deferred payment obligation, but
excluding amortization or write-off of deferred financing costs; and
(2) the interest component of Capital Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by Oglebay Norton and the Restricted
Subsidiaries during that period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, with respect to any period, the net income
of Oglebay Norton and the Restricted Subsidiaries for that period determined on
a consolidated basis in accordance with GAAP, adjusted, to the extent included
in calculating the net income, by excluding, without duplication:
(1) all extraordinary, unusual or non-recurring gains or losses for
that period,
(2) all gains or losses from Asset Sales, net of taxes, fees and
expenses relating to the transaction giving rise thereto, during that
period;
(3) that portion of the net income derived from or in respect of
investments in Persons other than Restricted Subsidiaries, except to the
extent actually received in cash by Oglebay Norton or, subject to the
provisions of clause (6) of this definition, any Restricted Subsidiary;
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(4) the portion of the net income, or loss, allocable to minority
interests in any Person, other than a Restricted Subsidiary, for that
period, except to the extent Oglebay Norton's allocable portion of that
Person's net income for that period is actually received in cash by Oglebay
Norton or, subject to the provisions of clause (6) of this definition, any
Restricted Subsidiary;
(5) the net income, or loss, of any other Person combined with Oglebay
Norton or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination; and
(6) the net income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time, regardless of any waiver,
permitted, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or the
holders of its Equity Interests.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of Oglebay Norton and the
Restricted Subsidiaries reducing Consolidated Net Income of Oglebay Norton and
the Restricted Subsidiaries for that period, determined on a consolidated basis
in accordance with GAAP, excluding any charges constituting an extraordinary
item or loss or any charge which requires an accrual of or a reserve for cash
charges for any future period.
"Consolidated Tangible Assets" means, at any time, the total amount of
assets of Oglebay Norton and the Restricted Subsidiaries, less all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and all
other intangibles, all as set forth on the most recent consolidated balance
sheet of Oglebay Norton and calculated in accordance with GAAP.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
Oglebay Norton or any Restricted Subsidiary against fluctuations in currency
values.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Indebtedness" means:
(1) any Senior Indebtedness or Guarantor Senior Indebtedness under the
senior credit facility, and
(2) any other Senior Indebtedness or Guarantor Senior Indebtedness
which at the time of determination exceeds $25 million in aggregate
principal amount, or accreted value in the case of Indebtedness issued at a
discount, outstanding or available under a committed facility, which is
specifically designated in the instrument evidencing the Senior
Indebtedness or Guarantor Senior Indebtedness as "Designated Senior
Indebtedness" by the Person and as to which the Holders have been given
written notice of designation.
"Disinterested Director" means a member of the Board of Directors of
Oglebay Norton who does not have any direct or indirect financial interest in or
with respect to the transaction being considered.
"Disposition" means, with respect to any Person, any merger, consolidation
or other business combination involving that Person, whether or not that Person
is the Surviving Person, or the sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of that Person's assets.
"Disqualified Equity Interest" means any Equity Interest which, by its
terms, or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder of the Equity Interest, or upon
the happening of any event, matures or is mandatorily redeemable, by a sinking
fund obligation or otherwise, or redeemable, at the option of the holder of the
Equity Interest, in whole or in part, on or prior to the Final Maturity Date;
provided, however, that any Equity Interests that would not constitute
Disqualified Equity Interests but for provisions of the Equity Interests giving
holders of the Equity Interests the right to require Oglebay Norton to redeem
the Equity Interests upon the occurrence of a change in control occurring on or
prior to the Final Maturity Date shall not constitute Disqualified Equity
Interests if the change in control provisions applicable to the Equity Interests
are no more favorable to the holders of the Equity Interests than those
described under "-- Change of Control Offer" and the Equity Interests
specifically provide that Oglebay Norton will not
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redeem any of the Equity Interests in accordance with the provisions prior to
Oglebay Norton's repurchase of the notes as are required to be repurchased in
accordance with "-- Change of Control Offer."
"Equity Interest" in any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in, however designated, corporate stock or other equity
participations, including partnership interests, whether general or limited, in
that Person, including any Preferred Equity Interests.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder.
"Existing Business" means a business of Oglebay Norton and its Subsidiaries
conducted on the Issue Date or any activity reasonably related thereto.
"fair market value" means, with respect to any asset, the price, after
taking into account any liabilities relating to the assets, which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction. For purposes of "-- Certain
Covenants -- Limitation on Restricted Payments" and "-- Certain Covenants --
Limitation on Certain Asset Sales", fair market value shall be determined in
good faith by the Board of Directors of Oglebay Norton, which determination
shall be evidenced by a Board Resolution delivered to the trustee.
"Final Maturity Date" means February 1, 2009.
"Financing Documents" means the indenture, the registration rights
agreement, the notes and the Guarantees.
"Foreign Subsidiary" means a Restricted Subsidiary that is incorporated in
a jurisdiction other than the United States or any state or the District of
Columbia and with respect to which more than 80% of any of its sales, earnings
or assets, determined on a consolidated basis in accordance with GAAP, are
located in, generated from or derived from operations located in territories
outside the United States of America and jurisdictions outside the United States
of America.
"GAAP" means, at any date of determination, generally accepted accounting
principles in effect in the United States which are applicable at the date of
determination and which are consistently applied for all applicable periods.
"Governmental Authority" means any government or political subdivision of
the United States or any other country or any agency, authority, board, bureau,
central bank, securities exchange, commission, department or instrumentality of
these entities, including any court, tribunal, grand jury or arbitrator, in each
case whether foreign or domestic, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to that government or political subdivision.
"guarantee" means, as applied to any obligation:
(1) a guarantee, other than by endorsement of negotiable instruments
for collection in the ordinary course of business, direct or indirect, in
any manner, of any part or all of that obligation or
(2) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way the payment or
performance, or payment of damages in the event of non-performance, of all
or any part of that obligation, including, without limiting the foregoing,
the payment of amounts drawn down by letters of credit.
A guarantee shall include any agreement to maintain or preserve any other
person's financial condition or to cause any other Person to achieve identified
levels of operating results.
"Guarantee" means, as the context may require, individually, a guarantee,
or collectively, any and all guarantees, of the Obligations of Oglebay Norton
under the indenture and the notes by each Guarantor, in accordance with the
guarantee provisions of the indenture.
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"Guarantor" means:
(1) each of ON Marine Services Company, Oglebay Norton Marine Services
Company, L.L.C., ONCO Investment Company, Colorado Silica Sand, Inc.,
Oglebay Norton Engineered Materials, Inc., Oglebay Norton Industrial
Minerals, Inc., Oglebay Norton Industrial Sands, Inc., Global Stone Port
Inland, Inc., Oglebay Norton Terminals, Inc. d/b/a/ Cleveland Bulk
Terminals, Global Stone Corporation, Global Stone (U.S.A.) Inc., Global
Stone Tenn Luttrell Company, Global Stone Detroit Lime Company, Global
Stone James River, Inc., Global Stone St. Clair Inc., Global Stone
Chemstone Corporation, Global Stone PenRoc Inc., Global Stone Filler
Products, Inc. and Texas Mining, L.P.; and
(2) each Person that becomes a Guarantor in accordance with
"-- Certain Covenants -- Limitation or Creation of Subsidiaries," until, in
each case, the Guarantee of that Person is released in accordance with the
indenture.
"Guarantor Senior Indebtedness" means, with respect to any Guarantor, all
Obligations due in accordance with the terms of all agreements, documents and
instruments providing for, creating, securing or evidencing or otherwise entered
into in connection with:
(1) all Obligations of that Guarantor under the senior credit
facility;
(2) all obligations of that Guarantor with respect to any Interest
Rate Protection Obligation;
(3) all obligations of that Guarantor to reimburse any bank or other
person in respect of amounts paid under letters of credit, acceptances or
other similar instruments;
(4) all other Indebtedness of that Guarantor which does not provide
that it is to rank pari passu with or subordinate to the Guarantee of that
Guarantor; and
(5) all deferrals, refinancings and extensions of, and amendments to,
any of the Guarantor Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Guarantor Senior
Indebtedness will not include, with respect to any Guarantor:
(1) Indebtedness of that Guarantor to any of its Subsidiaries, or to
any Affiliate of that Guarantor or any of its Affiliate's Subsidiaries;
(2) Indebtedness represented by the Guarantees;
(3) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or
subordinate in right of payment to any other obligations of that Guarantor;
(4) any trade payable arising from the purchase of goods or materials
or for services obtained in the ordinary course of business;
(5) Indebtedness incurred in violation of the indenture;
(6) Indebtedness represented by Disqualified Equity Interests; and
(7) any Indebtedness owed to, or guaranteed on behalf of, any
stockholder, director, officer or employee of Oglebay Norton or any of its
Subsidiaries.
"Holder" means the Person in whose name a note is registered on the
Registrar's books.
"in the ordinary course of business" means in the ordinary course of
business of Oglebay Norton and its Subsidiaries consistent with past practice.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur, including by conversion, exchange or otherwise,
assume, guarantee or otherwise become liable in respect of the Indebtedness or
other obligation or the recording, as required by GAAP or otherwise, of any
particular Indebtedness or other obligation on the balance sheet of that Person;
and "incurrence," "incurred" and "incurring" shall have meanings correlative to
the foregoing. Indebtedness of a Person existing at the time that
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Person becomes a Restricted Subsidiary or is merged or consolidated with or into
Oglebay Norton or any Restricted Subsidiary shall be deemed to be incurred at
that time.
"Indebtedness" means, without duplication, with respect to any Person,
whether recourse is to all or a portion of the assets of that Person and whether
or not contingent:
(1) every obligation of that Person for money borrowed;
(2) every obligation of that Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
(3) every reimbursement obligation of that Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of that Person;
(4) every obligation of that Person issued or assumed as the deferred
purchase price of property or services, but excluding trade accounts
payable incurred in the ordinary course of business and payable in
accordance with industry practices, or other accrued liabilities arising in
the ordinary course of business which are not overdue or which are being
contested in good faith;
(5) every Capital Lease Obligation of that Person;
(6) every net obligation under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of
that Person;
(7) every obligation of the type referred to in clauses (1) through
(6) of another Person and all dividends of another Person the payment of
which, in either case, that Person has guaranteed or is responsible or
liable for, directly or indirectly, as obligor, guarantor or otherwise; and
(8) any and all deferrals, extensions and refinancings of, or
amendments to, any liability of the kind described in any of the preceding
clauses (1) through (7) above.
Indebtedness:
(1) shall never be calculated taking into account any cash and cash
equivalents held by that Person;
(2) shall not include obligations of any Person
(a) arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business, provided
that the obligations are extinguished within two Business Days of their
incurrence unless covered by an overdraft line,
(b) resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business, and
(c) under stand-by letters of credit to the extent collateralized
by cash or Cash Equivalents;
(3) which provides that an amount less than the principal amount of
the Indebtedness shall be due upon any declaration of acceleration of the
Indebtedness shall be deemed to be incurred or outstanding in an amount
equal to the accreted value of the Indebtedness at the date of
determination determined in accordance with GAAP; and
(4) shall include the liquidation preference and any mandatory
redemption payment obligations in respect of any Disqualified Equity
Interests of Oglebay Norton and any Preferred Equity Interests of any
Restricted Subsidiary.
"Independent Financial Advisor" means a nationally recognized accounting,
appraisal, investment banking firm or consultant:
(1) that does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest in Oglebay
Norton; provided that, notwithstanding the foregoing, CIBC Oppenheimer
Corp. and its Affiliates shall be deemed an Independent Financial Advisor,
and
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(2) which, in the judgment of the Board of Directors of Oglebay
Norton, is otherwise independent and qualified to perform the task for
which it is to be engaged.
"interest" means, with respect to the notes, the sum of any interest and
any Additional Interest on the notes.
"Interest Payment Dates" means each February 1 and August 1, commencing
August 1, 1999.
"Interest Rate Protection Obligations" means, with respect to any Person,
the Obligations of that Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and
(2) other agreements or arrangements designed to protect that Person
against fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
loan, advance, guarantee or other extension of credit or capital contribution
to, by means of transfers of cash or other property or assets to others or
payments for property or services for the account or use of others, or
otherwise, or purchase or acquisition of capital stock, bonds, notes, debentures
or other securities or evidences of Indebtedness issued by, any other Person.
The amount of any Investment shall be the original cost of that Investment, plus
the cost of all additions thereto, and minus the amount of any portion of that
Investment repaid to that Person in cash as a repayment of principal or a return
of capital, as the case may be, but without any other adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect to
that Investment. In determining the amount of any Investment involving a
transfer of any property or asset other than cash, the property shall be valued
at its fair market value at the time of the transfer, as determined in good
faith by the Board of Directors of the Person making the transfer.
"Issue Date" means the date the notes are first issued by Oglebay Norton
and authenticated by the trustee under the indenture.
"Lien" means any lien, mortgage, charge, security interest, hypothecation,
assignment for security or encumbrance of any kind, including any conditional
sale or capital lease or other title retention agreement, any lease of this
nature, and any agreement to give any of the foregoing.
"Majority Holders" means at any time, the Holders of more than 50% in
aggregate principal amount of the notes outstanding at that time.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means the aggregate proceeds in the form of cash or
cash equivalents received by Oglebay Norton or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or cash equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or cash equivalents, net of:
(1) the direct costs relating to that Asset Sale, including legal,
accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale;
(2) taxes paid or payable as a result of the Asset Sale, after taking
into account any available tax credits or deductions and any tax sharing
arrangements;
(3) amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of the Asset
Sale;
(4) amounts deemed, in good faith, appropriate by the Board of
Directors of Oglebay Norton to be provided as a reserve, in accordance with
GAAP, against any liabilities directly associated with the assets which are
the subject of the Asset Sale; provided that the amount of any reserves
shall be deemed to constitute Net Cash Proceeds at the time the reserves
shall have been released or are not otherwise required to be retained as a
reserve; and
(5) with respect to Asset Sales by Subsidiaries, the portion of the
cash payments attributable to Persons holding a minority interest in that
Subsidiary.
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"Non-Payment Event of Default" means any event, other than a Payment
Default, the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Obligations" means, with respect to any Indebtedness, any principal,
interest, including post-petition interest, penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing that Indebtedness.
"Obligors" means Oglebay Norton and the Guarantors, collectively; and
"Obligor" means any of them.
"Offer" has the meaning set forth in the definition of "Offer to Purchase."
"Offer Expiration Date" has the meaning set forth in the definition of
"Offer to Purchase."
"Offer to Purchase" means a written offer (the "Offer") sent by or on
behalf of Oglebay Norton by first-class mail, postage prepaid, to each Holder at
his address appearing in the register for the notes on the date of the Offer
offering to purchase up to the principal amount of notes specified in that Offer
at the purchase price specified in that Offer, as determined in accordance with
the indenture. Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Offer Expiration Date") of the Offer to
Purchase, which shall be not less than 30 Business Days nor more than 60 days
after the date of the Offer, and a settlement date (the "Purchase Date") for
purchase of notes to occur no later than five Business Days after the Offer
Expiration Date. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall also contain information
concerning the business of Oglebay Norton and its Subsidiaries which Oglebay
Norton in good faith believes will enable the Holders to make an informed
decision with respect to the Offer to Purchase. The information shall include,
at a minimum:
(1) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the document required to be delivered to Holders
in accordance with "-- Reports to Holders," which requirements may be
satisfied by delivery of the documents together with the Offer,
(2) a description of material developments in Oglebay Norton's
business subsequent to the date of the latest of the financial statements
referred to in clause (1), including a description of the events requiring
Oglebay Norton to make the Offer to Purchase,
(3) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring Oglebay Norton to
make the Offer to Purchase, and
(4) any other information required by applicable law to be included
therein.
The Offer shall contain all instructions and materials necessary to enable
the Holders to tender notes in accordance with the Offer to Purchase. The Offer
shall also state:
(1) the Section of the indenture by which the Offer to Purchase is
being made;
(2) the Offer Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding notes offered to
be purchased by Oglebay Norton in accordance with the Offer to Purchase,
including, if less than 100%, the manner by which that amount has been
determined in accordance with the Section of the indenture requiring the
Offer to Purchase (the"Purchase Amount");
(4) the purchase price to be paid by Oglebay Norton for each $1,000
aggregate principal amount of notes accepted for payment (the "Purchase
Price");
(5) that the Holder may tender all or any portion of the notes
registered in the name of that Holder and that any portion of a note
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where notes are to be surrendered for tender
in accordance with the Offer to Purchase;
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<PAGE> 40
(7) that interest on any note not tendered or tendered but not
purchased by Oglebay Norton in accordance with the Offer to Purchase will
continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each note being accepted for payment in accordance with the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(9) that each Holder electing to tender all or any portion of a note
in accordance with the Offer to Purchase will be required to surrender that
note at the place or places specified in the Offer prior to the close of
business on the Offer Expiration Date, that note being, if Oglebay Norton
so requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to Oglebay Norton duly executed by, the
Holder of the note or his attorney duly authorized in writing;
(10) that Holders will be entitled to withdraw all or any portion of
notes tendered if Oglebay Norton receives, not later than the close of
business on the fifth Business Day next preceding the Offer Expiration
Date, a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the note the Holder tendered, the
certificate number of the note the holder tendered and a statement that
that Holder is withdrawing all or a portion of its tender;
(11) that:
(a) if notes in an aggregate principal amount less than or equal to
the Purchase Amount are duly tendered and not withdrawn in accordance
with the Offer to Purchase, Oglebay Norton shall purchase all those
notes, and
(b) if notes in an aggregate principal amount in excess of the
Purchase Amount are tendered and not withdrawn in accordance with the
Offer to Purchase, Oglebay Norton shall purchase notes having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis, with any adjustments as may be deemed appropriate so that only
notes in denominations of $1,000 principal amount or integral multiples
of $1,000 shall be purchased; and
(12) that in the case of any Holder whose note is purchased only in
part, Oglebay Norton shall execute and deliver to the Holder of that note
without service charge, a new note or notes, of any authorized denomination
as requested by that Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the note so tendered.
An Offer to Purchase shall be governed by and effected in accordance with
the provisions above pertaining to any Offer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer or the President and the Chief Financial
Officer, the Treasurer or the Assistant Treasurer of that Person that shall
comply with applicable provisions of the indenture.
"Payment Default" means any default, whether or not any requirement for the
giving of notice, the lapse of time or both, or any other condition to that
default becoming an event of default has occurred, in the payment of principal
of, or premium, if any, or interest on or any other amount payable in connection
with Designated Senior Indebtedness.
"Permitted Investments" means:
(1) Cash Equivalents;
(2) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance and
other similar deposits;
(3) loans and advances to employees made in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding;
(4) Interest Rate Protection Obligations and Currency Agreements
permitted under "-- Certain Covenants -- Limitation on Additional
Indebtedness";
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(5) Investments in promissory notes issued to Oglebay Norton or any
Restricted Subsidiary as consideration in Asset Sales made in compliance
with "-- Certain Covenants -- Limitation on Certain Asset Sales"; provided,
however, that the aggregate principal amount of those promissory notes
outstanding shall not exceed the greater of:
(a) $10.0 million, and
(b) 2.0% of Consolidated Tangible Assets; and
(6) Investments in:
(a) Oglebay Norton or any Guarantor, or
(b) any Person that becomes a Restricted Subsidiary after giving
effect to that Investment so long as that Person becomes a Guarantor at
that time.
"Permitted Liens" means:
(1) Liens on property of a Person existing at the time that Person is
acquired by, or merged into or consolidated with, Oglebay Norton or any
Restricted Subsidiary; provided, however, that these Liens were in
existence prior to the contemplation of the acquisition, merger or
consolidation and do not secure any property or assets of Oglebay Norton or
any Restricted Subsidiary other than the property or assets subject to the
Liens prior to the acquisition, merger or consolidation;
(2) Liens existing on the date of this prospectus;
(3) Liens securing Purchase Money Indebtedness incurred in accordance
with "-- Certain Covenants -- Limitation on Additional Indebtedness";
provided, however, that these Liens do not extend to any assets of Oglebay
Norton or any Restricted Subsidiary other than the assets acquired with the
proceeds of this Indebtedness, and improvements thereto or thereon;
(4) Liens to secure any Permitted Refinancings, in whole or in part,
of any Indebtedness secured by Liens referred to in the clauses above so
long as the Lien does not extend to any other assets, other than
improvements thereto;
(5) Liens securing letters of credit entered into in the ordinary
course of business;
(6) Liens for taxes not yet due or which are being actively contested
in good faith by appropriate proceedings and for which adequate reserves
have been established in accordance with GAAP;
(7) other statutory Liens incidental to the conduct of business or the
ownership of property and assets by Oglebay Norton or any Restricted
Subsidiary which:
(a) were not incurred in connection with the borrowing of money or
the obtaining of advances or credit, and
(b) which do not in the aggregate materially detract from the value
of the property or assets or materially impair the use of the property
in the operation of the business of Oglebay Norton or any Restricted
Subsidiary;
(8) easements, rights of way or other minor defects or irregularities
in title of real property not interfering in any material respect with the
use of that property in the business of Oglebay Norton or any Restricted
Subsidiary; and
(9) Liens securing Senior Indebtedness.
"Permitted Refinancing" means, with respect to any Indebtedness,
Indebtedness to the extent representing a refinancing of that Indebtedness;
provided, however, that:
(1) the refinancing Indebtedness shall not exceed the sum of the
amount of the Indebtedness being refinanced, plus the amount of accrued
interest or dividends thereon, the amount of any reasonably
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<PAGE> 42
determined prepayment premium necessary to accomplish the refinancing and
reasonable fees and expenses incurred in connection therewith;
(2) the refinancing Indebtedness shall have a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of
the Indebtedness being refinanced and shall not permit redemption or other
retirement, including by any required offer to purchase to be made by
Oglebay Norton or any Restricted Subsidiary, of that Indebtedness at the
option of the holder of the Indebtedness prior to the final stated maturity
of the Indebtedness being refinanced, other than a redemption or other
retirement at the option of the holder of that Indebtedness, including by a
required offer to purchase made by Oglebay Norton or a Restricted
Subsidiary, upon a change of control of Oglebay Norton in accordance with
the provisions substantially similar to those described in "-- Change of
Control Offer";
(3) Indebtedness that ranks pari passu with the notes may be
refinanced only with Indebtedness that is made pari passu with or
subordinate in right of payment to the notes, and Indebtedness that is
subordinated in right of payment to the notes may be refinanced only with
Indebtedness that is subordinate in right of payment to the notes on terms
no less favorable to the Holders than those contained in the Indebtedness
being refinanced; and
(4) the refinancing Indebtedness shall be incurred by the obligor on
the Indebtedness being refinanced or by Oglebay Norton.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, limited liability
partnership, limited partnership, trust, unincorporated organization or
government or any agency or political subdivision of that government or agency,
or other entity.
"Preferred Equity Interest," in any Person, means an Equity Interest of any
class or classes, however designated, which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of that Person, over Equity
Interests of any other class in that Person.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by that Person whether or not included in the
most recent consolidated balance sheet of that Person and its Subsidiaries under
GAAP.
"Proxy Statement" means the Proxy Statement/Prospectus of Oglebay Norton
filed with the Commission on April 28, 1998.
"Public Equity Offering" means an underwritten public offering for cash of
Common Equity Interests of Oglebay Norton by an effective registration statement
filed under the Securities Act, excluding registration statements filed on Form
S-4, Form S-8 or similar forms.
"Purchase Amount" has the meaning set forth in the definition of "Offer to
Purchase."
"Purchase Date" has the meaning set forth in the definition of "Offer to
Purchase."
"Purchase Money Indebtedness" means Indebtedness incurred in the ordinary
course of business for the purpose of financing all or any part of the purchase
price, or the cost of installation, construction or improvement, of property or
equipment; provided, however:
(1) that Indebtedness shall not exceed the cost of the property or
assets and shall not be secured by any property or assets of Oglebay Norton
or any Restricted Subsidiary other than the property and assets so acquired
or constructed, and
(2) the Lien securing that Indebtedness shall be created within 90
days of the acquisition or construction or, in the case of a refinancing of
any Purchase Money Indebtedness, within 90 days of the refinancing.
"Purchase Price" has the meaning set forth in the definition of "Offer to
Purchase."
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"Qualified Equity Interest" means any Equity Interest of Oglebay Norton
other than any Disqualified Equity Interest.
"redeem" means redeem, repurchase, defease or otherwise acquire or retire
for value; and "redemption" and "redeemed" have correlative meanings.
"refinance" means refinance, renew, extend, replace, defease or refund, in
whole or in part, including successively; and "refinancing" and "refinanced"
have correlative meanings.
"Replacement Assets" means:
(1) properties and assets, other than cash or any Equity Interests or
other security, that will be used in an Existing Business, or
(2) Equity Interests of any Person engaged primarily in an Existing
Business, which Person will become on the date of acquisition of that
Person a Restricted Subsidiary as a result of Oglebay Norton's acquiring
these Equity Interests.
"Responsible Officer" when used with respect to the trustee, means an
officer or assistant officer assigned to the corporate trust department of the
trustee, or any successor group of the trustee, with direct responsibility for
the administration of the indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom that matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of Oglebay Norton other than
any Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by Oglebay Norton or any Restricted Subsidiary of any
real or tangible personal Property, which Property has been or is to be sold or
transferred by Oglebay Norton or that Restricted Subsidiary to that Person in
contemplation of leasing.
"Securities Act" means the Securities Act of 1933 and the rules and
regulations promulgated thereunder.
"senior credit facility" means the Credit Agreement dated as of May 15,
1998 between Oglebay Norton and KeyBank National Association, together with the
documents related thereto, including any guarantee agreements and security
documents, in each case as the agreements may be amended, refinanced or
restructured from time to time, including to increase the amount of available
borrowings thereunder; provided that the increase in borrowings is permitted by
"-- Certain Covenants -- Limitation on Additional Indebtedness," or adding
Subsidiaries of Oglebay Norton as additional borrowers or guarantors thereunder
or adding additional collateral thereunder, with respect to all or any portion
of the Indebtedness under the agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Senior Indebtedness" means all Obligations due in accordance with the
terms of all agreements, documents and instruments providing for, creating,
securing or evidencing or otherwise entered into in connection with:
(1) all Obligations of Oglebay Norton under the senior credit
facility;
(2) all obligations of Oglebay Norton with respect to any Interest
Rate Protection Obligation;
(3) all obligations of Oglebay Norton to reimburse any bank or other
person in respect of amounts paid under letters of credit, acceptances or
other similar instruments;
(4) all other Indebtedness of Oglebay Norton which does not provide
that it is to rank pari passu with or subordinate to the notes; and
(5) all deferrals, refinancings and extensions of, and amendments to,
any of the Senior Indebtedness described above.
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Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include:
(1) Indebtedness of Oglebay Norton to any of its Subsidiaries, or to
any Affiliate of Oglebay Norton or any of that Affiliate's Subsidiaries;
(2) Indebtedness represented by the notes;
(3) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or
subordinate in right of payment to any other obligations of Oglebay Norton;
(4) any trade payable arising from the purchase of goods or materials
or for services obtained in the ordinary course of business;
(5) Indebtedness incurred in violation of the indenture;
(6) Indebtedness represented by Disqualified Capital Stock; and
(7) any Indebtedness owed to, or guaranteed on behalf of, any
stockholder, director, officer or employee of Oglebay Norton or any of its
Subsidiaries.
"Significant Subsidiary," means, at any date of determination:
(1) any Restricted Subsidiary that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1-02 of Regulation S-X under the
Exchange Act, except that references to 10% in the definition shall be
changed to 5%, and
(2) for purposes of "-- Events of Default," any Restricted Subsidiary
which, when aggregated with all other Restricted Subsidiaries that are not
otherwise Significant Subsidiaries and as to which any event described in
clause (7) under "-- Events of Default" has occurred and is continuing,
would constitute a Significant Subsidiary under clause (1) of this
definition.
"Subordinated Indebtedness" means any Indebtedness of Oglebay Norton or any
Guarantor which is expressly subordinated in right of payment to the notes or
the Guarantee of that Guarantor.
"Subsidiary" means, with respect to any Person at any time:
(1) any corporation of which the outstanding Voting Equity Interests
having at least a majority of the votes entitled to be cast in the election
of directors shall at the time be owned, directly or indirectly, by that
Person, or
(2) any other Person of which at least a majority of Voting Equity
Interests are at the time, directly or indirectly, owned by the first
Person.
"Surviving Person" means, with respect to any Person involved in or that
makes any Disposition, the Person formed by or surviving the Disposition or the
Person to which the Disposition is made.
"Transactions" means:
(1) the consummation of the acquisition of Global Stone,
(2) the issuance of the acquisition notes,
(3) the initial borrowing under the senior credit facility,
(4) the redemption of all outstanding Trust Debentures, and
(5) the issuance of the notes in exchange for the acquisition notes.
"Trust Debentures" means the debentures issued under the Trust Indenture
between Global Stone and Montreal Trust Company of Canada, as trustee, dated as
of February 15, 1995.
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"Unrestricted Subsidiary" means any Subsidiary of Oglebay Norton designated
in accordance with "-- Certain Covenants -- Designation of Unrestricted
Subsidiaries," until the designation is revoked in accordance with "-- Certain
Covenants -- Designation of Unrestricted Subsidiaries."
"U.S. Government Obligations" means:
(1) securities that are direct obligations of the United States of
America for the payment of which its full faith and credit are pledged, or
(2) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer of the obligations, and
shall also include a depository receipt issued by a bank, as defined in
Section 3(a)(2) of the Securities Act, as custodian with respect to any
U.S. Government Obligation or a specific payment of principal of or
interest on any U.S. Government Obligation held by that custodian for the
account of the holder of that depository receipt; provided that, except as
required by law, that custodian is not authorized to make any deduction
from the amount payable to the holder of that depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or a specific payment of principal or interest on any U.S.
Government Obligation held by that custodian for the account of the holder
of that depository receipt.
"Voting Equity Interests" means Equity Interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders of
the Equity Interests to elect the Board of Directors or other governing body of
that corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking fund,
serial maturity or other required scheduled payment of principal,
including payment of final maturity, for that Indebtedness, by
(b) the number of years, calculated to the nearest one-twelfth,
that will elapse between that date and the making of that payment, by
(2) the then outstanding aggregate principal amount of that
Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary all of
the outstanding Voting Equity Interests, other than directors' qualifying
shares, of which are owned, directly or indirectly, by Oglebay Norton.
B. GENERAL
The exchange notes will be limited in aggregate principal amount to
$100,000,000. The exchange notes will be unsecured obligations of Oglebay
Norton, ranking subordinate in right of payment to the Senior Indebtedness of
Oglebay Norton and at least pari passu in right of payment with all other
existing and future indebtedness and other obligations of Oglebay Norton.
The exchange notes will be irrevocably and unconditionally guaranteed,
jointly and severally, on a senior subordinated basis, as to payment of
principal, premium, if any, and interest, by the Guarantors.
C. MATURITY, INTEREST AND PRINCIPAL
The exchange notes will mature on February 1, 2009. The exchange notes will
bear interest at a rate of 10% per annum from the Issue Date until maturity.
Interest is payable semi-annually in arrears on each February 1 and August 1
commencing August 1, 1999, to Holders of record of the notes at the close of
business on the immediately preceding January 15 and July 15, respectively.
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D. OPTIONAL REDEMPTION
The notes may be redeemed at any time after February 1, 2004, at the option
of Oglebay Norton, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the following redemption prices, expressed as percentages of
the principal amount of the notes, together, in each case, with accrued and
unpaid interest, if any, to the redemption date, if redeemed during the
twelve-month period beginning on February 1 of each year listed below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004.............................................. 105.000%
2005.............................................. 103.333%
2006.............................................. 101.667%
2007 and thereafter............................... 100.000%
</TABLE>
Notwithstanding the foregoing, Oglebay Norton may redeem in the aggregate
up to 35% of the original principal amount of notes at any time and from time to
time prior to February 1, 2002 at a redemption price equal to 110% of the
aggregate principal amount so redeemed, plus accrued and unpaid interest, if
any, to the redemption date out of the Net Proceeds of one or more Public Equity
Offerings; provided that at least 65% of the aggregate principal amount of notes
originally issued remain outstanding immediately after the occurrence of any
redemption of this type and that any redemption of this type occurs within 60
days following the closing of any Public Equity Offering as described above.
In the event of a redemption of fewer than all of the notes, the trustee
shall select the notes to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, while these notes are listed, or
if these notes are not then listed on a national securities exchange, on a pro
rata basis, by lot or in any other manner as the trustee shall deem fair and
equitable. The notes will be redeemable in whole or in part upon not less than
30 nor more than 60 days' prior written notice, mailed by first class mail to a
Holder's last address as it shall appear on the register maintained by the
Registrar of the notes. On and after any redemption date, interest will cease to
accrue on the notes or portions of the notes called for redemption unless
Oglebay Norton shall fail to redeem any of these notes.
The senior credit facility currently prohibits any optional redemption as
described above.
E. GUARANTEES
The notes are guaranteed on a senior subordinated basis by the Guarantors.
All payments in accordance with the Guarantees by the Guarantors are
subordinated in right of payment to the prior payment in full of all Guarantor
Senior Indebtedness of each respective Guarantor, to the same extent and in the
same manner that all payments in accordance with the notes are subordinated in
right of payment to the prior payment in full of all Senior Indebtedness of
Oglebay Norton.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of that
Guarantor, including, without limitation, any guarantees of Senior Indebtedness,
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of that other Guarantor
under its Guarantee or in accordance with its contribution obligations under the
indenture, result in the obligations of that Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. See "Risk Factors -- Guarantors May Not Be Liable for the Notes Due
to Fraudulent Conveyance Laws." Each Guarantor that makes a payment or
distribution under a Guarantee shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if all of its assets or Equity Interests are sold, in each case in a
transaction in compliance with "-- Certain Covenants -- Limitation on Certain
Asset Sales" above, the Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets in compliance with "Merger,
Consolidation or Sale of Assets" above, or the Guarantor is designated an
Unrestricted Subsidiary in compliance with the terms of the indenture and that
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Guarantor has delivered to the trustee an Officers' Certificate and an opinion
of counsel, each stating that all conditions precedent herein provided for
relating to that transaction have been complied with.
F. SUBORDINATION OF NOTES AND GUARANTEES
The indebtedness represented by the notes is, to the extent and in the
manner provided in the indenture, subordinated in right of payment to the prior
indefeasible payment and satisfaction in full in cash of all existing and future
Senior Indebtedness of Oglebay Norton. As of December 31, 1998, the principal
amount of outstanding Senior Indebtedness and Guarantor Senior Indebtedness of
Oglebay Norton and the Guarantors was approximately $210.7 million.
In the event of:
(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith, relative to Oglebay Norton or
to its creditors, or to its assets, whether voluntary or involuntary, or
(b) any liquidation, dissolution or other winding-up of Oglebay
Norton, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or
(c) any general assignment for the benefit of creditors or any other
marshaling of assets or liabilities of Oglebay Norton,
then and in any of the above events:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment and satisfaction in full in cash of all amounts due on or in
respect of all Senior Indebtedness, before the Holders of the notes are
entitled to receive or retain any payment or distribution of any kind or
character on account of principal of, premium, if any, or interest on the
notes; and
(2) any payment or distribution of assets of Oglebay Norton of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders would be entitled but for the subordination
provisions of the indenture shall be paid by the liquidating trustee or
agent or other Person making that payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any agreement under
which any instruments evidencing any of that Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of that Senior
Indebtedness.
In the event that, notwithstanding the provisions described in the
preceding paragraph, the Holder of any note shall have received any payment or
distribution of assets of Oglebay Norton of any kind or character, whether in
cash, property or securities, including, without limitation, by way of set-off
or otherwise, in respect of principal of, premium, if any, and interest on the
notes before all Senior Indebtedness is paid in full in cash, then and in that
event that payment or distribution shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of Oglebay Norton
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full in cash, after
giving effect to any concurrent payment or distribution, or provision therefor,
to or for the holders of Senior Indebtedness.
The consolidation of Oglebay Norton with, or the merger of Oglebay Norton
with or into, another Person or the liquidation or dissolution of Oglebay Norton
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in "-- Merger, Consolidation or Sale of Assets" below shall not be deemed
a dissolution, winding-up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of Oglebay Norton
for the purposes of the subordination provisions of the indenture if the Person
formed by that consolidation or the surviving entity of that merger or the
Person which acquires by conveyance, transfer or lease those properties and
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assets substantially as an entirety, as the case may be, shall, as a part of
that consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in "-- Merger, Consolidation or Sale of Assets" below.
After the occurrence of a Payment Default, no payment or distribution of
any assets or securities of any kind or character, including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of Oglebay
Norton being subordinated to the payment of the notes by Oglebay Norton, may be
made by or on behalf of Oglebay Norton or any of its Subsidiaries, including,
without limitation, by way of set-off or otherwise, for or on account of
principal of, premium, if any, or interest on the notes, or for or on account of
the purchase, redemption, defeasance or other acquisition of the notes, other
than from a trust previously established in accordance with provisions described
under "-- Defeasance and Covenant Defeasance," and neither the trustee nor any
holder or owner of any notes shall take or receive from Oglebay Norton or any of
its Subsidiaries, directly or indirectly in any manner, payment in respect of
all or any portion of notes following the delivery by the representative of, for
so long as there shall exist any Designated Senior Indebtedness under or in
respect of the senior credit facility, the holders of Designated Senior
Indebtedness under or in respect of the senior credit facility or, thereafter,
the holders of Designated Senior Indebtedness (in either case, the
"Representative") to the trustee of written notice of:
(1) the occurrence of a Payment Default on Designated Senior
Indebtedness, or
(2) the occurrence of a Non-Payment Event of Default on Designated
Senior Indebtedness and, in the case of this clause (2), the acceleration
of the maturity of Designated Senior Indebtedness in accordance with its
terms, and in any event of this type, the prohibition shall continue until
the Payment Default is cured, waived in writing or ceases to exist or the
acceleration has been rescinded or otherwise cured.
At that time as the prohibition set forth in the preceding sentence shall no
longer be in effect, subject to the provisions of the following paragraph,
Oglebay Norton shall resume making any and all required payments in respect of
the notes, including any missed payments.
After the occurrence of a Non-Payment Event of Default on Designated Senior
Indebtedness, no payment or distribution of any assets or securities of any kind
or character, including, without limitation, cash, property and any payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of Oglebay Norton being subordinated to the payment of the
notes by Oglebay Norton, shall be made by or on behalf of Oglebay Norton or any
of its Subsidiaries, including, without limitation, by way of set-off or
otherwise, for or on account of any principal of, premium, if any, or interest
on the notes or for or on account of the purchase, redemption, defeasance or
other acquisition of notes, other than from a trust previously established in
accordance with provisions described under "-- Defeasance and Covenant
Defeasance," and neither the trustee nor any holder or owner of any notes shall
take or receive from Oglebay Norton or any of its Subsidiaries, directly or
indirectly in any manner, payment in respect of all or any portion of the notes,
for a period (a "Payment Blockage Period") commencing on the date of receipt by
the trustee of written notice from the Representative of that Non-Payment Event
of Default unless and until, subject to any blockage of payments that may then
be in effect under the preceding paragraph, the earliest to occur of the
following events:
(1) more than 179 days shall have elapsed since the date of receipt of
that written notice by the trustee,
(2) that Non-Payment Event of Default shall have been cured or waived
in writing or shall have ceased to exist or the Designated Senior
Indebtedness shall have been discharged or paid in full, or
(3) that Payment Blockage Period shall have been terminated by written
notice to Oglebay Norton or the trustee from the Representative, after
which, in the case of clause (1), (2) or (3), Oglebay Norton shall resume
making any and all required payments in respect of the notes, including any
missed payments.
Notwithstanding any other provisions of the indenture, no Non-Payment Event of
Default with respect to Designated Senior Indebtedness which existed or was
continuing on the date of the commencement of any Payment Blockage Period
initiated by the Representative shall be, or be made, the basis for the
commencement of a second Payment Blockage Period initiated by the
Representative, whether or not within the Initial Blockage Period unless that
first Non-Payment Event of Default shall have been cured or waived for a period
of not less than 90 consecutive days. In no event shall a Payment Blockage
Period extend beyond 179 days from the date of
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the receipt by the trustee of the notice referred to above (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment Blockage
Period may be commenced under the indenture until at least 180 consecutive days
have elapsed from the last day of the Initial Blockage Period.
In the event that, notwithstanding the foregoing, the Holder of any note
shall have received any payment prohibited by the foregoing provisions of the
two immediately preceding paragraphs, then and in that event that payment shall
be paid over and delivered forthwith to the Representative initiating the
Payment Blockage Period, in trust for distribution to the holders of Senior
Indebtedness or, if no amounts are then due in respect of Senior Indebtedness,
promptly returned to Oglebay Norton, or otherwise as a court of competent
jurisdiction shall direct.
Each Guarantee will, to the extent set forth in the indenture, be
subordinated in right of payment to the prior payment in full of all Guarantor
Senior Indebtedness of the respective Guarantor and will be subject to the
rights of holders of Designated Senior Indebtedness of that Guarantor to
initiate blockage periods, upon terms substantially comparable to the
subordination of the notes to all Senior Indebtedness of Oglebay Norton.
If Oglebay Norton or any Guarantor fails to make any payment on the notes
or any Guarantee, as the case may be, when due or within any applicable grace
period, whether or not on account of payment blockage provisions, that failure
would constitute an Event of Default under the indenture and would enable the
Holders of the notes to accelerate the maturity of the notes. See "-- Events of
Default."
G. CERTAIN COVENANTS
The indenture contains, among others, the following covenants:
Limitation on Additional Indebtedness
(1) Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, incur any Indebtedness; provided,
however, that so long as no Default has occurred and is continuing or would
result therefrom, Oglebay Norton or any Guarantor may incur Indebtedness if, at
the time of that incurrence, the Consolidated Fixed Charge Coverage Ratio would
be greater than or equal to 2.0 to 1.0.
(2) The foregoing limitations of paragraph (1) of this covenant will not
apply to any of the following:
(a) the outstanding notes and the exchange notes, and Permitted
Refinancings and the Guarantees of these;
(b) Permitted Refinancings of:
(x) Indebtedness of Oglebay Norton or any Restricted Subsidiary to
the extent outstanding on the Issue Date, other than Indebtedness being
refinanced with the proceeds from the issuance of notes and other than
Indebtedness under the senior credit facility, reduced by the amount of
any scheduled amortization payments or mandatory prepayments actually
made, or
(y) Indebtedness incurred in accordance with the proviso in
paragraph (1) above or in accordance with clause (h) below;
(c) Indebtedness of Oglebay Norton or any Restricted Subsidiary
incurred under the senior credit facility in an aggregate amount, including
the face amount of all letters of credit, not to exceed $232.0 million at
any time outstanding, less the aggregate amount of any scheduled
amortization payments or mandatory prepayments actually made thereunder;
(d) Purchase Money Indebtedness and Indebtedness represented by
Capital Lease Obligations of Oglebay Norton or any Restricted Subsidiary
incurred in the ordinary course of business, and Permitted Refinancings of
these, in an aggregate amount not to exceed $20.0 million at any time
outstanding;
(e) (x) Indebtedness of any Restricted Subsidiary owed to and held by
Oglebay Norton or any Guarantor, and
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(y) Indebtedness of Oglebay Norton owed to and held by any
Guarantor which is unsecured and subordinated in right of payment to the
payment and performance of Oglebay Norton's obligations under the notes;
provided, however, that an incurrence of Indebtedness that is not
permitted by this clause (e) shall be deemed to have occurred upon:
(A) any sale or other disposition of any Indebtedness of Oglebay
Norton or any Restricted Subsidiary referred to in this
clause (e) to any Person other than Oglebay Norton or any
Guarantor, or
(B) any Guarantor that holds Indebtedness of Oglebay Norton or
another Guarantor ceasing to be a Guarantor;
(f) Interest Rate Protection Obligations of Oglebay Norton relating to
Indebtedness of Oglebay Norton, which Indebtedness:
(x) bears interest at fluctuating interest rates, and
(y) is otherwise permitted to be incurred under this covenant;
provided, however, that the notional principal amount of these Interest Rate
Protection Obligations does not exceed the principal amount of the Indebtedness
to which that Interest Rate Protection Obligations relate;
(g) Indebtedness of Oglebay Norton under Currency Agreements to the
extent relating to:
(x) Indebtedness of Oglebay Norton, and/or
(y) obligations to purchase assets, properties or services incurred
in the ordinary course of business of Oglebay Norton or any Restricted
Subsidiary;
provided, however, that these Currency Agreements do not increase the
Indebtedness or other obligations of Oglebay Norton and the Restricted
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;
(h) Indebtedness of any Foreign Subsidiary if, at the time of that
incurrence, the Consolidated Fixed Charge Coverage Ratio of that Foreign
Subsidiary would be greater than or equal to 3.0 to 1.0, for these
purposes, references to Oglebay Norton or any Restricted Subsidiary in the
definitions used to calculate that ratio shall be to that Foreign
Subsidiary and its Subsidiaries, other than any Unrestricted Subsidiary;
and
(i) Indebtedness of Oglebay Norton or any Restricted Subsidiary in an
aggregate amount not to exceed at any time outstanding $20.0 million.
(3) For purposes of determining any particular amount of Indebtedness under
this covenant, Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of that
particular amount shall not be included.
Limitation on Other Senior Subordinated Indebtedness
Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, incur, contingently or otherwise, any
Indebtedness, other than the notes and the Guarantees, as the case may be, that
is both
(1) subordinated in right of payment to any Senior Indebtedness of
Oglebay Norton or any of its Restricted Subsidiaries, as the case may be,
and
(2) senior in right of payment to the notes and the Guarantees, as the
case may be.
For purposes of this covenant, Indebtedness is deemed to be senior in right of
payment to the notes or the Guarantees, as the case may be, if it is not
explicitly subordinated in right of payment to Senior Indebtedness at least to
the same extent as the notes and the Guarantees, as the case may be, are
subordinated to that Senior Indebtedness.
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Limitation on Restricted Payments
Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(1) declare or pay any dividend or any other distribution on any
Equity Interests of Oglebay Norton or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders of Equity
Interests, in that capacity, of Oglebay Norton or any Restricted
Subsidiary, other than any dividends, distributions and payments made to
Oglebay Norton or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests;
(2) redeem any Equity Interests of Oglebay Norton or any Restricted
Subsidiary, other than any of these Equity Interests owned by Oglebay
Norton or any Restricted Subsidiary;
(3) redeem or make any principal payment on, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Indebtedness, other than any Subordinated Indebtedness held by
Oglebay Norton or any Restricted Subsidiary; or
(4) make any Investments, other than Permitted Investments.
Any of the foregoing, other than an exception thereto, is a "Restricted
Payment," unless:
(1) no Default shall have occurred and be continuing at the time of or
after giving effect to that Restricted Payment;
(2) immediately after giving effect to that Restricted Payment, Oglebay
Norton would be able to incur $1.00 of additional Indebtedness under paragraph
(1) of "-- Limitation on Additional Indebtedness"; and
(3) immediately after giving effect to that Restricted Payment, the
aggregate amount of all Restricted Payments, including the fair market value of
any non-cash Restricted Payment, declared or made on or after the Issue Date,
excluding any Restricted Payment described in clauses (2), (3), (4) or (5) of
the next paragraph, does not exceed an amount equal to the sum of the following
(the "Basket"):
(a) 50% of Consolidated Net Income, or 100% of Consolidated Net Loss,
for the period, treated as one accounting period, commencing on the first
day of the fiscal quarter in which the Issue Date occurs and ending on the
last day of the most recent fiscal quarter immediately preceding the date
of that Restricted Payment; plus
(b) the aggregate net cash proceeds received by Oglebay Norton either:
(x) as capital contributions to Oglebay Norton after the Issue
Date, or
(y) from the issue and sale, other than to a Subsidiary of Oglebay
Norton, of Qualified Equity Interests after the Issue Date, other than
any issuance and sale of Qualified Equity Interests financed, directly
or indirectly, using funds:
(A) borrowed from Oglebay Norton or any of its Subsidiaries
until and to the extent that borrowing is repaid, or
(B) contributed, extended, guaranteed or advanced by Oglebay
Norton or any of its Subsidiaries, including in respect of any
employee stock ownership or benefit plan; plus
(c) the aggregate amount by which Indebtedness, other than any
Subordinated Indebtedness, of Oglebay Norton or any Restricted Subsidiary
is reduced on Oglebay Norton's consolidated balance sheet upon the
conversion or exchange, other than by a Subsidiary of Oglebay Norton,
subsequent to the Issue Date into Qualified Equity Interests, less the
amount of any cash, or the fair value of property, distributed by Oglebay
Norton or any Restricted Subsidiary upon the conversion or exchange; plus
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(d) in the case of the disposition or repayment of any Investment that
was treated as a Restricted Payment made after the Issue Date, an amount,
to the extent not included in the computation of Consolidated Net Income,
equal to the lesser of:
(x) the return in cash of capital with respect to that Investment,
and
(y) the amount of that Investment that was treated as a Restricted
Payment,
in either case, less the cost of the disposition of that Investment and net
of taxes; plus
(e) so long as the Designation of the Subsidiary was treated as a
Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary after the Issue Date in accordance with "-- Designation of
Unrestricted Subsidiaries", Oglebay Norton's proportionate interest in an
amount equal to the excess of:
(x) the total assets of that Subsidiary, valued on an aggregate
basis at the lesser of book value and fair market value, over
(y) the total liabilities of that Subsidiary, determined in
accordance with GAAP,
and provided that that amount shall not in any case exceed the Designation
Amount with respect to that Restricted Subsidiary upon its Designation;
minus
(f) with respect to each Subsidiary of Oglebay Norton which has been
designated as an Unrestricted Subsidiary after the Issue Date in accordance
with "-- Designation of Unrestricted Subsidiaries", the greater of:
(x) $0, and
(y) the Designation Amount of the Subsidiary, measured as of the
Date of Designation; plus
(g) $10.0 million.
The foregoing provisions will not prevent:
(1) the payment of any dividend or distribution on Equity Interests
within 60 days after the date of declaration of that dividend or
distribution, if at the date of that declaration, that dividend or
distribution would comply with the provisions of the indenture;
(2) the redemption of any Equity Interests of Oglebay Norton or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent issue and sale, other than to a Subsidiary of
Oglebay Norton, of, Qualified Equity Interests;
(3) any Investment to the extent that the consideration therefor
consists of Qualified Equity Interests;
(4) the redemption of Subordinated Indebtedness made in exchange for,
or out of the net cash proceeds of, a substantially concurrent issue and
sale, other than to a Subsidiary, of:
(x) Qualified Equity Interests, or
(y) a Permitted Refinancing of that Subordinated Indebtedness; or
(5) the redemption of any Equity Interests of Oglebay Norton held by
directors, officers or employees of Oglebay Norton or any of its
Subsidiaries upon their death, retirement or other termination not to
exceed $1.0 million in the aggregate in any calendar year; provided,
however, that any unused amount may be used in the next succeeding, but not
any subsequent, calendar year;
provided, further, however, that:
(A) in the case of each of clauses (2), (3), (4) and (5), no Default
shall have occurred and be continuing or would arise therefrom, and
(B) no issuance of Qualified Equity Interests in accordance with
clause (2), (3) or (4) shall increase the Basket.
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Limitation on Liens
Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, incur any Lien, other than any Permitted
Lien, of any kind against or upon any of their respective properties or assets
now owned or hereafter acquired, or any proceeds, income or profits therefrom,
unless contemporaneously therewith or prior thereto:
(1) in the case of any Lien securing an obligation that ranks pari
passu with the notes, effective provision is made to secure the notes
equally and ratably with or prior to that obligation with a Lien on the
same collateral, and
(2) in the case of any Lien securing an obligation that is
subordinated in right of payment to the notes, effective provision is made
to secure the notes with a Lien on the same collateral that is prior to the
Lien securing that subordinated obligation, in each case, for so long as
that obligation is secured by that Lien.
Limitation on Transactions with Affiliates
(1) Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction or series of related transactions with or for the benefit of any
Affiliate, any holder of 5% or more of any class of Equity Interests or any
officer, director or employee of Oglebay Norton or any Restricted Subsidiary (an
"Affiliate Transaction"), unless that Affiliate Transaction is:
(a) fair to Oglebay Norton or that Restricted Subsidiary, as the case
may be, and
(b) on terms that are no less favorable to Oglebay Norton or that
Restricted Subsidiary, as the case may be, than could reasonably be
obtained at that time in a comparable transaction with an unaffiliated
third party.
For any Affiliate Transaction, or series of related Affiliate Transactions
that are similar or part of a common plan, involving an amount or having a fair
market value in excess of $5.0 million, Oglebay Norton shall deliver to the
trustee an Officers' Certificate stating that a majority of the Disinterested
Directors has determined that the transaction satisfies the above criteria and
shall evidence that determination by a Board Resolution delivered to the
trustee.
For any Affiliate Transaction, or series of related Affiliate Transactions
that are similar or part of a common plan, involving an amount or having a fair
market value in excess of $10.0 million or if there shall be no Disinterested
Directors, Oglebay Norton shall obtain a written opinion from an Independent
Financial Advisor to the effect that that transaction is fair, from a financial
point of view, to Oglebay Norton or that Restricted Subsidiary, as the case may
be.
(2) Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to:
(a) transactions exclusively between or among Oglebay Norton and one
or more Wholly Owned Restricted Subsidiaries or exclusively between or
among Wholly Owned Restricted Subsidiaries;
(b) customary directors' fees, indemnification and similar
arrangements, employee salaries, bonuses or employment agreements,
compensation or employee benefit arrangements and incentive arrangements
with any officer, director or employee of Oglebay Norton entered into in
the ordinary course of business;
(c) agreements, and transactions in accordance with agreements, in
effect on the date of this prospectus, as those agreements are in effect on
the date of this prospectus or as thereafter amended in a manner not
materially adverse to the Holders;
(d) loans and advances to officers, directors and employees of Oglebay
Norton or any Restricted Subsidiary for travel, entertainment, moving and
other relocation expenses, in each case made in the ordinary course of
business and consistent with past business practices; and
(e) any Restricted Payments not prohibited by the provisions described
under "-- Limitation on Restricted Payments" above.
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Limitation on Creation of Subsidiaries
If: (1) Oglebay Norton or any Restricted Subsidiary shall organize, acquire
or otherwise invest in another Person that becomes a Restricted Subsidiary, or
(2) any Restricted Subsidiary that is not already a Guarantor shall become
an obligor under the senior credit facility, then Oglebay Norton shall cause
that Restricted Subsidiary to:
(a) execute and deliver to the trustee a supplemental indenture by
which that Restricted Subsidiary shall become a Guarantor and, if requested
by the trustee, a notation of Guarantee, and
(b) deliver to the trustee an opinion of counsel that the supplemental
indenture has been duly authorized, executed and delivered by that
Restricted Subsidiary and constitutes a valid and legally binding
obligation of that Restricted Subsidiary, enforceable against it in
accordance with its terms, except that the enforcement of the supplemental
indenture may be subject to:
(x) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and
(y) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
Notwithstanding the foregoing clause (2), no Foreign Subsidiary, so long as
it is a Foreign Subsidiary, shall be required to become a Guarantor.
Limitation on Certain Asset Sales
(1) Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale, unless:
(a) Oglebay Norton or that Restricted Subsidiary, as the case may be,
receives consideration at the time of that Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of, and
(b) at least 80% of this consideration consists of:
(x) cash or Cash Equivalents,
(y) in the case of an Asset Sale of an industrial mining reserve,
an industrial mining reserve, and
(z) any combination of the foregoing.
The amount of any Indebtedness, other than any Subordinated Indebtedness, of
Oglebay Norton or any Restricted Subsidiary that is actually assumed by the
transferee in that Asset Sale and from which Oglebay Norton and the Restricted
Subsidiaries are fully released shall be deemed to be cash for purposes of
determining the percentage of cash consideration received by Oglebay Norton or
that Restricted Subsidiary. Any Net Cash Proceeds from any Asset Sale that are
not:
(a) invested in Replacement Assets, or
(b) used to reduce Indebtedness under the senior credit facility, with
a permanent concomitant reduction of commitments thereunder, within 365
days of the consummation of that Asset Sale shall constitute "Excess
Proceeds" subject to disposition as provided below.
(2) When the aggregate amount of Excess Proceeds exceeds $10.0 million,
Oglebay Norton shall make an Offer to Purchase, from all Holders, that aggregate
principal amount of notes as can be purchased with the Note Portion of Excess
Proceeds at a price in cash equal to 100% of the principal amount of the notes,
plus accrued and unpaid interest, if any, to any purchase date. To the extent
that the aggregate amount of principal and accrued interest of notes validly
tendered and not withdrawn in accordance with an Offer to Purchase is less than
the Excess Proceeds, Oglebay Norton may use that surplus for general corporate
purposes. If the aggregate amount of principal and accrued interest of notes
validly tendered and not withdrawn by Holders of the notes exceeds the amount of
notes that can be purchased with the Note Portion of Excess Proceeds, notes to
be purchased will be
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selected pro rata based on the aggregate principal amount of notes tendered by
each Holder. Upon completion of an Offer to Purchase, the amount of Excess
Proceeds with respect to the applicable Asset Sale shall be reset to zero.
(3) In the event that any other Indebtedness of Oglebay Norton that ranks
pari passu with the notes (the "Other Debt") requires an offer to purchase to be
made to repurchase that Other Debt upon the consummation of an Asset Sale,
Oglebay Norton may apply the Excess Proceeds otherwise required to be applied to
an Offer to Purchase to offer to purchase that Other Debt and to an Offer to
Purchase so long as the amount of that Excess Proceeds applied to purchase the
notes is not less than the Note Portion of Excess Proceeds. With respect to any
Excess Proceeds, Oglebay Norton shall make the Offer to Purchase in respect of
the notes at the same time as the analogous offer to purchase is made in
accordance with any Other Debt and the Purchase Date in respect of the notes
shall be the same as the purchase date in respect of the Other Debt in
accordance with any Other Debt.
(4) For purposes of this covenant, "Note Portion of Excess Proceeds" means:
(a) if no Other Debt is being offered to be purchased, the amount of
the Excess Proceeds, and
(b) if Other Debt is being offered to be purchased, the amount of the
Excess Proceeds equal to the product of:
(x) the Excess Proceeds, and
(y) a fraction the numerator of which is the aggregate amount of
all notes tendered in accordance with the Offer to Purchase related to
that Excess Proceeds (the "Note Amount") and the denominator of which is
the sum of the Note Amount and the aggregate amount as of the relevant
purchase date of all Other Debt tendered and purchased in accordance
with a concurrent offer to purchase that Other Debt made at the time of
that Offer to Purchase.
(5) Oglebay Norton will comply with the requirements of Rule 14e-1 under
the Exchange Act and other securities laws and regulations thereunder to the
extent these laws and regulations are applicable in connection with an Offer to
Purchase in accordance with the foregoing.
Limitation on Preferred Equity Interests of Restricted Subsidiaries
Oglebay Norton shall not cause or permit any Restricted Subsidiary, other
than any Guarantor, to issue any Preferred Equity Interests or permit any
Person, other than Oglebay Norton or one or more Wholly Owned Restricted
Subsidiaries, to hold any Preferred Equity Interests of this type.
Limitation on the Issuance and Sale of Equity Interests of Restricted
Subsidiaries
Oglebay Norton shall not sell, and shall not cause or permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any Equity Interests of a
Restricted Subsidiary, except:
(1) to Oglebay Norton or a Wholly Owned Restricted Subsidiary;
(2) the sale of all of the Equity Interests of a Restricted Subsidiary
in accordance with "-- Limitation on Certain Asset Sales" above;
(3) in the case of issuance of Equity Interests by a non-Wholly Owned
Restricted Subsidiary if, after giving effect to that issuance, Oglebay
Norton maintains its direct or indirect percentage of beneficial and
economic ownership of that non-Wholly Owned Restricted Subsidiary; or
(4) as permitted by "-- Limitation on Preferred Equity Interests of
Restricted Subsidiaries" above.
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Limitation on Restrictions Affecting Restricted Subsidiaries
(1) Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) pay dividends or make any other distributions to Oglebay Norton or
any other Restricted Subsidiary on its Equity Interests or with respect to
any other interest or participation in, or measured by, its profits, or pay
any Indebtedness owed to Oglebay Norton or any other Restricted Subsidiary,
(b) make loans or advances to, or guarantee any Indebtedness or other
obligations of, Oglebay Norton or any other Restricted Subsidiary, or
(c) transfer any of its properties or assets to Oglebay Norton or any
other Restricted Subsidiary.
(2) The foregoing shall not prohibit:
(a) any encumbrance or restriction existing under or by reason of any
agreement in effect on the date of this prospectus, as any that agreement
is in effect on that date or as thereafter amended but only if that
encumbrance or restriction is no more restrictive than in the agreement
being amended;
(b) any encumbrance or restriction existing under or by reason of any
agreement relating to any Acquired Indebtedness; provided, however, that
encumbrance or restriction shall not apply to any assets of Oglebay Norton
or any Restricted Subsidiary other than the Restricted Subsidiary acquired
or its assets;
(c) customary provisions contained in an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Equity Interests or assets of a Restricted Subsidiary; provided, however,
that:
(x) that encumbrance or restriction is applicable only to that
Restricted Subsidiary or assets, and
(y) that sale or disposition is made in accordance with
"-- Limitation on Certain Asset Sales" above;
(d) any encumbrance or restriction existing under or by reason of
applicable law;
(e) customary provisions restricting subletting or assignment of any
lease governing any leasehold interest of any Restricted Subsidiary;
(f) covenants in purchase money obligations for property acquired in
the ordinary course of business restricting transfer of that property; or
(g) covenants in security agreements securing Indebtedness of a
Restricted Subsidiary, to the extent that those Liens were otherwise
incurred in accordance with "-- Limitation on Liens" above, that restrict
the transfer of property subject to those agreements.
Designation of Unrestricted Subsidiaries
(1) Oglebay Norton may designate any Subsidiary of Oglebay Norton as an
"Unrestricted Subsidiary" under the indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to that Designation;
(b) at the time of and after giving effect to that Designation,
Oglebay Norton could incur $1.00 of additional Indebtedness under paragraph
(a) of "-- Limitation on Additional Indebtedness"; and
(c) Oglebay Norton would be permitted to make an Investment, other
than a Permitted Investment, at the time of Designation, assuming the
effectiveness of that Designation, in accordance with "-- Limitation on
Restricted Payments" in an amount (the "Designation Amount") equal to the
fair market value of Oglebay Norton's proportionate interest in the net
worth of that Subsidiary on that date calculated in accordance with GAAP.
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All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted
Subsidiaries.
(2) Oglebay Norton shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, at any time:
(a) provide credit support for, subject any of its properties or
assets, other than the Equity Interests of any Unrestricted Subsidiary, to
the satisfaction of, or guarantee, any Indebtedness of any Unrestricted
Subsidiary, including any undertaking, agreement or instrument evidencing
that Indebtedness,
(b) be liable for any Indebtedness of any Unrestricted Subsidiary, or
(c) be liable for any Indebtedness which provides that the holder of
the Indebtedness may, upon notice, lapse of time or both, declare a default
thereon or cause the payment of the Indebtedness to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Indebtedness of any Unrestricted Subsidiary.
(3) Oglebay Norton may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to that Revocation; and
(b) all Liens and Indebtedness of that Unrestricted Subsidiary
outstanding immediately following that Revocation would, if incurred at
that time, have been permitted to be incurred for all purposes of the
indenture.
All Designations and Revocations must be evidenced by resolutions of the
Board of Directors of Oglebay Norton, delivered to the trustee certifying
compliance with the foregoing provisions.
Limitation on Sale and Leaseback Transactions
Oglebay Norton shall not, and shall not permit any Restricted Subsidiary
to, enter into any Sale and Leaseback Transaction unless:
(1) the consideration received in that Sale and Leaseback Transaction
is at least equal to the fair market value of the property sold, as
determined, in good faith, by the Board of Directors of Oglebay Norton and
evidenced by a Board Resolution,
(2) Oglebay Norton could incur the Attributable Indebtedness in
respect of that Sale and Leaseback Transaction in compliance with
"-- Limitation on Additional Indebtedness" above, and
(3) that Sale and Leaseback Transaction is permitted by, and the
proceeds of the Sale and Leaseback Transaction are applied in compliance
with, "-- Limitation on Certain Asset Sales" above.
Payments for Consent
Oglebay Norton shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of the indenture or the notes unless that consideration
is offered to be paid or agreed to be paid to all Holders of the notes which so
consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to that consent, waiver or agreement.
Reports to Holders
Oglebay Norton shall deliver to the trustee and the Holders, at the time of
the filing of same with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which
Oglebay Norton is required to file with the Commission in accordance with
Section 13 or 15(d) of the Exchange Act. Notwithstanding that Oglebay Norton may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, Oglebay Norton shall file with the Commission, to the extent
permitted,
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and provide the trustee and the Holders with that quarterly and annual reports
and that information, documents and other reports specified in Sections 13 and
15(d) of the Exchange Act within the time periods specified therein. In
addition, for so long as any notes remain outstanding, Oglebay Norton shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered in accordance with
Rule 144A(d)(4) under the Securities Act, and, to any beneficial holder of
notes, if not obtainable from the Commission, information of the type that would
be filed with the Commission in accordance with the foregoing provisions, upon
the request of any holder.
H. CHANGE OF CONTROL OFFER
Following the occurrence of a Change of Control (the date of that
occurrence being the "Change of Control Date"), Oglebay Norton shall, within 30
days after the Change of Control Date, make an Offer to Purchase all notes then
outstanding at a purchase price in cash equal to 101% of the aggregate principal
amount of the notes, plus accrued and unpaid interest thereon, if any, to the
Purchase Date.
On or before the Purchase Date, Oglebay Norton shall:
(1) accept for payment notes or portions of notes which are to be
purchased in accordance with an Offer to Purchase under the provisions of
this covenant,
(2) deposit at the payment office established by Oglebay Norton cash
in U.S. dollars sufficient to pay the purchase price of all notes to be
purchased, and
(3) deliver or cause to be delivered to the trustee notes so accepted
together with an Officers' Certificate stating the notes or portions of
notes tendered to Oglebay Norton.
The Paying Agent shall promptly mail to each Holder of notes so accepted payment
in an amount equal to the purchase price for those notes, and Oglebay Norton
shall execute and issue, and the trustee shall promptly authenticate and mail to
that Holder, a new note equal in principal amount to any unpurchased portion of
the notes surrendered; provided that each of these new notes shall be issued in
an original principal amount in denominations of $1,000 and integral multiples
of $1,000.
The indenture requires that if the senior credit facility is in effect, or
any amounts are owing under the senior credit facility or in respect of the
senior credit facility, at the time of the occurrence of a Change of Control,
prior to the mailing of the notice to Holders described in the second preceding
paragraph, but in any event within 20 days following any Change of Control,
Oglebay Norton covenants to:
(1) repay in full all obligations and terminate all commitments under
or in respect of the senior credit facility and all other Senior
Indebtedness the terms of which require repayment upon a Change of Control
or offer to repay in full all obligations and terminate all commitments
under or in respect of the senior credit facility and all that Senior
Indebtedness and repay the Indebtedness owed to the lender who has accepted
that offer, or
(2) obtain the requisite consents under the senior credit facility and
all other Senior Indebtedness to permit the repurchase of the notes as
described above.
Oglebay Norton must first comply with the covenant described in the preceding
sentence before it shall be required to purchase notes in the event of a Change
of Control; provided that Oglebay Norton's failure to comply with the covenant
described in the preceding sentence constitutes an Event of Default described in
clause (3) under "-- Events of Default" below if not cured within 30 days after
the notice required by that clause. As a result of the foregoing, a Holder of
the notes may not be able to compel Oglebay Norton to purchase the notes unless
Oglebay Norton is able at the time to refinance all of the obligations under or
in respect of the senior credit facility and all other Senior Indebtedness or
obtain requisite consents under the senior credit facility and all other Senior
Indebtedness.
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If: (1) Oglebay Norton or any Restricted Subsidiary of Oglebay Norton has
issued any outstanding:
(a) Subordinated Indebtedness, or
(b) Preferred Equity Interests, and
(2) Oglebay Norton or that Restricted Subsidiary is required to make a
change of control offer or to make a distribution with respect to that
Subordinated Indebtedness or Preferred Equity Interests in the event of a change
of control,
then Oglebay Norton shall not consummate any offer or distribution with respect
to that Subordinated Indebtedness or Preferred Equity Interests until that time
as Oglebay Norton shall have paid the Purchase Price in full to the Holders that
have accepted the Offer to Purchase in accordance with the provisions of this
covenant and shall otherwise have consummated that Offer to Purchase. No Obligor
shall issue Subordinated Indebtedness or Preferred Equity Interests with change
of control provisions requiring the payment of that Indebtedness or Preferred
Equity Interests prior to the payment of the notes in the event of a Change of
Control under the indenture.
Oglebay Norton will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of notes in accordance with an Offer to Purchase under the "Change of
Control" provisions of the indenture.
I. MERGER, CONSOLIDATION OR SALE OF ASSETS
(1) No Obligor shall consolidate with or merge with or into, whether or not
that Obligor is the Surviving Person, any other Person and the Obligors shall
not, and shall not cause or permit any Restricted Subsidiary to, sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of the
property and assets of Oglebay Norton and the Restricted Subsidiaries, taken as
a whole, to any Person or Persons in a single transaction or series of related
transactions, unless:
(a) (w) Oglebay Norton shall be the Surviving Person;
(x) if that Obligor is a Guarantor, any other Obligor shall be the
Surviving Person;
(y) the Surviving Person, if other than that Obligor, shall be a
corporation organized and validly existing under the laws of the United
States of America, or any State of the United States of America, or the
District of Columbia, and shall, in any case, expressly assume, by a
supplemental indenture executed and delivered to the trustee, all of the
obligations of that Obligor under the Financing Documents; or
(b) immediately after giving effect to that transaction, no Default
shall have occurred and be continuing; and
(c) immediately after giving effect to that transaction, Oglebay
Norton or the Surviving Person, as the case may be, could incur at least
$1.00 of additional Indebtedness under paragraph (1) of "-- Certain
Covenants -- Limitation on Additional Indebtedness," if Oglebay Norton
shall not be the Surviving Person, all references to Oglebay Norton and the
Restricted Subsidiaries in the definitions used to determine the ratio
therein shall be to the Surviving Person and its Subsidiaries after giving
effect to that transaction, excluding any Unrestricted Subsidiaries.
For purposes of the foregoing, the transfer, by lease, assignment, sale or
otherwise, in a single transaction or series of transactions, of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interests of which constitutes all or substantially all
the properties and assets of Oglebay Norton shall be deemed to be the transfer
of all or substantially all the properties and assets of Oglebay Norton.
(2) In connection with any consolidation, merger or transfer of assets
contemplated by the provisions of this covenant, Oglebay Norton shall deliver,
or cause to be delivered, to the trustee, in form and substance reasonably
satisfactory to the trustee, an Officers' Certificate and an opinion of counsel,
each stating that that consolidation,
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merger or transfer and the supplemental indenture in respect thereto comply with
the provisions of this covenant and that all conditions precedent herein
provided for relating to that transaction or transactions have been complied
with. This opinion of counsel shall also state that each of these supplemental
indentures have been duly authorized, executed and delivered by the applicable
Obligor and constitutes a valid and legally binding obligation of that Obligor,
enforceable against it in accordance with its terms, except that the enforcement
of the supplemental indenture may be subject to:
(a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and
(b) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
J. EVENTS OF DEFAULT
The following events are defined in the indenture as "Events of Default":
(1) Oglebay Norton fails to pay any principal of the notes when the
same becomes due and payable at maturity, upon acceleration, redemption or
otherwise, whether or not that payment is permitted by the subordination
provisions of the indenture;
(2) Oglebay Norton fails to pay any interest on any note when due,
which failure continues for a period of 30 days, whether or not the payment
is permitted by the subordination provisions of the indenture;
(3) any Obligor fails to observe or perform any of the covenants set
forth under "-- Change of Control Offer" or "-- Merger, Consolidation or
Sale of Assets";
(4) any Obligor fails to observe or perform any other covenant in the
notes or the indenture for 60 days after written notice from the Holders of
not less than 25% in the aggregate principal amount of the notes then
outstanding;
(5) default under any mortgage, indenture or other instrument or
agreement under which there may be issued or by which there may be secured
or evidenced Indebtedness of Oglebay Norton or any Restricted Subsidiary,
whether that Indebtedness now exists or is hereafter incurred, which
default:
(a) is caused by a failure to pay when due principal or interest on
that Indebtedness within the applicable express grace period,
(b) results in the acceleration of that Indebtedness prior to its
express final maturity, or
(c) results in the commencement of judicial proceedings to
foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of, the property or
assets securing that Indebtedness and, in each case, the principal
amount of that Indebtedness, together with any other Indebtedness with
respect to which an event described in clause (a), (b) or (c) has
occurred and is continuing, aggregates $10.0 million or more;
(6) the entry of a final judgment or judgments which can no longer be
appealed for the payment of money in excess of $10.0 million against
Oglebay Norton or any Restricted Subsidiary and that judgment remains
undischarged, for a period of 60 consecutive days during which a stay of
enforcement of that judgment shall not be in effect;
(7) some types of events involving bankruptcy, insolvency or
reorganization of Oglebay Norton or any Significant Subsidiary; or
(8) the Guarantee of any Significant Subsidiary ceases to be in full
force and effect or any of these Guarantees are declared to be null and
void and unenforceable or any of these Guarantees are found to be invalid
or any of the Guarantors denies in writing its liability under its
Guarantee, other than by reason of release of a Guarantor in accordance
with the terms of the indenture.
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The indenture provides that the trustee may withhold notice to the Holders
of the notes of any default, except in payment of principal or premium, if any,
or interest on any note or in the observance or performance of any of the
obligations of Oglebay Norton under "-- Merger, Consolidation or Sale of
Assets," if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the best interest of the Holders of
the notes.
The indenture provides that if an Event of Default, other than an Event of
Default described in clause (7) with respect to Oglebay Norton, shall have
occurred and be continuing, then the trustee or the Holders of not less than 25%
in aggregate principal amount of the notes then outstanding may by written
notice to Oglebay Norton declare to be immediately due and payable the entire
principal amount of all the notes then outstanding plus accrued but unpaid
interest to the date of acceleration and those amounts shall become immediately
due and payable or if there are any amounts outstanding under or in respect of
the senior credit facility, those amounts shall become due and payable upon the
first to occur of an acceleration of amounts outstanding under or in respect of
the senior credit facility or five business days after receipt by Oglebay Norton
and the representative of the holders of Senior Indebtedness under or in respect
of the senior credit facility of notice of the acceleration of the notes;
provided, however, that after this acceleration but before a judgment or decree
based on this acceleration is obtained by the trustee, the Majority Holders may
rescind and annul this acceleration and its consequences if all existing Events
of Default, other than the nonpayment of accelerated principal, premium, if any,
or interest that has become due solely because of the acceleration, have been
cured or waived and if the rescission would not conflict with any judgment or
decree. No rescission of this type shall affect any subsequent Default or impair
any right consequent thereto. In case an Event of Default described in clause
(7) with respect to Oglebay Norton shall occur, the principal and interest
amount with respect to all of the notes shall be due and payable immediately
without any declaration or other act on the part of the Holders of the notes.
The Holders of a majority in principal amount of the notes then outstanding
have the right to waive any existing default or compliance with any provision of
the indenture or the notes and to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, subject to
the limitations provided for in the indenture and under the TIA.
No Holder of any note has any right to institute any proceeding with
respect to the indenture or for any remedy thereunder, unless that Holder shall
have previously given to the trustee written notice of a continuing Event of
Default and unless the Holders of at least 25% in aggregate principal amount of
the outstanding notes shall have made written request and offered reasonable
indemnity to the trustee to institute that proceeding as trustee, and unless the
trustee shall not have received from the Majority Holders a direction
inconsistent with that request and shall have failed to institute that
proceeding within 60 days. Notwithstanding the foregoing, these limitations do
not apply to a suit instituted for the payment of principal or interest on any
note on or after the respective due dates therefor.
Oglebay Norton will deliver to the trustee on or before 90 days after the
end of Oglebay Norton's fiscal year and on or before 45 days after the end of
each the first, second and third fiscal quarters in each year an Officers'
Certificate stating whether or not the signers know of any Default that has
occurred. If they do, the certificate will describe the Default, its status and
the intended method of cure, if any.
K. DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that Oglebay Norton may elect either:
(1) to defease and be discharged from any and all of its and any
Guarantor's obligations with respect to the notes, except for the
obligations to register the transfer or exchange of those notes, to replace
temporary or mutilated, destroyed, lost or stolen notes, to maintain an
office or agency in respect of the notes and to hold monies for payment in
trust ("defeasance"), or
(2) to be released from its obligations with respect to the notes
under some of the covenants contained in the indenture ("covenant
defeasance") upon the deposit with the trustee or other qualifying trustee,
in trust for that purpose, of money and/or non-callable U.S. Government
Obligations which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient
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to pay the principal of, premium, if any, and interest on the notes, on the
scheduled due dates therefor or on a selected date of redemption in
accordance with the terms of the indenture.
A trust of this type may be established only if, among other things:
(1) Oglebay Norton has delivered to the trustee an opinion of counsel
as specified in the indenture to the effect that:
(a) neither the trust nor the trustee will be required to register
as an investment company under the Investment Company Act of 1940, as
amended, and
(b) holders of the notes or persons in their positions will not
recognize income, gain or loss for federal income tax purposes as a
result of that deposit, defeasance and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if that deposit, defeasance and
discharge had not occurred, which opinion, in the case of defeasance,
shall refer to and be based on a published ruling of the Internal
Revenue Service or a change in applicable federal income tax laws;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of that deposit or insofar as Events of Default from
bankruptcy, insolvency or reorganization events are concerned, at any time
in the period ending on the 91st day after the date of deposit;
(3) that defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under the indenture, the
senior credit facility or any other material agreement or instrument to
which Oglebay Norton or any of its Subsidiaries is a party or by which
Oglebay Norton or any of its Subsidiaries is bound;
(4) Oglebay Norton shall have delivered to the trustee an Officers'
Certificate stating that the deposit was not made by Oglebay Norton with
the intent of preferring the Holders of the notes over any other creditors
of Oglebay Norton or with the intent of defeating, hindering, delaying or
defrauding any other creditors of Oglebay Norton or others;
(5) Oglebay Norton shall have delivered to the trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the defeasance or the covenant
defeasance have been complied with;
(6) Oglebay Norton shall have delivered to the trustee an opinion of
counsel to the effect that:
(a) the trust funds will not be subject to any rights of holders of
Senior Indebtedness, including, without limitation, those arising under
the indenture, and
(b) after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
and
(7) other defined, customary conditions precedent are satisfied.
The senior credit facility currently prohibits any defeasance of this type
or covenant defeasance.
L. MODIFICATION OF INDENTURE
From time to time, Oglebay Norton, the Guarantors and the trustee may,
without the consent of holders of the notes, amend or supplement the indenture
for specified purposes, including providing for uncertificated notes in addition
to certificated notes, and curing any ambiguity, defect or inconsistency, or
making any other change that does not, in the opinion of the trustee, materially
and adversely affect the rights of any Holder.
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The indenture contains provisions permitting Oglebay Norton, the Guarantors
and the trustee, with the consent of the Majority Holders, to modify or
supplement the indenture, except that no modification of this type shall,
without the consent of each Holder affected thereby:
(1) reduce the amount of notes whose Holders must consent to an
amendment, supplement, or waiver to the indenture;
(2) reduce the rate of or change the time for payment of interest on
any note;
(3) reduce the principal of or premium on or change the stated
maturity of any note or change the date on which any notes may be subject
to redemption or repurchase or reduce the redemption or repurchase price
therefor;
(4) make any note payable in money other than that stated in the note
or change the place of payment from New York, New York;
(5) waive a default on the payment of the principal of, interest on,
or redemption payment with respect to any note;
(6) make any change in provisions of the indenture protecting the
right of each Holder of notes to receive payment of principal of and
interest on that note on or after the due date of that note or to bring
suit to enforce that payment, or permitting the Majority Holders to waive
Defaults;
(7) amend, change or modify in any material respect the obligation of
Oglebay Norton to make and consummate a Change of Control Offer in the
event of a Change of Control or modify any of the provisions or definitions
with respect thereto;
(8) modify or change any provision of the indenture or the related
definitions affecting the subordination or ranking of the notes or any
Guarantee in a manner which adversely affects the Holders of notes; or
(9) release any Guarantor from any of its obligations under its
Guarantee or the indenture otherwise than in accordance with the terms of
the indenture.
M. THE TRUSTEE
The trustee under the indenture is the Registrar and Paying Agent with
regard to the notes. The indenture provides that, except during the continuance
of an Event of Default, the trustee will perform only those duties as are
specifically set forth in the indenture. During the existence of an Event of
Default, the trustee will exercise those rights and powers vested in it under
the indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of that
person's own affairs.
N. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Oglebay
Norton or any Guarantor shall have any liability for any obligations of Oglebay
Norton or the Guarantors under the notes, the Guarantees or the indenture or for
a claim based on, in respect of, or by reason of those obligations or their
creation. Each Holder of the notes by accepting a note waives and releases all
liability of this type. The waiver and release are part of the consideration for
issuance of the notes.
O. TRANSFER AND EXCHANGE
Holders of the notes may transfer or exchange notes in accordance with the
indenture. The Registrar under the indenture may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the indenture. The Registrar
is not required to transfer or exchange any note selected for redemption and,
further, is not required to transfer or exchange any note for a period of 15
days before selection of the notes to be redeemed.
The registered holder of a note may be treated as the owner of it for all
purposes.
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VIII. THE SENIOR CREDIT FACILITY
A. GENERAL
In connection with the Global Stone acquisition, on May 15, 1998 Oglebay
Norton entered into the senior credit facility with KeyBank National
Association, as agent, that provides as amended for a revolving credit facility
of up to $232 million, secured by substantially all of the assets of Oglebay
Norton and some of its subsidiaries. In addition to revolving loans, the senior
credit facility provides for the issuance of swing loans and letters of credit.
The following general description is qualified in its entirety by reference to
the complete text of the senior credit facility, as amended, and all ancillary
documents. Capitalized terms used in the following description but not defined
in this prospectus have the meanings set forth in the senior credit facility.
B. COMMITMENT FEE AND INTEREST RATE
Effective November 15, 1998, Oglebay Norton paid and will pay a commitment
fee based on the Leverage Ratio of Oglebay Norton in a range equal to 25 to 50
basis points on the undrawn portion of the commitments in respect of the senior
credit facility, payable quarterly in arrears.
Indebtedness on the revolving loans under the senior credit facility bears
interest at a rate which is subject to change based on the Leverage Ratio of
Oglebay Norton, in a range of LIBOR plus 150 to 250 basis points or Prime to
Prime plus 25 basis points, based upon the type of borrowing, to be determined
at the option of Oglebay Norton.
C. SECURITY
The senior credit facility is secured by liens on substantially all of the
properties and assets of Oglebay Norton and some of its subsidiaries, including
a pledge of the capital stock of most of Oglebay Norton's direct and indirect
subsidiaries. In addition, KeyBank has a lien on substantially all other future
assets and properties of Oglebay Norton and its subsidiaries, including, without
limitation, accounts receivable, inventory, real property, leasehold interests,
machinery, equipment, contracts, trademarks, copyrights, patents, license
agreements and general intangibles.
D. CERTAIN COVENANTS
Negative covenants include limitations on liens, investments and loans,
mergers and sales of assets, acquisitions, transactions with affiliates, capital
expenditures, dividends and other distributions and payments of Subordinated
Indebtedness.
In addition, the senior credit facility provides that Oglebay Norton must
satisfy the following maintenance covenants:
(1) a maximum Leverage Ratio of 5.00 to 1.00 commencing with the third
quarter of 1998, decreasing to 4.75 to 1.00 in the first quarter of 2000;
(2) a maximum ratio of Total Senior Funded Indebtedness to
Consolidated Pro Forma EBITDA of (A) 3.00 to 1.00 at any time that
Subordinated Indebtedness is equal to or greater than $140,000,000, from
and after December 31, 1998 (B) 3.25 to 1.00 at any time that Subordinated
Indebtedness is equal to or greater than $120,000,000 but less than
$140,000,000, and (C) remaining at 3.50 to 1.00 at any time that
Subordinated Indebtedness is less than $120,000,000;
(3) a minimum ratio of (A) Consolidated Pro-Forma Pre-Tax Earnings
plus Consolidated Pro-Forma Interest Expense to (B) Consolidated Pro-Forma
Interest Expense of 1.50 to 1.00, increasing to 1.75 to 1.00 for the period
ended September 30, 1999 and to 2.00 to 1.00 for the period ended March 31,
2000;
(4) a minimum ratio of Consolidated Pro-Forma Cash Flow to
Consolidated Pro-Forma Fixed Charges of 1.10 to 1.00;
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(5) minimum Consolidated Net Worth of $105,600,000 commencing on the
Closing Date and increasing by the Increase Amount on June 30, 1998 and on
the last day of each fiscal quarter thereafter; and
(6) minimum Consolidated Pro-Forma EBITDA of $75,000,000 for the period
ended September 30, 1999 and thereafter.
E. EVENTS OF DEFAULT
Upon the occurrence of an event of default under the senior credit
facility, the Majority Banks have the right to direct KeyBank to terminate the
commitments under the senior credit facility and to declare all of the
indebtedness due thereunder to become immediately due and payable, except, in
the case of clause (6) below, in which case the commitments are terminated, and
the indebtedness becomes due and payable, automatically. Events of default under
the senior credit facility include:
(1) Oglebay Norton's failure to pay principal, interest or other
amounts when due under the senior credit facility;
(2) Oglebay Norton's breach of any covenant or representation and
warranty under the senior credit facility;
(3) customary cross-default provisions;
(4) some events related to ERISA;
(5) some changes in control of Oglebay Norton;
(6) events of bankruptcy, insolvency or dissolution of Oglebay Norton
or any of its subsidiaries;
(7) the levy of some kinds of judgments against Oglebay Norton or any
of its subsidiaries;
(8) the actual or asserted invalidity of any loan documents against
Oglebay Norton or any of its subsidiaries;
(9) a material adverse change with respect to Oglebay Norton; and
(10) an event of default under the indenture.
F. PREPAYMENT
Oglebay Norton has the right, and in some cases the obligation, to prepay
borrowings under the senior credit facility, subject to penalties, costs and
expenses in defined circumstances. Generally, any prepayment must be in the
aggregate principal sum of not less than $5 million.
IX. CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a general discussion of some of the U.S. federal income
and estate tax consequences of the exchange, acquisition, ownership and
disposition of notes by an initial beneficial owner of notes that holds notes as
capital assets. This discussion is based upon the U.S. federal tax law now in
effect, which is subject to change, possibly retroactively. For purposes of this
discussion:
(1) a "U.S. Holder" means:
(a) a citizen or resident of the United States,
(b) a corporation, or other entity treated as a corporation,
created or organized in the United States or under the laws of the
United States or of any state of the United States,
(c) an estate whose income is includable in gross income for U.S.
federal income tax purposes regardless of its source,
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(d) a partnership, or other entity treated as a partnership,
created or organized in the United States or under the laws of the
United States or of any state of the United States and properly treated
as a United States person for U.S. federal tax purposes, or
(e) a trust, if a U.S. court is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the
trust, except that, to the extent provided in Treasury regulations, some
trusts in existence on August 20, 1996 and treated as United States
persons prior to that date may elect to continue to be treated as United
States persons without regard to the requirements set forth in this
clause (e); and
(2) interest, including "OID" (as defined below), and gain on the
sale, exchange or other disposition of a note will generally be considered
to be "U.S. trade or business income" if this income or gain is:
(a) effectively connected with the conduct of a U.S. trade or
business of the holder, or
(b) in the case of most treaty residents, attributable to a
permanent establishment, or, in the case of an individual, a fixed base
in the United States.
For purposes of the U.S. withholding tax on interest, including "OID" (as
defined below), discussed below, a Non-U.S. Holder means a holder who or that is
not a U.S. Holder, as defined above. The tax treatment of the holders of the
notes may vary depending upon their particular situations. In addition, other
holders, including insurance companies, tax exempt organizations, financial
institutions, broker-dealers, controlled foreign corporations within the meaning
of Section 957 of the Internal Revenue Code, foreign persons that are hybrid
entities, persons that actually or constructively own 10% or more of Oglebay
Norton's stock, and U.S. expatriates, may be subject to special rules not
discussed below. Prospective investors are urged to consult their tax advisors
regarding the U.S. federal tax consequences of acquiring, holding and disposing
of notes, as well as any tax consequences that may arise under the laws of any
foreign, state, local or other taxing jurisdiction. New final regulations
dealing with withholding tax on income paid to foreign persons and related
matters (the "New Withholding Regulations") issued by the Treasury Department
generally do not significantly alter the substantive withholding and information
reporting requirements discussed herein, but unify current certification
procedures and forms and clarify reliance standards. The New Withholding
Regulations will generally be effective for payments made after December 31,
1999, subject to the defined transition rules. Accordingly, payments made on or
before December 31, 1999 will continue to be subject to the regulations that
existed before the New Withholding Regulations were issued. THE NEW WITHHOLDING
REGULATIONS ARE QUITE COMPLEX. NON-U.S. HOLDERS ARE STRONGLY URGED TO CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE NEW WITHHOLDING REGULATIONS.
The exchange of the outstanding notes for exchange notes should not be
treated as a taxable transaction to U.S. Holders or to Non-U.S. Holders for
United States federal income tax purposes. Rather, the exchange notes received
should be treated as a continuation of the outstanding notes surrendered in the
exchange. As a result, there should be no material United States federal income
tax consequences to U.S. Holders or to Non-U.S. Holders exchanging outstanding
notes for exchange notes.
U.S. HOLDERS
STATED INTEREST AND ORIGINAL ISSUE DISCOUNT
The stated interest on a note will be taxable to a U.S. Holder as ordinary
interest income either at the time it accrues or is received, depending upon the
U.S. Holder's method of accounting for federal income tax purposes. The notes
will be issued with original issue discount ("OID") for federal income tax
purposes. All U.S. Holders will be required to include OID in income as it
accrues, regardless of the Holder's regular method of accounting for federal
income tax purposes. OID generally will be treated as interest income to the
U.S. Holder and will accrue on a yield-to-maturity basis over the life of the
note, as discussed below.
The amount of OID with respect to a note will be an amount equal to the
excess of the stated redemption price at maturity of the note over the "issue
price" of the note. For this purpose, the "issue price" of a note is the first
price at which a substantial part of the notes are sold to the public for money,
excluding sales to bond houses,
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brokers, or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers. The stated redemption price at
maturity of each note will include all cash payments required to be made under
the note through maturity, other than payments of "qualified stated interest."
Stated interest on the note will qualify as qualified stated interest.
Accordingly, the amount of OID with respect to a note will be equal to the
excess of the note's principal amount over its issue price.
The amount of OID accruing to a Holder with respect to any note will be the
sum of the "daily portions" of OID with respect to the note for each day during
the taxable year, or portion of the taxable year, on which the Holder owns the
note ("accrued OID"). The daily portion is determined by allocating to each day
in any "accrual period" a pro rata portion of the OID allocable to that accrual
period. An accrual period for a note may be of any length and may vary in length
over the term of a note provided that each accrual period is no longer than one
year and each scheduled payment of principal or interest occurs either on the
final day or on the first day of an accrual period. The amount of OID accruing
during any full accrual period with respect to a note will be equal to the
following amount:
(1) the "adjusted issue price" of the note at the beginning of that
accrual period, multiplied by
(2) the yield to maturity of the note, taking into account the length
of the accrual period. The adjusted issue price of a note at the beginning
of its first accrual period will be equal to its issue price. The adjusted
issue price at the beginning of any subsequent accrual period will be equal
to:
(a) the adjusted issue price at the beginning of the preceding
accrual period, plus
(b) the amount of OID accrued during the preceding accrual period,
minus
(c) any payments made on the note during the preceding accrual
period and on the first day of the subsequent accrual period, other than
payments of stated interest on a note.
Under these rules, a Holder generally will have to include in income
increasingly greater amounts of OID in successive accrual periods. The "yield to
maturity" of a note is the discount rate that, when used in computing the
present value of all payments to be made on a note, produces an amount equal to
the issue price of the note.
TAX BASIS
A U.S. Holder's adjusted tax basis in a note at a given date generally will
be equal to the purchase price paid by the U.S. Holder for the note, increased
by the amount of OID previously included in income with respect to the notes and
decreased by all prior payments received on the notes, other than payments of
stated interest.
SALES OR REDEMPTION OF NOTES
Unless a nonrecognition provision applies, the sale, exchange, redemption,
including in accordance with an offer by Oglebay Norton, or other disposition of
a note (other than an exchange pursuant to the exchange offer) will be a taxable
event for federal income tax purposes ("Taxable Disposition"). In this event, a
U.S. Holder generally will recognize gain or loss equal to the difference
between:
(1) the amount of cash plus the fair market value of any other
property received upon the Taxable Disposition other than in respect of
accrued and unpaid stated interest thereon, and
(2) the U.S. Holder's adjusted tax basis therein other than any tax
basis attributable to accrued and unpaid stated interest.
Gains or losses of this type generally will be capital gains or losses, and will
be long-term capital gains or losses if the U.S. Holder has held the note for
longer than one year. The deductibility of capital losses is subject to
limitations under the Code.
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BACKUP WITHHOLDING
A U.S. Holder of notes may be subject to "backup withholding" at a rate of
31% with respect to some types of "reportable payments" including interest
payments and, under defined circumstances, principal payments on the notes.
These backup withholding rules apply if the U.S. Holder, among other things:
(1) fails to furnish a social security number or other taxpayer
identification number ("TIN") certified under penalties of perjury within a
reasonable time after the request therefor,
(2) furnishes an incorrect TIN,
(3) fails to report properly interest, or
(4) under some types of circumstances, fails to provide a certified
statement, signed under penalties of perjury, that the TIN furnished is the
correct number and that the Holder is not subject to backup withholding.
A U.S. Holder who does not provide Oglebay Norton with its correct TIN also may
be subject to penalties imposed by the Internal Revenue Service (the "Service").
Any amount withheld from a payment to a U.S. Holder under the back-up
withholding rules is creditable against the U.S. Holder's federal income tax
liability, provided the required information is furnished to the Service. Backup
withholding will not apply, however, with respect to payments made to some types
of Holders, including corporations and tax-exempt organizations, provided their
exemption from backup withholding is properly established.
Oglebay Norton will report to the U.S. Holders of notes and to the Service
the amount of any "reportable payments" for each calendar year and the amount of
tax withheld, if any, with respect to these payments.
NON-U.S. HOLDERS
STATED INTEREST AND OID
Generally, any interest, including OID, that is paid to a Non-U.S. Holder
on a Note and that is not U.S. trade or business income will not be subject to
U.S. federal income tax if the interest qualifies as "portfolio interest."
Interest on the notes will generally qualify as portfolio interest if either:
(1) the beneficial owner of a note certifies, under penalties of
perjury, to Oglebay Norton or its Paying Agent, as the case may be, on a
Form W-8 or a permitted substitute or successor form, that the owner is not
a United States person and provides the Owner's name and address, or
(2) a securities clearing organization, bank or other financial
institution that holds customer securities in the ordinary course of its
trade or business (a "Financial Institution") and holds the note on behalf
of a beneficial owner of the note, certifies, under penalties of perjury,
that the certificate has been received by it or by a Financial Institution
between it and the beneficial owner and furnishes the payor with a copy of
the certificate.
The New Withholding Regulations will generally require, in the case of notes
held by a foreign partnership, that the certificate be provided by the partners
rather than by the foreign partnership, and that the partnership provide defined
information including a U.S. TIN.
The gross amount of payments to a Non-U.S. Holder of interest that do not
qualify for the portfolio interest exemption and that are not U.S. trade or
business income will be subject to withholding of U.S. federal income tax at a
30% rate, unless a U.S. income tax treaty applies to reduce or eliminate that
withholding. U.S. trade or business income will be subject to U.S. federal
income tax on a net income basis at applicable graduated tax rates in the same
manner as a United States person and would be exempt from the 30% withholding
tax described above. In the case of a Non-U.S. Holder that is a corporation, the
U.S. trade or business income may also, under defined circumstances, be subject
to an additional branch profits tax at a 30% rate, or, if applicable, a lower
treaty rate.
To claim the benefit of a tax treaty or to claim an exemption from
withholding because interest income is U.S. trade or business income, a Non-U.S.
Holder must provide Oglebay Norton with a properly executed
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Form 1001 or 4224, as applicable, prior to the payment of interest. These forms
must be periodically updated. Under the New Withholding Regulations, a holder
claiming either exemption will be required to provide a Form W-8, subject to
defined transition rules, and may be required to provide a TIN. Special
procedures are provided in the New Withholding Regulations for payments through
qualified intermediaries. Prospective investors should consult their own tax
advisors regarding the effect to them, if any, of the New Withholding
Regulations.
A Non-U.S. Holder of a note that is eligible for a reduced rate of U.S.
withholding tax in accordance with an income tax treaty may obtain a refund of
any amounts currently withheld by filing an appropriate claim for a refund with
the Internal Revenue Service.
GAIN ON DISPOSITION
A Non-U.S. Holder will generally not be subject to U.S. federal income tax
on gain recognized on a sale, redemption or other disposition of a note unless:
(1) the gain is U.S. trade or business income, or
(2) in the case of a Non-U.S. Holder who is a nonresident alien
individual and holds the note as a capital asset, that holder is present in
the United States for 183 or more days in the taxable year and other
defined requirements are met.
FEDERAL ESTATE TAXES
If interest on the notes is exempt from withholding of U.S. federal income
tax under the portfolio interest rules described above, the notes will not be
included in the estate of a deceased Non-U.S. Holder for U.S. federal estate tax
purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For payments made on or before December 31, 1999, Oglebay Norton will,
where required, report to the holders of notes and the Internal Revenue Service
the amount of any interest paid on the notes in each calendar year and the
amounts of tax withheld, if any, with respect to those payments. Copies of these
information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.
In the case of payments of interest to Non-U.S. Holders, temporary Treasury
regulations provide that the 31% backup withholding tax and some types of
information reporting will not apply to these payments with respect to which
either the requisite certification, as described above, has been received or an
exemption has otherwise been established; provided that neither Oglebay Norton
nor its payment agent has actual knowledge that the holder is a United States
person or that the conditions of any other exemption are not in fact satisfied.
Under temporary Treasury regulations, these information reporting and backup
withholding requirements will apply, however, to the gross proceeds paid to a
Non-U.S. Holder on the disposition of the notes by or through a U.S. office of a
U.S. or foreign broker, unless the holder certifies to the broker under
penalties of perjury as to its name, address and status as a foreign person or
the holder otherwise establishes an exemption. Information reporting
requirements, but not backup withholding, will also apply to a payment of the
proceeds of a disposition of the notes by or through a foreign office of a U.S.
broker or foreign brokers with some types of relationships to the United States
unless that broker has documentary evidence in its file that the holder of the
notes is not a United States person, and that broker has no actual knowledge to
the contrary, or the holder establishes an exception. Neither information
reporting nor backup withholding generally will apply to a payment of the
proceeds of a disposition of the notes by or through a foreign office of a
foreign broker not subject to the preceding sentence.
The New Withholding Regulations provide that to the extent a Non-U.S.
Holder certifies on Form W-8, or a permitted substitute form, as to the holder's
status as a foreign person, the backup withholding provisions and the
information reporting provisions will generally not apply. If a Non-U.S. Holder
fails to provide the certification, this holder may be subject to some types of
information reporting and the 31% backup withholding tax.
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Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the Non-U.S.
Holder's U.S. federal income tax liability, provided that the required
information is furnished to the Service.
X. PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate in the
exchange offer in connection with a distribution of the exchange notes. Each
broker-dealer that receives exchange notes for its own account in accordance
with the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the exchange notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of exchange notes received for its own account in
exchange for outstanding notes where those outstanding notes were acquired as a
result of market-making activities or other trading activities. Oglebay Norton
has agreed that for a period of 90 days after the expiration date of the
exchange offer, it will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any resale subject to
the conditions described under "VI.B. The Exchange Offer -- Resale of the
Exchange Notes."
Oglebay Norton will not receive any proceeds from any sale of exchange
notes by broker-dealers. Exchange notes received by broker-dealers for their own
account in accordance with the exchange offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the exchange notes or a
combination of those methods of resale, at market prices prevailing at the time
of resale, at prices related to the prevailing market prices, or negotiated
prices. Any resale may be made directly to purchasers or through brokers or
dealers who may receive compensation in the form of commission or concessions
from any broker-dealer and/or the purchasers of any exchange notes. Any broker
or dealer that participates in a distribution of the exchange notes may be
deemed to be an "underwriter" within the meaning of the Securities Act of 1933,
and any profit on the resale of exchange notes and any commissions or
concessions received by those persons may be deemed to be underwriting
compensation under the Securities Act of 1933. The Letter of Transmittal states
that by acknowledging that it will deliver and by delivering a prospectus a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933.
Oglebay Norton has agreed to pay all expenses incident to the exchange
offer other than commissions or concessions of any brokers or dealers and
expenses of counsel for the holders of the exchange notes and will indemnify the
holders of the exchange notes, including any broker-dealers, against some
liabilities, including some liabilities under the Securities Act of 1933.
XI. LEGAL MATTERS
Jones, Day, Reavis & Pogue, Cleveland, Ohio will pass upon the validity of
the exchange notes for Oglebay Norton.
XII. EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements at December 31, 1998 and 1997, and for each of the three
years in the period ended December 31, 1998, as set forth in their report. We've
included our financial statements in the prospectus and elsewhere in the
registration statement in reliance on Ernst & Young LLP's report, given on their
authority as experts in accounting and auditing.
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XIII. WHERE YOU CAN GET MORE INFORMATION
A. AVAILABLE INFORMATION
Oglebay Norton is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. These reports, proxy statements and other
information can be inspected and copied at:
- The Public Reference Room maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and
- The Commission's regional offices located at:
- Seven World Trade Center, 13th Floor, New York, New York 10048, and
- 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You can obtain information about the Public Reference Room by calling the
Commission at 1-800-SEC-0330. Copies of this material may be obtained at
prescribed rates by writing the Commission, Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site,
located at http://www.sec.gov., that contains reports, proxy and information
statements and other information regarding registrants, including Oglebay
Norton, that file electronically with the Commission.
B. INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows Oglebay Norton to "incorporate by reference"
information into this prospectus. This means Oglebay Norton can disclose
information to you by referring you to another document filed by Oglebay Norton
with the Commission. Oglebay Norton will make those documents available to you
without charge upon request. Requests for those documents should be directed to
Oglebay Norton Company, 1100 Superior Avenue, Cleveland, Ohio 44114-2598,
Attention: Investor Relations, telephone: (216) 861-3300. This prospectus
incorporates by reference the following documents:
- Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the Commission on March 29, 1999;
- Current Report on Form 8-K filed with the Commission on March 26, 1999;
- Current Report on Form 8-K of ON Marine Services Company (formerly
Oglebay Norton Company), filed with the Commission on March 8, 1999; and
- Proxy Statement, dated as of March 23, 1999, filed with the Commission in
definitive form on March 29, 1999 with respect to the information
required by Items 401 (management), 402 (executive compensation) and 404
(certain relationships and related transactions) of Regulation S-K
promulgated under the Securities Act of 1933 and the Securities Exchange
Act of 1934.
Oglebay Norton is also incorporating by reference additional documents it
may file in accordance with Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus and before the exchange
of the outstanding notes for the exchange notes. This additional information is
a part of this prospectus from the date of filing of those documents.
Any statements made in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference in
this prospectus modifies or supersedes the statement. Any statement so modified
or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
The information relating to Oglebay Norton contained in this prospectus
should be read together with the information in the documents incorporated by
reference. In addition, some of the information, including financial
information, contained in this prospectus or incorporated in this prospectus by
reference should be read in
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conjunction with documents filed with the Commission by Oglebay Norton's
predecessor, ON Marine Services Company, formerly known as Oglebay Norton
Company.
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XIV. INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OGLEBAY NORTON COMPANY:
AUDITED CONSOLIDATED FINANCIAL STATEMENTS:
Report of Independent Auditors.............................. F-2
Consolidated Statement of Operations for the years ended
December 31, 1998, 1997 and 1996.......................... F-3
Consolidated Balance Sheet at December 31, 1998 and 1997.... F-4
Consolidated Statement of Cash Flows for the years ended
December 31, 1998, 1997 and 1996.......................... F-5
Consolidated Statement of Stockholders' Equity for the years
ended December 31, 1998, 1997 and 1996.................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>
F-1
<PAGE> 74
REPORT OF INDEPENDENT AUDITORS
BOARD OF DIRECTORS
OGLEBAY NORTON COMPANY
We have audited the accompanying consolidated balance sheet of Oglebay
Norton Company and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Oglebay Norton Company and subsidiaries at December 31, 1998 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cleveland, Ohio
February 16, 1999
F-2
<PAGE> 75
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
NET SALES AND OPERATING REVENUES................ $238,852,390 $145,184,849 $129,697,228
COSTS AND EXPENSES
Cost of goods sold and operating expenses..... 157,959,384 98,421,276 94,395,629
Depreciation, depletion and amortization...... 20,874,673 8,946,878 11,259,284
General, administrative and selling
expenses................................... 22,982,895 13,352,068 12,388,863
------------ ------------ ------------
201,816,952 120,720,222 118,043,776
------------ ------------ ------------
INCOME FROM OPERATIONS.......................... 37,035,438 24,464,627 11,653,452
Gain on disposition of assets................. 124,540 5,548,036 3,150,434
Interest, dividends and other income.......... 1,750,239 2,693,101 2,790,859
Interest expense.............................. (19,280,532) (2,834,445) (3,003,639)
Other expense................................. (1,935,068) (4,295,342) (2,011,072)
------------ ------------ ------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES......................................... 17,694,617 25,575,977 12,580,034
INCOME TAXES:
Current....................................... (2,256,000) 6,967,000 1,387,000
Deferred...................................... 7,915,000 253,000 154,000
------------ ------------ ------------
5,659,000 7,220,000 1,541,000
------------ ------------ ------------
INCOME FROM CONTINUING OPERATIONS............... 12,035,617 18,355,977 11,039,034
Discontinued operations:
(Loss) income from operations................. -0- (841,727) 3,947,518
(Loss) gain from disposals.................... -0- (1,262,700) 570,433
------------ ------------ ------------
(Loss) income from discontinued operations...... -0- (2,104,427) 4,517,951
------------ ------------ ------------
NET INCOME...................................... $ 12,035,617 $ 16,251,550 $ 15,556,985
============ ============ ============
PER SHARE AMOUNTS:
Income (loss) per common share -- basic:
Continuing operations......................... $ 2.52 $ 3.84 $ 2.26
Discontinued operations....................... (.44) .93
------------ ------------ ------------
NET INCOME PER SHARE -- BASIC................... $ 2.52 $ 3.40 $ 3.19
============ ============ ============
Income (loss) per common share -- assuming
dilution:
Continuing operations......................... $ 2.51 $ 3.81 $ 2.26
Discontinued operations....................... (.44) .92
------------ ------------ ------------
NET INCOME PER SHARE -- ASSUMING DILUTION....... $ 2.51 $ 3.37 $ 3.18
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE> 76
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 1,940,410 $ 29,885,922
Accounts receivable (net of reserve for doubtful accounts
of $1,194,000 in 1998 and $723,000 in 1997)............. 36,624,374 21,490,725
Income taxes receivable................................... 3,460,026 -0-
Inventories
Raw materials and finished products..................... 19,627,908 1,210,940
Operating supplies...................................... 8,822,183 3,382,764
------------ ------------
28,450,091 4,593,704
Deferred income taxes..................................... 2,510,745 3,050,091
Prepaid insurance and other expenses...................... 5,069,554 1,300,715
Discontinued operations................................... -0- 15,571,082
------------ ------------
TOTAL CURRENT ASSETS........................................ 78,055,200 75,892,239
PROPERTY AND EQUIPMENT
Land and improvements..................................... 27,207,563 8,654,241
Mineral reserves.......................................... 88,477,552 -0-
Buildings and improvements................................ 26,550,372 16,459,414
Machinery and equipment................................... 423,959,452 279,844,911
------------ ------------
566,194,939 304,958,566
Less allowances for depreciation, depletion and
amortization............................................ 218,752,499 154,022,177
------------ ------------
347,442,440 150,936,389
GOODWILL (net of accumulated amortization of $2,370,000 in
1998 and $1,171,000 in 1997).............................. 89,262,233 5,337,459
PREPAID PENSION COSTS....................................... 31,303,221 25,137,863
OTHER ASSETS................................................ 19,560,668 5,919,935
------------ ------------
TOTAL ASSETS................................................ $565,623,762 $263,223,885
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt......................... $ 9,506,345 $ 9,086,708
Accounts payable.......................................... 10,332,250 6,875,498
Payrolls and other accrued compensation................... 10,446,352 7,547,241
Accrued expenses.......................................... 14,908,743 11,459,428
Accrued interest expense.................................. 5,481,665 691,081
Income taxes payable...................................... 68,741 2,277,749
------------ ------------
TOTAL CURRENT LIABILITIES................................... 50,744,096 37,937,705
LONG-TERM DEBT, less current portion........................ 302,559,729 38,445,616
POSTRETIREMENT BENEFITS OBLIGATION.......................... 27,181,435 24,341,252
OTHER LONG-TERM LIABILITIES................................. 22,059,322 23,672,960
DEFERRED INCOME TAXES....................................... 36,145,768 21,109,949
STOCKHOLDERS' EQUITY
Common stock, par value $1.00 per share -- authorized
10,000,000 shares; issued 7,253,332 shares.............. 7,253,332 7,253,332
Additional capital........................................ 7,480,572 6,288,822
Retained earnings......................................... 146,852,300 138,628,719
Accumulated other comprehensive income (expense).......... (708,549) -0-
------------ ------------
160,877,655 152,170,873
Treasury stock, at cost -- 2,487,901 and 2,501,152 shares
in 1998 and 1997, respectively.......................... (33,944,243) (33,739,795)
Unallocated Employee Stock Ownership Plan shares.......... -0- (714,675)
------------ ------------
126,933,412 117,716,403
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. $565,623,762 $263,223,885
============ ============
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE> 77
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1998 1997 1996
------------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income..................................... $ 12,035,617 $16,251,550 $15,556,985
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and
amortization........................... 20,874,673 8,946,878 11,259,284
Deferred income taxes..................... 7,915,000 253,000 154,000
Gain on disposition of assets............. (124,540) (5,548,036) (3,150,434)
Loss (gain) from disposal of discontinued
operations............................. -0- 1,262,700 (570,433)
Increase in prepaid pension costs......... (4,457,662) (4,204,687) (3,125,094)
Decrease (increase) in accounts
receivable............................. 4,008,657 2,671,391 (945,050)
Increase in income taxes receivable....... (3,460,026) -0- -0-
(Increase) decrease in inventories........ (4,452,346) (697,639) 142,466
(Decrease) increase in accounts payable... (8,636,517) 1,367,172 1,750,056
Increase (decrease) in payrolls and other
accrued compensation................... 1,800,245 881,961 (366,171)
(Decrease) increase in accrued expenses... (981,246) 715,152 (720,468)
Increase (decrease) in accrued interest... 4,790,584 642,865 (23,173)
(Decrease) increase in income taxes
payable................................ (2,492,577) 1,464,873 2,704,219
Other operating activities................ (671,143) (1,071,891) 2,500,569
Net operating activities of discontinued
operations............................. -0- 754,820 (5,000,521)
------------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES... 26,148,719 23,690,109 20,166,235
INVESTING ACTIVITIES
Capital expenditures........................... (19,119,185) (24,554,382) (5,573,238)
Acquisition of businesses...................... (239,639,230) (1,600,000) -0-
Proceeds from sale of assets................... 874,618 8,191,884 5,543,361
Proceeds from sale of discontinued
operations.................................. 9,082,170 -0- 5,000,000
Net investing activities of discontinued
operations.................................. -0- (662,014) (5,739,689)
------------- ----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES...... (248,801,627) (18,624,512) (769,566)
FINANCING ACTIVITIES
Payments on long-term debt..................... (94,628,792) (8,476,450) (14,976,450)
Additional long-term debt...................... 302,650,000 17,000,000 -0-
Financing costs................................ (9,397,340) -0- -0-
Payments of dividends.......................... (3,812,036) (3,583,523) (3,162,341)
Purchases of treasury stock.................... (600,198) (1,969,984) (2,068,032)
------------- ----------- -----------
NET CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES................................ 194,211,634 2,970,043 (20,206,823)
Effect of exchange rate changes on cash.......... 495,762 -0- -0-
------------- ----------- -----------
(Decrease) increase in cash and cash
equivalents.................................... (27,945,512) 8,035,640 (810,154)
Cash and cash equivalents, January 1............. 29,885,922 21,850,282 22,660,436
------------- ----------- -----------
CASH AND CASH EQUIVALENTS, DECEMBER 31........... $ 1,940,410 $29,885,922 $21,850,282
============= =========== ===========
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE> 78
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
OTHER COMPREHENSIVE
INCOME (EXPENSE)
-------------------------
FOREIGN UNALLOCATED
CURRENCY COMMON EMPLOYEE STOCK
COMMON ADDITIONAL RETAINED UNREALIZED TRANSLATION STOCK IN OWNERSHIP
STOCK CAPITAL EARNINGS GAINS ADJUSTMENT TREASURY PLAN SHARES
---------- ----------- ------------ ----------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996...... $3,626,666 $ 9,078,611 $113,566,048 $ 1,468,476 $(29,806,819) $(1,667,575)
Comprehensive income:
Net income.................. 15,556,985
Change in unrealized
gains..................... (1,058,029)
Total comprehensive
income....................
Dividends, $.65 per share..... (3,162,341)
Tax benefit of unallocated
shares in ESOP.............. 57,460
Stock plans................... 339,772 41,327
Purchases of treasury stock... (2,068,032)
Allocated ESOP shares......... 476,450
---------- ----------- ------------ ----------- ------------ -----------
Balance, December 31, 1996.... 3,626,666 9,475,843 125,960,692 410,447 (31,833,524) (1,191,125)
Comprehensive income:
Net income.................. 16,251,550
Change in unrealized
gains..................... (410,447)
Total comprehensive
income....................
Dividends, $.75 per share..... (3,583,523)
Tax benefit of unallocated
shares in ESOP.............. 68,250
Stock plans................... 371,395 63,713
Two-for-one stock split....... 3,626,666 (3,626,666)
Purchases of treasury stock... (1,969,984)
Allocated ESOP shares......... 476,450
---------- ----------- ------------ ----------- ------------ -----------
Balance, December 31, 1997.... 7,253,332 6,288,822 138,628,719 -0- (33,739,795) (714,675)
Comprehensive income:
Net income.................. 12,035,617
Foreign currency translation
adjustment................ $(708,549)
Total comprehensive
income....................
Dividends, $.80 per share..... (3,812,036)
Tax benefit of unallocated
shares in ESOP.............. 72,800
Stock plans................... 1,118,950 395,750
Purchase of treasury stock.... (600,198)
Allocated ESOP shares......... 714,675
---------- ----------- ------------ ----------- --------- ------------ -----------
Balance, December 31, 1998.... $7,253,332 $ 7,480,572 $146,852,300 $ -0- $(708,549) $(33,944,243) $ -0-
========== =========== ============ =========== ========= ============ ===========
<CAPTION>
TOTAL
STOCKHOLDERS'
EQUITY
-------------
<S> <C>
Balance, January 1, 1996...... $ 96,265,407
Comprehensive income:
Net income.................. 15,556,985
Change in unrealized
gains..................... (1,058,029)
------------
Total comprehensive
income.................... 14,498,956
Dividends, $.65 per share..... (3,162,341)
Tax benefit of unallocated
shares in ESOP.............. 57,460
Stock plans................... 381,099
Purchases of treasury stock... (2,068,032)
Allocated ESOP shares......... 476,450
------------
Balance, December 31, 1996.... 106,448,999
Comprehensive income:
Net income.................. 16,251,550
Change in unrealized
gains..................... (410,447)
------------
Total comprehensive
income.................... 15,841,103
Dividends, $.75 per share..... (3,583,523)
Tax benefit of unallocated
shares in ESOP.............. 68,250
Stock plans................... 435,108
Two-for-one stock split....... -0-
Purchases of treasury stock... (1,969,984)
Allocated ESOP shares......... 476,450
------------
Balance, December 31, 1997.... 117,716,403
Comprehensive income:
Net income.................. 12,035,617
Foreign currency translation
adjustment................ (708,549)
------------
Total comprehensive
income.................... 11,327,068
Dividends, $.80 per share..... (3,812,036)
Tax benefit of unallocated
shares in ESOP.............. 72,800
Stock plans................... 1,514,700
Purchase of treasury stock.... (600,198)
Allocated ESOP shares......... 714,675
------------
Balance, December 31, 1998.... $126,933,412
============
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE> 79
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE A -- ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. Intercompany
transactions and accounts have been eliminated upon consolidation.
CASH EQUIVALENTS: The Company considers all highly liquid investments with
a maturity of three months or less at the date of purchase to be cash
equivalents. Cash equivalents are stated at cost which approximates market
value.
INVENTORIES: Inventories are stated at the lower of average cost (first-in,
first-out method) or market.
MARKETABLE SECURITIES: Available-for-sale securities are carried at fair
value, based on quoted market prices. Realized gains and losses on the sale of
such securities are based on average cost. The Company realized gains on the
sale of securities of $656,000 (proceeds of $933,000) in 1997 and $2,076,000
(proceeds of $3,130,000) in 1996.
PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. The
Company provides depreciation on buildings and improvements and machinery and
equipment using the straight-line method over the assets estimated useful lives
that range from 2 to 60 years. Depletion of mineral reserves is recognized on a
units-of-production basis. Effective January 1, 1997, the Company extended the
estimated useful lives and increased the estimated salvage values for certain
vessels in its Marine Transportation fleet. The effect of these changes in
estimate reduced depreciation by $3,178,000 and increased net income by
$2,097,000 ($0.44 per share, assuming dilution) for the year ended December 31,
1997.
INTANGIBLE ASSETS: Intangible assets, consisting primarily of the purchase
price in excess of net assets of acquired businesses ("Goodwill"), are amortized
using the straight-line method over the periods of expected benefit, which range
from 15 to 40 years. Financing costs are amortized using the straight-line
method over the periods of the loan agreements, which range from 3 to 10 years.
IMPAIRMENT OF LONG-LIVED ASSETS: The Company assesses the recoverability of
its long-lived and intangible assets by determining whether the amortization of
the remaining balance of an asset over its remaining useful life can be
recovered through undiscounted future operating cash flows. If impairment
exists, the carrying amount of the related asset is reduced.
FOREIGN CURRENCY TRANSLATION: The financial statements of the Company's
subsidiaries outside the United States ("U.S.") are generally measured using the
local currency as the functional currency. Assets and liabilities of these
subsidiaries are translated at the rates of exchange at the balance sheet dates.
Income and expense items are translated at average monthly rates of exchange.
Translation adjustments are included in accumulated comprehensive income
(expense), a separate component of stockholders' equity. Generally, gains and
losses from foreign currency transactions of these subsidiaries and the U.S.
parent are included in net income. Gains and losses from foreign currency
transactions which hedge a net investment in a foreign subsidiary and from
intercompany foreign currency transactions of a long-term investment nature are
included in accumulated comprehensive income (loss).
DERIVATIVE FINANCIAL INSTRUMENTS: The Company periodically uses derivative
financial instruments to manage its exposure to fluctuations in interest rates.
The Company designates its interest rate swap agreements as hedges of specific
debt instruments and recognizes the interest differentials as adjustments to
interest expense over the terms of the related debt obligations. When using
interest rate swap agreements, the intermediaries to such agreements expose the
Company to the risk of nonperformance, though such risk is not considered likely
under the circumstances. The Company does not hold or issue financial
instruments for trading purposes.
F-7
<PAGE> 80
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
STOCK PLANS: The Company accounts for stock based compensation in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations.
USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the Company's
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates and assumptions.
NEW FINANCIAL ACCOUNTING STANDARDS: Statement of Financial Accounting
Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued in 1998. This SFAS establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires that
all derivatives be recognized as assets or liabilities on the balance sheet at
fair value. The Company will adopt SFAS No. 133 on January 1, 2000, as required;
and it is not expected to have a material impact on its consolidated results of
operations or financial position.
REVENUE RECOGNITION: Sales are generally recognized when products are
shipped to customers. Operating revenues are recognized as services are provided
to customers over the Great Lakes sailing season.
RECLASSIFICATIONS: Certain amounts in prior years have been reclassified to
conform with the 1998 consolidated financial statement presentation.
NOTE B -- ACQUISITIONS AND DISPOSITIONS
In the first quarter of 1998, the Company's Industrial Sands segment
acquired all of the outstanding common shares of Colorado Silica Sands, Inc.
("Colorado Silica") for $6,127,000 in cash and a $1,067,000 note payable over
three years.
In the second quarter of 1998, the Company acquired for cash all of the
outstanding common shares of Global Stone Corporation ("Global Stone"), which
formed the Company's new Lime and Limestone business segment. Global Stone has
eight operations in the United States and Canada, and is engaged in the mining,
production and marketing of lime, chemical limestone and construction aggregate
used in a variety of manufacturing processes and industries, including iron and
steel, pulp and paper, chemical, environmental, agricultural and construction.
The total purchase price was $227,600,000, including the assumption of
$54,000,000 of net debt.
In the second quarter of 1998, the Company also purchased the assets of a
limestone operation in Port Inland, Michigan ("Port Inland") for $35,200,000 in
cash. The acquisition included inventories, land, mineral reserves, equipment
and other tangible property used in the business of mining, processing,
marketing and distributing limestone, chemical limestone and construction
aggregate. Port Inland is now a part of the Lime and Limestone segment.
In the third quarter of 1998, the Company's Lime and Limestone segment
purchased the assets of Filler Products, Inc. ("Filler Products"), a privately
owned producer of chemical limestone in Chatsworth, Georgia, for $24,200,000 in
cash. The acquisition included inventories, land, mineral reserves, equipment
and other tangible property used in the business of mining, processing,
marketing and distributing chemical limestone to the carpet and decorative
gardening industries.
All acquisitions have been accounted for under the purchase method. The
results of operations of the acquired businesses are included in the
consolidated financial statements from the dates of acquisition. The purchase
prices have been allocated, on a preliminary basis, based on estimated fair
values at the dates of acquisition. The purchase price allocations will be
finalized during 1999 as the asset and liability valuations are completed.
F-8
<PAGE> 81
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following unaudited pro forma information presents a summary of
consolidated results of operations (in thousands, except per share data) for the
Company and the acquisitions of Global Stone, Port Inland and Colorado Silica
for the years ended December 31, 1998 and 1997 as if the acquisitions had
occurred on January 1, 1997. The pro forma adjustments give effect to (i) the
amortization of goodwill, (ii) the amortization of the write-up of property and
equipment to fair market value, (iii) the interest expense on debt incurred to
fund the acquisitions and (iv) the related income tax effects. This unaudited
pro forma information (i) assumes that the Company incurred all acquisition
related debt as of January 1, 1997, (ii) included operating results for periods
of time prior to the Company's ownership and (iii) takes into consideration
expense reductions of $1,200,000 during 1998 and $1,600,000 during 1997,
principally due to a realized reduction of general and administrative costs. The
pro forma results do not necessarily represent results that would have occurred
if the acquisitions had taken place on the basis assumed above, nor are they
indicative of the results of future combined operations.
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Revenues................................................ $288,000 $283,000
Net Income.............................................. 6,300 9,800
Earnings per share -- basic............................. 1.31 2.04
Earnings per share -- assuming dilution................. 1.30 2.03
</TABLE>
In 1997, the Company purchased, for $3,400,000 in cash and notes payable,
the assets of two sand operations. These operations screen sand to make
specialty grades and sizes and supply certain blended sand and organic mixes for
end users, such as golf courses, playgrounds, parks and sports fields. Operating
results for these businesses have been included within the Industrial Sands
business segment since acquisition, and are not material. Additionally, two
self-unloading vessels were purchased for $17,000,000. These vessels have been
operated on the Great Lakes under charter, as part of the Company's Marine
Transportation fleet for over 20 years.
In the fourth quarter of 1997, the Company sold its interest in certain
coal reserves for $6,000,000 in cash. The sale resulted in a $5,212,000 pretax
gain (net gain of $3,388,000 or $0.70 per share, assuming dilution). In 1996,
the Company sold an inactive business resulting in a pretax gain of $625,000
(net gain of $625,000 or $0.13 per share, assuming dilution).
NOTE C -- DISCONTINUED OPERATIONS
In December 1997, the Company decided to divest the assets of its
Engineered Materials business segment. Hot top operations were sold in December
1997 and the sale of its metallurgical treatment operations occurred in May
1998. The loss upon disposition of these operations was $1,263,000 (net of an
income tax benefit of $807,000 in 1997). No gain or loss was incurred on the
sale of discontinued operations in 1998. In December 1996, the Company sold its
interest in Eveleth Mines and certain mining equipment for $5,000,000,
completing its exit from the iron ore business. The sale of these operations
resulted in a gain of $570,000 (net of an income tax benefit of $744,000).
F-9
<PAGE> 82
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The results of discontinued operations were as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Net sales................................................. $30,883 $57,730
Cost of goods sold........................................ 27,180 49,703
------- -------
Gross margin.............................................. 3,703 8,027
Depreciation and amortization............................. 1,691 1,793
Selling, general and administrative expenses.............. 3,279 3,379
Loss on sale and shutdown of facilities................... -0- 1,078
------- -------
(Loss) income from operations............................. (1,267) 1,777
Royalties, management fees and other expense.............. (76) 4,190
------- -------
(Loss) income before income taxes......................... (1,343) 5,967
Income tax (benefit) expense.............................. (501) 2,019
------- -------
(Loss) income from discontinued operations................ $ (842) $ 3,948
======= =======
</TABLE>
NOTE D -- NET INCOME PER SHARE
The calculation of net income per share, basic and assuming dilution,
follows (in thousands, except per share data):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Net income per share -- basic:
Net income.................................... $12,036 $16,252 $15,557
======= ======= =======
Average number of shares outstanding.......... 4,772 4,785 4,876
======= ======= =======
Net income per share -- basic................. $ 2.52 $ 3.40 $ 3.19
======= ======= =======
Net income per share -- assuming dilution:
Net income.................................... $12,036 $16,252 $15,557
======= ======= =======
Average number of shares outstanding.......... 4,772 4,785 4,876
Dilutive effect of stock plans................ 14 31 15
------- ------- -------
Adjusted average number of shares
outstanding................................ 4,786 4,816 4,891
======= ======= =======
Net income per share -- assuming dilution..... $ 2.51 $ 3.37 $ 3.18
======= ======= =======
</TABLE>
F-10
<PAGE> 83
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE E -- INCOME TAXES
Total income taxes from continuing operations differs from the tax computed
by applying the U.S. federal corporate income tax statutory rate for the
following reasons (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Income from continuing operations before taxes.... $17,695 $25,576 $12,580
======= ======= =======
Income taxes at statutory rate.................... $ 6,193 $ 8,952 $ 4,277
Tax differences due to:
Percentage depletion............................ (943) (1,271) (1,344)
State income taxes.............................. 65 312 (991)
Officers' life insurance........................ (106) (410) (76)
Goodwill amortization........................... 254 -0- -0-
Other........................................... 196 (363) (325)
------- ------- -------
Total income taxes................................ $ 5,659 $ 7,220 $ 1,541
======= ======= =======
</TABLE>
The Company received income tax refunds of $1,049,000 and $2,479,000 during
1998 and 1996, respectively. During 1996 the Company received a $1,824,000 state
income tax refund for prior tax years, which favorably impacted 1996 state
income tax expense. The Company made income tax payments of $3,999,000,
$6,161,000, and $1,962,000 during 1998, 1997 and 1996, respectively.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation and amortization............. $47,401 $29,267
Pension benefits........................................ 10,916 8,949
Other................................................... 2,379 2,619
------- -------
Total deferred tax liabilities.................. 60,696 40,835
Deferred tax assets:
Postretirement benefits................................. 10,276 9,865
Coal Act liability...................................... 4,689 5,285
Other................................................... 12,096 7,625
------- -------
Total deferred tax assets....................... 27,061 22,775
------- -------
Net deferred tax liabilities.................... $33,635 $18,060
======= =======
</TABLE>
F-11
<PAGE> 84
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE F -- LONG-TERM DEBT
Long-term debt is as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
Senior Credit Facility................................... $171,000 -0-
Senior Subordinated Notes................................ 100,000 -0-
Title XI Ship Financing Bonds............................ 7,450 $ 8,700
Term Loans............................................... 16,754 36,250
Capital Leases........................................... 10,317 -0-
Notes Payable............................................ 6,545 1,868
Guaranteed ESOP Loans.................................... -0- 715
-------- -------
312,066 47,533
Less current portion..................................... 9,506 9,087
-------- -------
$302,560 $38,446
======== =======
</TABLE>
In the second quarter of 1998, the Company entered into a three-year
$215,000,000 revolving credit facility ("Senior Credit Facility") with a group
of banks to finance the acquisition of Global Stone, refinance debt and for
other general purposes. The variable interest rate on the Senior Credit Facility
approximated 7.75% at December 31, 1998. The agreement matures in May 2001, but
is renewable annually thereafter at the discretion of the banks. The Company
also entered into an agreement for an interim private placement of $100,000,000
ten-year senior subordinated debt ("Senior Subordinated Facility") in connection
with the Global Stone acquisition. The interim Senior Subordinated Facility was
at a fixed rate of 9.35% at December 31, 1998. The notes under the interim
Senior Subordinated Facility were exchanged with the lender on February 1, 1999
for Senior Subordinated Notes. The Senior Subordinated Notes, privately placed
with several purchasers, mature in February 2009 and have a fixed interest rate
of 10%. The Company incurred $9,397,000 in financing costs associated with the
new debt facilities. The financing costs are being amortized over the terms of
the respective agreements and are included in Other Assets on the consolidated
balance sheet at December 31, 1998.
The Title XI Ship Financing Bonds related to a first preferred ship
mortgage on the M/V Columbia Star and are guaranteed by the U.S. Government
under the Federal Ship Financing Program. To facilitate a pledge under the
Senior Credit Facility, the bonds were called, at face value, and repaid in
January 1999 with additional borrowings under the Senior Credit Facility.
In 1997, the Company entered into a $17,000,000 fixed rate Term Loan with a
bank to finance the acquisition of two Marine Transportation vessels, which had
previously been under charter agreements. The Company is required to make
semi-annual payments on the Term Loan of $750,000, including interest, through
July 14, 2002; $1,350,000 payable semi-annually, including interest, through
January 14, 2007 and a final payment of $7,805,000, including interest, on July
14, 2007. The loan is secured by mortgages on the two vessels, which have a net
book value of $16,545,000 at December 31, 1998. The Term Loan was amended in
1998 as a result of the Company's increase in debt related to the acquisition of
Global Stone. The amendment revised the Term Loan covenants to the same
covenants contained in the Senior Credit Facility. In addition, the interest
rate was changed from a fixed rate of 7.32% to a semi-variable maximum rate of
8.32% (fixed portion of rate is 7.82%).
The Company's debt agreements contain various covenants with the most
restrictive covenants requiring the Company to maintain a specified level of
earnings before interest, taxes, depreciation and amortization (EBITDA), a
specified leverage ratio and a limitation on capital distributions. The
Company's EBITDA, as defined, was $69,326,000 at December 31, 1998, compared
with a minimum specified level of $66,000,000. The Company's leverage ratio, as
defined, was 4.5 at December 31, 1998 compared with a maximum of 5.0. The
F-12
<PAGE> 85
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company's capital distributions, which include payments of dividends and
purchases of treasury stock, totaled $4,412,000 compared with a maximum of
$5,000,000.
The Company, in separate agreements which expire in 2000 and 2001, entered
into interest rate swap agreements with banks to substitute fixed rates for
LIBOR-based variable interest rates on notional amounts totaling $90,000,000 at
December 31, 1998. The Company's debt agreement with its bank group requires
interest rate protection on fifty percent of its senior secured debt for a
period of at least two years. The Company's existing fixed rate senior secured
debt fulfills a portion of the fifty-percent protection requirement. The swap
agreements limit the effect of increases in the interest rates on any floating
rate debt. The differential between fixed and floating rates is recorded as an
increase or decrease to interest expense. The effect of these agreements is to
limit the Company's interest rate exposure to 7.98% on $90,000,000 of the Senior
Credit Facility. As a result of these swap agreements, interest expense was
$55,000 greater in 1998 than if the Company had maintained its floating LIBOR
pricing. At December 31, 1998, the fair value of the Company's interest rate
swaps and long-term debt were liabilities of $903,000 and $307,625,000,
respectively.
Substantially all of the Company's U.S. accounts receivable, inventories
and property and equipment, which approximates $346,506,000, secure long-term
senior debt of $210,636,000 at December 31, 1998. Long-term debt maturities are
$9,506,000 in 1999, $5,376,000 in 2000, $181,020,000 in 2001, $513,000 in 2002,
$1,602,000 in 2003 and $114,049,000 thereafter. The Company made interest
payments of $13,593,000, $2,353,000 and $3,117,000 during 1998, 1997, 1996,
respectively.
NOTE G -- STOCKHOLDERS' EQUITY
In 1997, the Company declared a two-for-one split of its common stock in
the form of a 100% stock dividend to stockholders of record as of October 10,
1997. This stock split was recorded by a transfer, within stockholders' equity,
of $3,626,000 from additional capital to common stock for all periods presented,
representing $1.00 par value for each additional share issued.
The Company's preferred stock is issuable in series and the Board of
Directors is authorized to fix the number of shares and designate the terms of
each issue. At December 31, 1998 and 1997, 5,000,000 preferred stock shares were
authorized. No preferred stock was issued or outstanding at December 31, 1998
and 1997. In 1987, under a Stockholder Rights Plan, as amended, the Company's
Board of Directors declared a dividend consisting of one Right for each
outstanding share of the Company's common stock. Upon certain "change in
control" events, the Rights entitle the holder to purchase one one-hundredth of
a share of the Company's Series C $10.00 preferred stock for $130 or one share
of the Company's common stock for $2.50, depending on the "change in control"
circumstances. The Stockholder Rights Plan, which expires December 18, 2006,
should not interfere with any merger or other business combination approved by
the Board of Directors, because the Board, at its option, may redeem the Rights
at a redemption price of $0.05 per Right.
NOTE H -- COMPANY STOCK PLANS
The Company's Long-Term Incentive Plan ("Plan"), adopted in 1996, permits
grants of stock options, stock appreciation rights, restricted stock and other
performance awards. There were 200,000 common shares authorized for awards under
the Plan. At the end of 1998, 10,055 shares remain available for grant under the
Plan. Included in Additional Capital at December 31, 1998 and 1997 is $902,000
and $655,000, respectively, of obligations under the Plan, representing 38,113
and 31,549 "share units", respectively. Compensation expense under the Plan was
$31,000 in 1998, $568,000 in 1997 and $387,000 in 1996. Under the Plan, stock
options have been granted to key employees. These options vest ratably over a
four-year period and expire 10 years from the date of grant. There have been no
stock appreciation rights, restricted stock or performance awards granted under
the Plan.
F-13
<PAGE> 86
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In connection with an employment agreement ("Agreement") the Company
provided its Chairman, President and Chief Executive Officer ("CEO") with a
restricted common stock award, in lieu of compensation. In January 1998, upon
the CEO's completion of a $1,000,000 personal investment in the Company's common
stock, the Company issued to the CEO 25,744 shares of common stock equal to the
number of shares of common stock he acquired. Of the total shares issued, 5,148
became immediately vested and non-forfeitable. The remaining shares are
restricted at December 31, 1998 and become vested and non-forfeitable, ratably,
on January 1, 1999, 2000, 2001 and 2003, as defined by the Agreement.
The CEO is entitled to all voting rights and any dividends on the
restricted shares. Total compensation expense of $965,000, computed based on the
closing market price on the date the stock was issued, is being recognized over
the vesting period. Compensation expense related to this award was $386,000 in
1998. Also under the Agreement, the Company granted the CEO an option to acquire
380,174 common shares at an exercise price of $38.00 per share. The option
becomes exercisable in whole or in part on January 1, 2001 and expires June 30,
2005.
In 1998, the Company established a Director Fee Deferral Plan (the
"Directors Plan"), which allows non-employee directors of the Company the option
of deferring all or part of their fees in the form of "share units" or "deferred
cash". Any fees deferred as "share units" will be matched at 25% by the Company
in the form of additional "share units". Common stock (100,000 shares) is
authorized for distribution under the Directors Plan. At December 31, 1998,
$186,000 was included in additional paid-in-capital, representing 5,469 "share
units". Expense under the Directors Plan was $186,000 in 1998.
The following table summarizes the Company's stock option activity and
related information. Exercise prices for options outstanding as of December 31,
1998 ranged from $26.00 to $42.13. The weighted-average remaining contractual
life of these options is 7.3 years.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
NUMBER OF EXERCISE AVERAGE
SHARES PRICE FAIR VALUE
--------- -------- ----------
<S> <C> <C> <C>
Options outstanding, January 1, 1997.......... -0- -0-
Granted....................................... 48,700 $30.63 $7.06
-------
Options outstanding, December 31, 1997........ 48,700 30.63
Granted -- CEO................................ 380,174 38.00 11.36
Granted -- others............................. 97,200 29.51 8.52
Forfeited..................................... (8,900) 35.79
-------
Options outstanding, December 31, 1998........ 517,174 $35.75
======= ======
Options exercisable, December 31, 1998........ 10,950 $30.63
======= ======
</TABLE>
F-14
<PAGE> 87
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation",
the Company has chosen to continue accounting for stock options at their
intrinsic value. Under the alternative fair value method of this SFAS the
estimated fair value of the options is amortized to expense over the options'
vesting period. Had the fair value method of accounting been applied to the
Company's stock option plan, the impact would be as follows:
<TABLE>
<CAPTION>
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE DATA) 1998 1997
---------------------- ------- -------
<S> <C> <C>
Net income, as reported................................... $12,036 $16,252
Estimated fair value of stock option granted, net of
taxes................................................... (306) (8)
------- -------
Net income, as adjusted................................... $11,730 $16,244
======= =======
Net income per share, as adjusted-assuming dilution....... $ 2.45 $ 3.37
======= =======
</TABLE>
The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rate of 6.0%; dividend yields ranging from
2.0%-3.0%; volatility factors of the expected market price of the Company's
common shares of 31% and 22% in 1998 and 1997, respectively; and a
weighted-average expected life of five years for the options. Since changes in
the subjective input assumptions can materially affect the fair value estimate,
in management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.
NOTE I -- POSTRETIREMENT BENEFITS
The Company has a number of noncontributory defined benefit pension plans
covering certain employees. The plans provide benefits based on the
participant's years of service and compensation or state amounts for each year
of service. The Company's funding policy is to contribute amounts to the plans
sufficient to meet the minimum funding required by applicable regulations. In
addition to pension benefits, the Company provides health care and life
insurance for certain retired employees. Substantially all of the Company's
employees are eligible for these benefits when they reach normal retirement age.
The Company's policy is to fund these postretirement benefit costs principally
on a cash basis as claims are incurred. The Coal Industry Retiree Health Benefit
Act of 1992 ("Coal Act") requires companies that previously mined coal to assume
certain health care benefit obligations for retired coal miners and their
dependents.
F-15
<PAGE> 88
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A summary of the Company's pension and other benefits, as required by SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits", is as follows (in thousands)
<TABLE>
<CAPTION>
OTHER BENEFITS(2)
------------------------------------------
POSTRETIREMENT
PENSION BENEFITS(1) HEALTH CARE COAL ACT
------------------- ------------------- -------------------
1998 1997 1998 1997 1998 1997
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CHANGE IN BENEFIT OBLIGATIONS
Benefit obligations at
beginning of year........... $ 61,443 $ 54,622 $ 14,976 $ 14,723 $ 13,551 $ 13,914
Service cost.................. 1,708 1,114 528 379
Interest cost................. 4,530 4,255 1,276 1,069 909 974
Amendments.................... 78
Actuarial loss (gain)......... 1,023 6,150 1,751 (113) (1,423) (121)
Benefits paid................. (4,924) (4,698) (1,257) (1,082) (1,014) (1,216)
Acquisitions.................. 6,671 3,050
-------- -------- -------- -------- -------- --------
Benefit obligations at end of
year(3)..................... 70,529 61,443 20,324 14,976 12,023 13,551
CHANGE IN PLAN ASSETS
Fair value of plan assets at
beginning of year........... 102,934 83,340 103 75
Actual return on plan
assets...................... 6,883 23,196 3 3
Employer contributions........ 1,103 1,096 25 25
Benefits paid................. (4,924) (4,698)
Acquisitions.................. 5,410
-------- -------- -------- --------
Fair value of plan assets at
end of year................. 111,406 102,934 131 103
-------- -------- -------- --------
Funded status................. 40,877 41,491 (20,193) (14,873) (12,023) (13,551)
Unrecognized net actuarial
gain........................ (13,350) (17,885) (5,638) (7,925)
Unrecognized prior service
cost (credit)............... 1,993 2,213 (1,350) (1,543)
Unrecognized initial net
asset....................... (2,251) (2,962)
-------- -------- -------- -------- -------- --------
Net amount recognized......... $ 27,269 $ 22,857 $(27,181) $(24,341) $(12,023) $(13,551)
======== ======== ======== ======== ======== ========
AMOUNTS RECOGNIZED IN THE
BALANCE SHEET CONSIST OF:
Prepaid benefit cost........ $ 30,151 $ 24,421
Intangible asset............ 1,152 717
-------- --------
Prepaid pension costs....... 31,303 25,138
Accrued long-term benefit
liability................ (4,034) (2,281) $(27,181) $(24,341) $(12,023) $(13,551)
-------- -------- -------- -------- -------- --------
Net amount recognized......... $ 27,269 $ 22,857 $(27,181) $(24,341) $(12,023) $(13,551)
======== ======== ======== ======== ======== ========
</TABLE>
F-16
<PAGE> 89
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
PENSION BENEFITS(1)
---------------------
1998 1997
---------- ----
<S> <C> <C>
WEIGHTED-AVERAGE ASSUMPTION AS OF DECEMBER 31
Discount rate............................................... 6.50%-7.00% 7.25%
Expected return on plan assets.............................. 7.50%-9.00% 9.00%
Rate of compensation increase............................... 4.00% 4.00%
Rate of increases in pension payments....................... 2.50%
</TABLE>
<TABLE>
<CAPTION>
OTHER BENEFITS(2)
-------------------------------------------------
POSTRETIREMENT HEALTH CARE COAL ACT
--------------------------- ---------------
1998 1997 1998 1997
------------- ------- ---- ----
<S> <C> <C> <C> <C>
WEIGHTED-AVERAGE ASSUMPTION AS OF DECEMBER 31
Discount rate........................................... 6.50%-7.00% 7.25% 7.00% 7.00%
Expected return on plan assets.......................... 6.00% 6.00%
Rate of compensation increase........................... 3.00%
</TABLE>
For measurement purposes on the Company's U.S. postretirement health care a
7.75% (pre-65) and 5.25% (post-65) annual rate of increase in the per capita
cost of covered health care benefits was assumed for 1999. The rate was assumed
to decrease gradually to 5.0% for 2005 (pre-65) and 2000 (post-65) and remain at
that level thereafter. For measurement purposes on the Company's Canadian
postretirement health care, a 10.0% annual rate cost of covered health care
benefits was assumed for 1999. The rate was assumed to decrease gradually to
4.5% after five years. The Coal Act's weighted-average annual assumed rate of
increase in the health care cost trend rate for 1999 and 1998 is 6.0%.
<TABLE>
<CAPTION>
PENSION BENEFITS(1)
-----------------------------
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT COST (CREDIT)
Service cost................................................ $ 1,708 $ 1,114 $ 1,390
Interest cost............................................... 4,530 4,255 4,246
Expected return on plan assets.............................. (9,659) (7,831) (7,361)
Amortization of prior service cost.......................... 298 437 250
Amortization of initial net asset........................... (711) (711) (706)
Recognized net actuarial (gain) loss........................ (735) (37) 278
------- ------- -------
Net periodic benefit cost (credit).......................... $(4,569) $(2,773) $(1,903)
======= ======= =======
</TABLE>
F-17
<PAGE> 90
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
OTHER BENEFITS(2)
--------------------------------------------------------
POSTRETIREMENT HEALTH CARE COAL ACT
-------------------------- --------------------------
1998 1997 1996 1998 1997 1996
------ ------ ------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
COMPONENTS OF NET PERIODIC
BENEFIT COST (CREDIT)
Service cost.................. $ 528 $ 379 $ 368
Interest cost................. 1,276 1,069 1,059 $ 909 $ 974 $ 936
Expected return on plan
assets...................... (6) (5) (3)
Amortization of prior service
cost........................ (192) (192) (192)
Recognized net actuarial
(gain) loss................. (534) (404) (551) (1,361) (121) 122
------ ------ ------ ------- ----- ------
Net periodic benefit cost
(credit).................... $1,072 $ 847 $ 681 $ (452) $ 853 $1,058
====== ====== ====== ======= ===== ======
</TABLE>
Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage point change in
assumed health care cost trend rates would have the following effects (in
thousands):
<TABLE>
<CAPTION>
OTHER BENEFITS(2)
--------------------------------------------------------
POSTRETIREMENT HEALTH CARE COAL ACT
-------------------------- --------------------------
1% INCREASE 1% DECREASE 1% INCREASE 1% DECREASE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Effect on total of service and interest
cost components......................... $ 351 $ (286) $ 116 $ (94)
Effect on postretirement benefits
obligation.............................. 2,788 (2,297) 1,481 (1,197)
</TABLE>
- ---------------
(1) Reflects the combined Pension Plans of the Company
(2) Reflects the Postretirement Health Care, Life Insurance Plans of the Company
and benefits required under the 1992 Coal Act. Net periodic benefit cost for
the Coal Act declined in 1998 as a result of a decline in the number of
beneficiaries assigned to the Company.
(3) Benefit obligations at the end of 1998 include Canadian pension and
postretirement health care benefit obligations of $5,561,000 and $3,005,000,
respectively.
The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were $10,559,000, $10,514,000 and $7,098,000,
respectively, as of December 31, 1998 and $4,346,000, $3,997,000, and
$1,722,000, respectively, as of December 31, 1997.
Pension plan assets include 293,000 shares of the Company's common stock at
December 31, 1998. The ending market value and dividends received during the
year for these shares were $7,252,000 and $234,000, respectively.
The Company maintains defined contribution plans for certain employees and,
except for the Employee Stock Ownership Plan (ESOP), contributes to these plans
based on a percentage of employee contributions. The expense for these plans was
$1,533,000, $1,039,000 and $934,000 for 1998, 1997 and 1996, respectively.
The Company also pays into certain defined benefit multi-employer plans
under various union agreements that provide pension and other benefits for
various classes of employees. Payments are based upon negotiated contract rates
and related expenses totaled $1,166,000, $1,688,000 and $1,915,000 for 1998,
1997, and 1996, respectively.
F-18
<PAGE> 91
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE J -- COMMITMENTS AND CONTINGENCIES
The Company leases various buildings, computers and equipment in addition
to a vessel charter in its Marine Transportation fleet. In general, these
operating leases are renewable or contain purchase options. The purchase price
or renewal lease payment is based on the fair market value of the asset at the
date of purchase or renewal. Rental expense was $5,076,000, $3,718,000, and
$4,767,000 in 1998, 1997 and 1996, respectively.
Future minimum payments at December 31, 1998, under non-cancelable
operating leases, are $4,199,000 in 1999, $3,790,000 in 2000, $2,675,000 in
2001, $2,532,000 in 2002, $1,804,000 in 2003 and $10,123,000 thereafter.
The Company is subject to various environmental laws and regulations
imposed by federal, state and local governments. Also, in the normal course of
business, the Company is involved in various pending or threatened legal
actions. The Company cannot reasonably estimate future costs, if any, related to
these matters. However, costs incurred to comply with environmental regulations
and to settle litigation have not been significant in 1998 and prior years.
Although it is possible that the Company's future operating results could be
affected by future costs of environmental compliance or litigation, it is
management's belief that such costs will not have a material adverse effect on
the Company's consolidated financial position.
NOTE K -- INDUSTRY SEGMENTS AND MAJOR CUSTOMERS
The Company adopted SFAS No. 131, "Disclosure about Segment of an
Enterprise and Related Information". The new SFAS requires the Company to
provide information about operating segments in annual and quarterly financial
statements. It also requires certain related disclosures about products and
services, geographic areas and major customers.
The Company supplies essential natural resources to industrial and
commercial customers. Through its three operating segments -- Lime and
Limestone, Industrial Sands and Marine Transportation -- the Company serves
customers, through a direct sales force, in a wide range of industries,
including steel, construction, oil, ceramic, chemical, glass and electric
utilities. Founded in 1854, the Company is headquartered in Cleveland, Ohio.
LIME AND LIMESTONE
The lime and limestone business segment, headquartered in Roswell, Georgia,
mines and processes limestone and produces lime, a limestone derivative. This
business segment operates nine facilities, primarily in the Eastern U.S. and
Canada. Lime is used for water and waste treatment, steel making, flue gas
desulfurization, glass production, animal feed, fertilizers, and fillers for
plastic, latex, and sealants. Chemical limestone is used in many diverse
industrial and agricultural uses, including fiberglass, roofing shingles and
animal feed. Limestone is sized and graded for lawn and garden applications as
well as for aggregates in construction.
INDUSTRIAL SANDS
The Industrial Sands business segment, headquartered in Phoenix, Arizona,
mines and processes high-purity silica sands at two facilities in Ohio and six
facilities in the southwestern U.S. It produces fracturing sands used in oil
well drilling; foundry sands for hot-metal die casting; filtration sands;
recreational sands for golf courses, playgrounds, athletic fields, and
landscaping; industrial sands used as abrasives and for fillers in building
materials; and silica flour for fiberglass and ceramic production.
MARINE TRANSPORTATION
The Marine Transportation business segment, headquartered in Cleveland,
Ohio, provides dry bulk transportation between U.S. ports on the Great Lakes.
This business segment operates 12 self-unloading vessels. The fleet transports
primarily iron ore for integrated steel manufacturers, coal for electric utility
companies, and
F-19
<PAGE> 92
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
limestone for construction and other purposes. The segment also operates the
Cleveland Bulk Terminal at the Port of Cleveland.
Geographic information for revenues and long-lived assets are as follows
(in thousands):
<TABLE>
<CAPTION>
LONG-
REVENUES(1) LIVED ASSETS
----------- ------------
<S> <C> <C>
1998
United States....................................... $227,129 $361,977
Canada and other foreign............................ 11,723 28,327
-------- --------
Consolidated........................................ $238,852 $390,304
======== ========
1997
United States....................................... $144,348 $181,995
Canada and other foreign............................ 837
-------- --------
Consolidated........................................ $145,185 $181,995
======== ========
1996
United States....................................... $129,298 $169,900
Canada and other foreign............................ 399 187
-------- --------
Consolidated........................................ $129,697 $170,087
======== ========
</TABLE>
- ---------------
(1) Revenues are attributed to countries based on the location of customers.
Accounts receivable of $15,694,000 at December 31, 1998 are due from
companies in the steel and utilities industries. Credit is extended based on an
evaluation of a customer's financial condition, and generally collateral is not
required. Credit losses within these industries have not been significant for
the three years in the period ended December 31, 1998. There were no customers
that exceeded 10% of consolidated net sales and operating revenues in 1998. In
prior years, Marine Transportation's operating revenues from two major steel
producers and one utility company exceeded 10% of consolidated net sales and
operating revenues and are summarized as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Customer:
A........................... $18,773 $14,008
B........................... 18,589 15,787
C........................... 18,245 17,315
------- -------
$55,607 $47,110
======= =======
</TABLE>
F-20
<PAGE> 93
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
LIME AND INDUSTRIAL MARINE TOTAL CORPORATE
LIMESTONE(3) SANDS TRANSPORTATION SEGMENTS AND OTHER CONSOLIDATED
------------ ---------- -------------- -------- --------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
1998
Identifiable assets........... $226,552 $52,248 $137,969 $416,769 $ 148,855(1) $565,624
Depreciation, depletion and
amortization expense........ 10,581 3,914 6,252 20,747 128 20,875
Capital expenditures.......... 8,322 6,069 4,703 19,094 25 19,119
Net sales and operating
revenues.................... $ 95,498 $47,800 $ 95,554 $238,852 $238,852
Income from operations........ $ 11,851 $ 9,465 $ 24,335 $ 45,651 $ (8,616)(2) $ 37,035
Gain (loss) on disposition of
assets...................... 76 213 289 (164) 125
Interest expense.............. (19,281) (19,281)
Interest, dividends and other
income (expense) -- net..... (184) (184)
-------- ------- -------- -------- --------- --------
Income from continuing
operations before income
taxes....................... $ 11,927 $ 9,678 $ 24,335 $ 45,940 $ (28,245) $ 17,695
======== ======= ======== ======== ========= ========
1997
Identifiable assets........... $40,928 $143,554 $184,482 $ 78,742(1) $263,224
Depreciation, depletion and
amortization expense........ 3,150 5,654 8,804 143 8,947
Capital expenditures.......... 4,108 20,234 24,342 212 24,554
Net sales and operating
revenues.................... $49,484 $ 95,701 $145,185 $145,185
Income from operations........ $11,205 $ 20,547 $ 31,752 $ (7,287)(2) $ 24,465
Gain on disposition of
assets...................... 197 197 5,351 5,548
Interest expense.............. (2,834) (2,834)
Interest, dividends and other
income (expense) -- net..... (1,603) (1,603)
------- -------- -------- --------- --------
Income from continuing
operations before income
taxes....................... $11,402 $ 20,547 $ 31,949 $ (6,373) $ 25,576
======= ======== ======== ========= ========
1996
Identifiable assets........... $36,120 $130,125 $166,245 $ 68,451(1) $234,696
Depreciation, depletion and
amortization expense........ 2,444 8,671 11,115 144 11,259
Capital expenditures.......... 4,540 925 5,465 108 5,573
Net sales and operating
revenues.................... $42,583 $ 86,178 $128,761 $ 936 $129,697
Income from operations........ $ 9,747 $ 9,087 $ 18,834 $ (7,181)(2) $ 11,653
Gain on disposition of
assets...................... 75 75 3,075 3,150
Interest expense.............. (3,004) (3,004)
Interest, dividends and other
income (expense) -- net..... 781 781
------- -------- -------- --------- --------
Income from continuing
operations before income
taxes....................... $ 9,822 $ 9,087 $ 18,909 $ (6,329) $ 12,580
======= ======== ======== ========= ========
</TABLE>
F-21
<PAGE> 94
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
- ---------------
(1) Consists primarily of cash and cash equivalents, marketable securities,
prepaid pension costs, goodwill, other assets and net assets of discontinued
operations of $15,571,000 and $13,661,000 in 1997 and 1996, respectively.
(2) Includes other operations, net of corporate general and administrative
expenses.
(3) Includes the results of operations of Global Stone, Port Inland and Filler
Products as of their respective dates of April, May and August 1998.
NOTE L -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Unaudited quarterly results of operations for the years ended December 31,
1998 and 1997 are summarized as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------
DEC. 31 SEPT. 30 JUNE 30 MAR. 31
------- -------- ------- -------
<S> <C> <C> <C> <C>
1998
Net sales and operating revenues................... $74,974 $ 85,845 $63,726 $14,307
Gross profit....................................... 16,234 22,763 16,773 4,248
Net income......................................... 1,127 5,680 5,449 (220)
Per common share:
Net income (loss) -- basic....................... 0.24 1.19 1.14 (0.05)
Net income (loss) -- assuming dilution........... 0.24 1.19 1.13 (0.05)
1997
Net sales and operating revenues................... $43,222 $ 45,602 $43,576 $12,785
Gross profit....................................... 9,165 13,571 10,839 4,242
Income from continuing operations.................. 5,989 6,431 5,184 752
Net income......................................... 3,814 6,476 5,109 853
Per common share -- basic:
Continuing operations............................ 1.26 1.35 1.09 0.16
Net income....................................... 0.80 1.36 1.07 0.18
Per common share -- assuming dilution:
Continuing operations............................ 1.25 1.34 1.08 0.16
Net income....................................... 0.80 1.35 1.06 0.18
</TABLE>
The sum of per share amounts for the four quarters of 1997 do not equal the
annual per share amounts as a result of treasury stock purchases and the effect
of stock options granted by the Company.
Net income for the fourth quarter of 1998 includes $967,000 ($0.20 per
share, assuming dilution) as a result of a decline in the number of
beneficiaries assigned to the Company under the Coal Act. Fourth quarter 1998
net income includes a $773,000 ($0.16 per share, assuming dilution) charge
primarily related to separation benefits that will be paid over a two year
period to former Global Stone management.
Net income for the fourth quarter of 1997 includes $3,388,000 ($0.70 per
share, assuming dilution) related to the sale of certain coal reserves. Fourth
quarter 1997 net income includes a $1,052,700 ($0.22 per share, assuming
dilution) charge related to supplemental retirement benefits for its former
Chairman, President and Chief Executive Officer.
F-22
<PAGE> 95
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE M -- GUARANTOR AND NON GUARANTOR SUBSIDIARIES INFORMATION
The Company's domestic subsidiaries, all of which are directly or
indirectly wholly owned, are the only guarantors of the Senior Subordinated
Notes. The guarantees are full, unconditional and joint and several. Separate
financial statements of these guarantor subsidiaries are not presented as
management has determined that they would not be material to investors.
Certain of the Company's subsidiaries are not guarantors of the Senior
Subordinated Notes. These subsidiaries were principally acquired through the
Global Stone acquisition on May 22, 1998. Summarized consolidating financial
information for the Company and the guarantor subsidiaries and the non-guarantor
subsidiaries is presented below. The amounts presented for the non-guarantor
subsidiaries are based on the preliminary purchase price allocations using
estimated fair values at the dates of acquisition. The purchase price
allocations will be finalized during 1999 as the asset and liability valuations
are completed. The income statement and cash flow information for the
non-guarantor subsidiaries is presented for the period May 22 through December
31, 1998 (in thousands):
BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------
PARENT
COMPANY AND
COMBINED
GUARANTOR NON-GUARANTOR TOTAL
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS COMPANY
------------ ------------- ------------ -------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents............ $ 1,522 $ 418 $ 1,940
Accounts receivable, net............. 34,238 2,386 36,624
Income taxes receivable.............. 2,780 680 3,460
Inventories.......................... 27,725 725 28,450
Deferred income taxes................ 1,563 948 2,511
Prepaid insurance and other
expenses.......................... 4,865 205 5,070
Due from affiliates.................. 24,207 $(24,207) --
--------- ------- -------- ---------
Total Current Assets................... 96,900 5,362 (24,207) 78,055
Property, Plant and Equipment, net..... 320,210 27,232 347,442
Goodwill, net.......................... 89,262 89,262
Prepaid Pension Costs.................. 31,303 31,303
Other Assets........................... 19,561 19,561
Investment in Subsidiaries............. 8,612 10,094 (18,706) --
--------- ------- -------- ---------
Total Assets........................... $ 565,848 $42,688 $(42,913) $ 565,623
========= ======= ======== =========
Current Liabilities:
Current portion of long-term debt.... $ 8,248 $ 1,258 $ 9,506
Accounts payable..................... 8,768 1,564 10,332
Payrolls and other accrued
compensation...................... 10,074 372 10,446
Accrued expenses..................... 14,909 14,909
Accrued interest expense............. 5,482 5,482
Income taxes payable................. 69 69
Due to affiliates.................... -- 24,207 $(24,207) --
--------- ------- -------- ---------
Total Current Liabilities.............. 47,550 27,401 (24,207) 50,744
Long-Term Debt, less current portion... 299,448 3,112 302,560
Postretirement Benefits Obligation..... 23,618 3,563 27,181
Other Long-Term Liabilities............ 22,059 22,059
Deferred Income Taxes.................. 36,146 36,146
Stockholders' Equity................... 137,027 8,612 (18,706) 126,933
--------- ------- -------- ---------
Total Liabilities and Stockholders'
Equity............................... $ 565,848 $42,688 $(42,913) $ 565,623
========= ======= ======== =========
</TABLE>
F-23
<PAGE> 96
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INCOME STATEMENT DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
-----------------------------------------------------------
PARENT
COMPANY AND
COMBINED
GUARANTOR NON-GUARANTOR TOTAL
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS COMPANY
------------ ------------- ------------ -------
<S> <C> <C> <C> <C>
Net Sales and Operating Revenues....... $ 229,858 $8,994 $ 238,852
Costs and Expenses
Cost of goods sold and operating
expenses.......................... 151,819 6,140 157,959
Depreciation, depletion and
amortization...................... 19,869 1,006 20,875
General, administrative and selling
expenses.......................... 22,610 541 $ (168) 22,983
--------- ------ ------- ---------
Income from operations................. 35,560 1,307 168 37,035
Interest expense..................... (19,195) (1,405) 1,320 (19,280)
Other income (expense), net.......... 1,428 (1,488) (60)
--------- ------ ------- ---------
Income From Continuing Operations
Before
Income Taxes......................... 17,793 (98) -- 17,695
Income Taxes........................... 5,703 (44) 5,659
--------- ------ ------- ---------
Income From Continuing Operations...... $ 12,090 $ (54) $ -- $ 12,036
========= ====== ======= =========
</TABLE>
CASH FLOW DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
----------------------------------------------------------
PARENT
COMPANY AND
COMBINED
GUARANTOR NON-GUARANTOR TOTAL
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS COMPANY
------------ ------------- ------------ -------
<S> <C> <C> <C> <C>
Net Cash Provided by Operating
Activities............................ $ 27,181 $2,084 $(3,116) $ 26,149
Investing Activities:
Capital expenditures.................. (17,179) (1,940) (19,119)
Acquisition of businesses............. (239,639) (239,639)
All other investing activities........ 9,956 9,956
-------- ------ ------- --------
Net Cash Used for Investing
Activities............................ (246,862) (1,940) -- (248,802)
Financing Activities:
Payments on long-term debt............ (94,407) (222) (94,629)
Additional long-term debt............. 302,650 302,650
All other financing activities........ (13,810) (13,810)
-------- ------ ------- --------
Net Cash Provided (Used For) Financing
Activities............................ 194,433 (222) -- 194,211
Effect of exchange rate changes on
cash.................................. -- 496 496
-------- ------ ------- --------
Decrease in cash and cash equivalents... (25,248) 418 (3,116) (27,946)
Cash and cash equivalents, January 1,
1998.................................. 29,886 -- 29,886
-------- ------ ------- --------
Cash and Cash Equivalents, December 31,
1998.................................. $ 4,638 $ 418 $(3,116) $ 1,940
======== ====== ======= ========
</TABLE>
F-24
<PAGE> 97
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of some of the provisions of the
Certificate of Incorporation of Oglebay Norton Company and the Delaware General
Corporation Law (the "DGCL"). This description is intended as a summary only and
is qualified in its entirety by reference to the Certificate of Incorporation
and the DGCL.
The DGCL provides that a corporation may limit or eliminate a director's
personal liability for monetary damages to the corporation or its stockholders,
except for liability:
(1) for any breach of the director's duty of loyalty to the
corporation or its stockholders,
(2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(3) for paying a dividend or approving a stock repurchase in violation
of Section 174 of the DGCL, or
(4) for any transaction from which the director derived an improper
personal benefit.
Under the DGCL, directors and officers as well as other employees and
individuals may be indemnified against expenses, including attorney's fees,
judgments, fines, and amounts paid in settlement in connection with specified
actions, suits, or proceedings, whether civil, criminal, administrative, or
investigative, other than an action by or in the right of the corporation as a
derivative action, if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful.
Article Seventh of the Certificate of Incorporation of Oglebay Norton
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 served 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 Oglebay Norton shall pay, to the fullest extent then required
by law, expenses, including attorney's fees, incurred by a person in defending
any of these types of actions, suits or proceedings as they are incurred, in
advance of the disposition of these types of actions, suits or proceedings, upon
receipt of any undertaking then required by law. Article Seventh provides
further that Oglebay Norton 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
as an 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 of these capacities, or arising out
of his or her status, whether or not Oglebay Norton would have the power to
indemnify him or her against this liability under Article Seventh of the
Certificate of Incorporation or Delaware law.
Oglebay Norton maintains insurance coverage for the benefit of its
directors and officers with respect to may 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
Certificate of Incorporation.
II-1
<PAGE> 98
ITEM 21. EXHIBITS.
Under Item 601 of Regulation S-K, 17 C.F.R. sec. 229.601(b)(4)(iii)(A),
Oglebay Norton has excluded from Exhibit No. 4 instruments defining the rights
of holders of long-term debt with respect to debt that does not exceed 10% of
the total assets of Oglebay Norton. Oglebay Norton agrees to furnish copies of
these instruments to the Commission upon request.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated March 3, 1999, by and
among Oglebay Norton Company, Oglebay Norton's predecessor,
ONCO Investment Company and Oglebay Norton Merger Company
(incorporated by reference to Exhibit 2 of Oglebay Norton's
Form 8-K filed March 26, 1999).
4.1 Form of Rights Agreement, including first and second
amendments (incorporated by reference to Exhibit 4(b) of the
Annual Report of Oglebay Norton's predecessor on Form 10-K
for the year ended December 31, 1993).
4.2 Form of Third Amendment to Rights Agreement, dated as of
August 31, 1994, between Oglebay Norton's predecessor and
the Rights Agent (incorporated by reference to Exhibit 4(c)
of Amendment No. 3 to Form 8-A/A of Oglebay Norton's
predecessor, filed on September 26, 1994).
4.3 Form of Fourth Amendment of Rights Agreement, dated as of
January 21, 1997, between Oglebay Norton's predecessor and
the Rights Agent (incorporated by reference to Exhibit 4(d)
of Form 8-A/A of Oglebay Norton's predecessor, filed on
January 21, 1997).
4.4 Form of Fifth Amendment of Rights Agreement, dated as of
October 28, 1998, between Oglebay Norton's predecessor and
the Rights Agent (incorporated by reference to Exhibit 4(e)
of Form 8-A/A of Oglebay Norton's predecessor, filed
November 20, 1998).
4.5 Senior Subordinated Increasing Rate Notes Note Purchase
Agreement dated as of May 15, 1998, among Oglebay Norton's
predecessor, the guarantors, and CIBC Oppenheimer Corp., as
Purchaser (incorporated by reference to Exhibit 10.3 of the
quarterly report of Oglebay Norton's predecessor filed on
form 10-Q for the quarter ended June 30, 1998).
4.6 Indenture, dated as of February 1, 1999, among Oglebay
Norton's predecessor, the guarantors and Norwest Bank
Minnesota, National Association (incorporated by reference
to Exhibit 10(w)(1) of Oglebay Norton's Annual Report on
Form 10-K for the year ended December 31, 1998).
4.7 Registration Rights Agreement, dated as of February 1, 1999,
among Oglebay Norton's predecessor, the guarantors and CIBC
Oppenheimer Corp. (incorporated by reference to Exhibit
10(w)(2) of Oglebay Norton's Annual Report on Form 10-K for
the year ended December 31, 1998).
*4.8 Supplemental Indenture, dated March 5, 1999, between Oglebay
Norton and Norwest Bank Minnesota, National Association.
4.9 Supplemental Indenture, dated March 5, 1999, between Oglebay
Norton's predecessor and Norwest Bank Minnesota, National
Association (incorporated by reference to Exhibit 10(w)(3)
of Oglebay Norton's Annual Report on Form 10-K for the year
ended December 31, 1998).
*4.10 Supplemental Indenture, dated April 12, 1999, among ONCO
Investment Company, Oglebay Norton Marine Services Company,
L.L.C., Global Stone James River, Inc. and Norwest Bank
Minnesota, National Association.
4.11 Form of Note issued under the Indenture, dated as of
February 1, 1999 (included in Exhibit 4.6).
4.12 Form of Note issued under the Senior Subordinated Increasing
Rate Notes Note Purchase Agreement, dated as of May 15, 1998
(included in Exhibit 4.5).
*5.1 Opinion of Jones, Day, Reavis & Pogue regarding validity of
the exchange notes.
*12 Statement regarding computation of earning to fixed charges.
*23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1).
</TABLE>
II-2
<PAGE> 99
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
*23.2 Consent of Ernst & Young LLP.
*24 Powers of Attorney.
*25 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1.
*99.1 Letter of Transmittal.
*99.2 Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* filed herewith
ITEM 22. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(x) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(y) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement, or the most recent
post-effective amendment of the registration statement, which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered, if
the total dollar value of securities offered would not exceed that which
was registered, any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission in accordance with Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(z) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to the information in the registration statement;
provided, however, that paragraphs (a)(x) and (a)(y) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant in accordance with Sections 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each of these post-effective amendments shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of the securities.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(2) The undersigned registrant undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report in accordance with 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 in accordance with 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 the securities
at that time shall be deemed to be the initial bona fide offering of the
securities.
(3) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant in accordance with the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission the indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that
II-3
<PAGE> 100
a claim for indemnification against these liabilities, other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding,
is asserted by that 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 the indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of the issue.
(4) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus in accordance
with Items 4, 10(b), 11 or 13 of this form, within one business day of receipt
of the request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(5) The undersigned registrant hereby undertakes 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-4
<PAGE> 101
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON COMPANY
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
Corporate
Development and General Counsel
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* President, Chief Executive Officer and Director
- --------------------------------------------------- (Principal Executive Officer)
John N. Lauer
* Vice President and Chief Financial Officer
- --------------------------------------------------- (Principal Financial Officer)
David H. Kelsey
* Vice President -- Finance and Treasurer
- --------------------------------------------------- (Principal Accounting Officer)
Michael F. Biehl
* Director
- ---------------------------------------------------
David D. Baird
* Director
- ---------------------------------------------------
Malvin E. Bank
* Director
- ---------------------------------------------------
William G. Bares
* Director
- ---------------------------------------------------
James T. Bartlett
* Director
- ---------------------------------------------------
Albert C. Bersticker
* Director
- ---------------------------------------------------
R. Thomas Green, Jr.
* Director
- ---------------------------------------------------
Ralph D. Ketchum
</TABLE>
II-5
<PAGE> 102
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Director
- ---------------------------------------------------
William G. Pryor
* Director
- ---------------------------------------------------
John D. Weil
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-6
<PAGE> 103
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
ON MARINE SERVICES COMPANY
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-7
<PAGE> 104
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
ONCO INVESTMENT COMPANY
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* President and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-8
<PAGE> 105
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON ENGINEERED MATERIALS,
INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* President and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-9
<PAGE> 106
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON INDUSTRIAL MINERALS,
INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* President and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-10
<PAGE> 107
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON INDUSTRIAL SANDS, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-11
<PAGE> 108
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON TERMINALS, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-12
<PAGE> 109
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
OGLEBAY NORTON MARINE SERVICES
COMPANY, L.L.C.
By: ON MARINE SERVICES COMPANY, as
sole member
By: /s/ JEFFREY S. GRAY
-------------------------------
Jeffrey S. Gray,
Vice President of sole member
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director of ON Marine Services
- --------------------------------------------------- Company, the sole member of Oglebay Norton
John N. Lauer Marine Services Company, L.L.C. (Principal
Executive Officer)
* Vice President and Director of ON Marine Services
- --------------------------------------------------- Company, the sole member of Oglebay Norton
David H. Kelsey Marine Services Company, L.L.C. (Principal
Financial and Accounting Officer)
/s/ JEFFREY S. GRAY Vice President and Director of ON Marine Services
---------------------------------------------- Company, the sole member of Oglebay Norton
Jeffrey S. Gray Marine Services Company, L.L.C.
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-13
<PAGE> 110
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
COLORADO SILICA SAND, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-14
<PAGE> 111
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE CORPORATION
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-15
<PAGE> 112
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE CHEMSTONE CORPORATION
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-16
<PAGE> 113
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE DETROIT LIME COMPANY
By: /s/ JEFFREY S. GRAY
--------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-17
<PAGE> 114
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE FILLER PRODUCTS, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-18
<PAGE> 115
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE PENROC INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-19
<PAGE> 116
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE JAMES RIVER, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
- ---------------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-20
<PAGE> 117
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE PORT INLAND, INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-21
<PAGE> 118
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE ST. CLAIR INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-22
<PAGE> 119
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE TENN LUTTRELL COMPANY
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-23
<PAGE> 120
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
GLOBAL STONE (U.S.A.) INC.
By: /s/ JEFFREY S. GRAY
------------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director (Principal Executive
- --------------------------------------------------- Officer)
John N. Lauer
* Vice President and Director (Principal Financial
- --------------------------------------------------- and Accounting Officer)
David H. Kelsey
/s/ JEFFREY S. GRAY Vice President and Director
----------------------------------------------
Jeffrey S. Gray
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-24
<PAGE> 121
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this resignation statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio
on April 14, 1999.
TEXAS MINING, LP
By: OGLEBAY NORTON INDUSTRIAL SANDS,
INC.,
as General Partner
By: /s/ JEFFREY S. GRAY
----------------------------------
Jeffrey S. Gray, Vice President
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 April 14, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
* Chairman and Director of Oglebay Norton
- --------------------------------------------------- Industrial Sands, Inc., the general partner of
John N. Lauer Texas Mining, LP (Principal Executive Officer)
* Vice President and Director of Oglebay Norton
- --------------------------------------------------- Industrial Sands, Inc., the general partner of
David H. Kelsey Texas Mining, LP (Principal Financial and
Accounting Officer)
/s/ JEFFREY S. GRAY Vice President and Director of Oglebay Norton
---------------------------------------------- Industrial Sands, Inc., the general partner of
Jeffrey S. Gray Texas Mining, LP
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the company and which have been filed
with the Securities and exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
By: /s/ JEFFREY S. GRAY April 14, 1999
- --------------------------------------------------
Jeffrey S. Gray, Attorney-in-Fact
for the Officers and Directors
signing in the capacities indicated
</TABLE>
II-25
<PAGE> 122
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
*4.8 Supplemental Indenture, dated March 5, 1999, between Oglebay
Norton and Norwest Bank Minnesota, National Association.
*4.10 Supplemental Indenture, dated April 12, 1999, among ONCO
Investment Company, Oglebay Norton Marine Services Company,
L.L.C., Global Stone James River, Inc. and Norwest Bank
Minnesota, National Association.
*5.1 Opinion of Jones, Day, Reavis & Pogue regarding validity of
the exchange notes.
*12 Statement regarding computation of earnings to fixed
charges.
*23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1).
*23.2 Consent of Ernst & Young LLP.
*24 Powers of Attorney.
*25 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1.
*99.1 Letter of Transmittal.
*99.2 Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* filed herewith
<PAGE> 1
Exhibit 4.8
-----------
SUPPLEMENTAL INDENTURE
----------------------
Reference is made to that certain Indenture, dated as of February 1,
1999, by and among Oglebay Norton Company, a Delaware corporation ("Original
ONC"), the guarantors party thereto and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee (the "Indenture"). Capitalized terms used without
definition herein have the meanings given to them in the Indenture.
RECITALS:
---------
A. Pursuant to an Agreement and Plan of Merger, dated as of March 3,
1999, by and among Original ONC, Oglebay Norton Holding Company, a Delaware
corporation ("Holding Company"), ONCO Investment Company, a Delaware
corporation, and Oglebay Norton Merger Company, a Delaware corporation ("Merger
Company"), Merger Company will merge (the "Merger") with and into Original ONC,
with Original ONC as the surviving corporation;
B. Immediately after the Merger, Original ONC will become an indirect
subsidiary of Holding Company and change its name to "ON Marine Services
Company," and Holding Company will change its name to Oglebay Norton Company
("New ONC");
C. The Indenture permits the Merger only if New ONC enters into this
Supplemental Indenture and assumes all of the obligations of Original ONC as the
"Company" thereunder;
NOW, THEREFORE, in consideration of the above premises, New ONC agrees,
for the benefit of the Holders, as follows:
Effective with the Merger, New ONC hereby expressly and fully and
unconditionally assumes each and every obligation, covenant, agreement and
undertaking of Original ONC under the Financing Documents as if New ONC has been
originally party thereto as the "Company." Upon effectiveness of such assumption
and the execution and delivery to the Trustee by Original ONC of a Supplemental
Indenture to become a Guarantor under the Financing Documents, Original ONC
shall cease to be the "Company" under the Financing Documents.
The laws of the State of New York shall govern this Supplemental
Indenture without giving effect to any conflicts of law principles thereof.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed, all as of March 5, 1999.
OGLEBAY NORTON HOLDING COMPANY,
a Delaware corporation, to be renamed
OGLEBAY NORTON COMPANY
By: /s/ John N. Laver
-------------------------------------
Name: John N. Laver
Title: President and CEO
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Curtis D. Schwegman
-------------------------------------
Name: Curtis D. Schwegman
Title: Assistant Vice President
<PAGE> 1
Exhibit 4.10
------------
SUPPLEMENTAL INDENTURE
Reference is made to that certain Indenture, dated as of February 1,
1999, by and among Oglebay Norton Company (formerly known as Oglebay Norton
Holding Company), a Delaware corporation ("Oglebay"), the guarantors party
thereto and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee (the
"Indenture"). Capitalized terms used without definition herein have the meanings
given to them in the Indenture.
RECITALS:
A. Oglebay recently formed three wholly owned subsidiaries: (i) ONCO
Investment Company, a Delaware corporation ("Investment Company"), (ii) Oglebay
Norton Marine Services Company, L.L.C., a Delaware limited liability company
("Oglebay, L.L.C."), and (iii) Global Stone James River, Inc. ("James River");
B. The Indenture requires Investment Company, Oglebay, L.L.C. and James
River to become Guarantors under the Indenture, unless they are designated as
unrestricted subsidiaries;
NOW, THEREFORE, in consideration of the above premises, Investment
Company, Oglebay, L.L.C. and James River agree, for the benefit of the Holders,
as follows:
Effective as of the date below, Investment Company, Oglebay, L.L.C. and
James River hereby expressly and fully and unconditionally agree to become
Guarantors under the Financing Documents.
The laws of the State of New York shall govern this Supplemental
Indenture without giving effect to any conflicts of law principles thereof.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed, all as of April 12, 1999.
ONCO INVESTMENT COMPANY
By: /s/ Jeffrey S. Gray
---------------------------------------
Name: Jeffrey S. Gray
Title: Vice President
OGLEBAY NORTON MARINE SERVICES, L.L.C.
By: ON MARINE SERVICES COMPANY, as sole
member
By: /s/ Jeffrey S. Gray
------------------------------
Name: Jeffrey S. Gray
Title: Vice President
GLOBAL STONE JAMES RIVER, INC.
By: /s/ Jeffrey S. Gray
---------------------------------------
Name: Jeffrey S. Gray
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Curtis D. Schwegman
---------------------------------------
Name: Curtis D. Schwegman
Title: Assistant Vice President
<PAGE> 1
FORM OF OPINION Exhibit 5.1
-----------
JONES, DAY, REAVIS & POGUE
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
_____________, 1999
Oglebay Norton Company
1100 Superior Avenue, 21st Floor
Cleveland, OH 44114-2598
Re: 10% Senior Subordinated Notes due 2009
--------------------------------------
Ladies and Gentlemen:
We are acting as counsel for Oglebay Norton Company, a
Delaware corporation (the "Company"), in connection with the proposed issuance
of up to $100,000,000 aggregate principal amount of the Company's 10% Senior
Subordinated Notes due 2009 (the "Exchange Notes"), and the guarantees of the
Exchange Notes (the "Subsidiary Guarantees" and, together with the Exchange
Notes, the "Securities") by certain subsidiaries (the "Subsidiary Guarantors")
of the Company, in exchange for its 10% Senior Subordinated Notes due 2009, and
the guarantees of such notes by the Subsidiary Guarantors (the "Original
Securities"). Reference is made to (i) the Company's Registration Statement on
Form S-4 (the "Registration Statement") with respect to the Securities, to be
filed with the Securities and Exchange Commission under the Securities Act of
1933 (the "Securities Act"), (ii) the Indenture, dated as of February 1, 1999
(the "Indenture"), among the Company, the Subsidiary Guarantors and Norwest Bank
Minnesota, National Association, as Trustee (the "Trustee"), pursuant to which
the Securities will be issued in exchange for the Original Securities, and (iii)
the Registration Rights Agreement, dated as of February 1, 1999, among the
Company, the Subsidiary Guarantors and CIBC Oppenheimer Corp. (the "Registration
Rights Agreement").
In rendering this opinion, we have assumed that the signatures
on all documents examined by us are genuine. We have examined such documents,
records and matters of law as we have deemed necessary for purposes of this
opinion, and based thereupon, but subject to the limitations set forth below, we
are of the opinion that:
1. The Exchange Notes have been duly authorized and, when duly
executed by authorized officers of the Company, authenticated by the
Trustee, and issued in accordance with the Indenture and the
Registration Rights Agreement, will be binding obligations of the
Company, entitled to the benefits of the Indenture, except to the
extent enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights
<PAGE> 2
generally and general equitable principles (whether considered in a
proceeding in equity or at law).
2. Subject to the exceptions set forth in the next paragraph
hereof, the Subsidiary Guarantees have been duly authorized and, when
duly executed and delivered by authorized officers of the Subsidiary
Guarantors, authenticated by the Trustee, and issued in accordance with
the Indenture and the Registration Rights Agreement, the Subsidiary
Guarantees will be binding obligations of the Subsidiary Guarantors,
entitled to the benefits of the Indenture, except to the extent
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
The opinions expressed herein are expressly limited to the
federal laws of the United States of America, the laws of the State of New York,
the General Corporation Law of California, the Ohio General Corporation Law and
the General Corporation Law of the State of Delaware, as currently in effect,
and we express no opinion as to the effect of, or the enforceability under, the
laws of any other jurisdiction. With respect to the opinions expressed in
paragraph 2 hereof concerning Colorado Silica Sand, Inc. and Global Stone Port
Inland, Inc., we have assumed that the Subsidiary Guarantees have been duly
authorized by such entities.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement and to the reference to us under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act.
Very truly yours,
<PAGE> 1
<TABLE>
<CAPTION>
Exhibit 12
Year ended December 31,
------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(in thousands)
<S> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $12,540 $13,256 $12,580 $25,576 $17,695
Add:
Interest expense (including
amortization of finance charges) 5,797 4,147 3,004 2,834 19,280
------- ------- ------- ------- -------
Earnings as adjusted $18,337 $17,403 $15,584 $28,410 $36,975
======= ======= ======= ======= =======
Fixed charges:
Interest expense (including
amortization of finance charges) $ 5,797 $ 4,147 $ 3,004 $ 2,834 $19,280
======= ======= ======= ======= =======
Ratio of earnings to fixed charges 3.2x 4.2x 5.2x 10.0x 1.9x
</TABLE>
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 16, 1999, in the Registration Statement (Form
S-4) and related Prospectus of Oglebay Norton Company for the registration of
$100,000,000 10% Senior Subordinated Notes due 2009.
/s/ Ernst & Young LLP
Cleveland, Ohio
April 8, 1999
<PAGE> 1
Exhibit 24
----------
DIRECTORS AND OFFICERS
OF OGLEBAY NORTON COMPANY
AND ITS SUBSIDIARIES
REGISTRATION STATEMENT ON FORM S-4
POWER OF ATTORNEY
Each of the undersigned officers and directors of Oglebay Norton
Company, a Delaware corporation (the "Corporation"), and its subsidiaries,
hereby constitutes and appoints John N. Lauer, David H. Kelsey and Jeffrey S.
Gray and each of them, with full power of substitution and resubstitution, as
attorneys-in-fact or attorney-in-fact of the undersigned, for him and in his
name, place and stead, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Securities Act") one or more
Registration Statement(s) on Form S-4 relating to the registration of the
offering for exchange of the 10% Senior Subordinated Notes due 2009, Series B,
of the Corporation, with any and all amendments, supplements and exhibits
thereto, including pre-effective and post-effective amendments or supplements or
any additional registration statement filed pursuant to Rule 462 promulgated
under the Securities Act, with full power and authority to do and perform any
and all acts and things whatsoever that any of said attorneys or their
substitutes may deem necessary or desirable, in his or their sole discretion,
with any such act or thing being hereby ratified and approved in all respects
without any further act or deed whatsoever.
EXECUTED as of April 12, 1999.
/s/ Brent D. Baird /s/ R. Thomas Green, Jr.
- ---------------------------- ------------------------------
Brent D. Baird R. Thomas Green, Jr.
/s/ Malvin E. Bank /s/ David H. Kelsey
- ---------------------------- ------------------------------
Malvin E. Bank David H. Kelsey
/s/ William G. Bares /s/ Ralph D. Ketchum
- ---------------------------- ------------------------------
William G. Bares Ralph D. Ketchum
/s/ James T. Bartlett /s/ John N. Lauer
- ---------------------------- ------------------------------
James T. Bartlett John N. Lauer
/s/ Albert C. Bersticker /s/ William G. Pryor
- ---------------------------- ------------------------------
Albert C. Bersticker William G. Pryor
/s/ Michael F. Biehl /s/ John D. Weil
- ---------------------------- ------------------------------
Michael F. Biehl John D. Weil
/s/ Jeffrey S. Gray
- ----------------------------
Jeffrey S. Gray
<PAGE> 1
Exhibit 25
----------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------------------------
__ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b) (2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A U.S. NATIONAL BANKING ASSOCIATION 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
SIXTH STREET AND MARQUETTE AVENUE
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
Stanley S. Stroup, General Counsel
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(612) 667-1234
(Agent for Service)
----------------------------
OGLEBAY NORTON COMPANY
(Exact name of obligor as specified in its charter)
DELAWARE 34-1888342
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2598
(Address of principal executive offices) (Zip code)
----------------------------
10% SENIOR SUBORDINATED NOTES DUE 2009
(Title of the indenture securities)
<PAGE> 2
Item 1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.
Item 15. FOREIGN TRUSTEE. Not applicable.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of
this Statement of Eligibility. Norwest Bank
incorporates by reference into this Form T-1
the exhibits attached hereto.
Exhibit 1. a. A copy of the Articles of Association of the
trustee now in effect.*
Exhibit 2. a. A copy of the certificate of authority of
the trustee to commence business issued June
28,1872, by the Comptroller of the Currency
to The Northwestern National Bank of
Minneapolis. *
b. A copy of the certificate of the Comptroller
of the Currency dated January 2, 1934,
approving the consolidation of The
Northwestern National Bank of Minneapolis
and The Minnesota Loan and Trust Company of
Minneapolis, with the surviving entity being
titled Northwestern National Bank and Trust
Company of Minneapolis.*
c. A copy of the certificate of the Acting
Comptroller of the Currency dated January
12, 1943, as to change of corporate title of
Northwestern National Bank and Trust Company
of Minneapolis to Northwestern National Bank
of Minneapolis.*
d. A copy of the letter dated May 12, 1983 from
the Regional Counsel, Comptroller of the
Currency, acknowledging receipt of notice of
name change effective May 1, 1983 from
Northwestern National Bank of Minneapolis to
Norwest Bank Minneapolis, National
<PAGE> 3
Association. *
e. A copy of the letter dated January 4, 1988
from the Administrator of National Banks for
the Comptroller of the Currency certifying
approval of consolidation and merger
effective January 1,1988 of Norwest Bank
Minneapolis, National Association with
various other banks under the title of
"Norwest Bank Minnesota, National
Association."*
Exhibit 3. A copy of the authorization of the trustee to
exercise corporate trust powers issued January 2,
1934, by the Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now in effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section
321(b) of the Act.
Exhibit 7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority. * *
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
* Incorporated by reference to exhibit number 25 filed with registration
statement number 33-66026.
** Incorporated by reference to exhibit number 25 filed with registration
statement number 333-25233.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 12th day of April 1999.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Jane Y. Schweiger
-----------------------------
Jane Y. Schweiger
Corporate Trust Officer
<PAGE> 5
EXHIBIT 6
April 12,1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Jane Y. Schweiger
---------------------------
Jane Y. Schweiger
Corporate Trust Officer
<PAGE> 1
EXHIBIT 99.1
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., CENTRAL TIME,
ON , 1999 UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
10% SENIOR SUBORDINATED NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
10% SENIOR SUBORDINATED NOTES DUE 2009
OF
OGLEBAY NORTON COMPANY
Deliver to:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Hand Delivery or Overnight Courier: In Person:
Norwest Bank Minnesota, Norwest Bank Minnesota, Norwest Bank Minnesota,
National Association National Association National Association
Corporate Trust Operations Corporate Trust Operations Northstar East Bldg.
P.O. Box 1517 Norwest Center 608 2nd Ave. S.
Minneapolis, MN 55480-1517 Sixth and Marquette 12th Floor
Minneapolis, MN 55479-0113 Corporate Trust Services
Minneapolis, MN 55479-0113
</TABLE>
By Facsimile:
(612) 667-4927
Confirm By Telephone
(612) 667-9764
Your delivery of this letter of transmittal will not be valid unless you
deliver it to one of the addresses, or transmit it to the facsimile number, set
forth above. Please carefully read this entire document, including the
instructions, before completing this letter of transmittal. DO NOT DELIVER THIS
LETTER OF TRANSMITTAL TO OGLEBAY NORTON.
By completing this letter of transmittal, you acknowledge that you have
received and reviewed Oglebay Norton's prospectus dated ,
1999 and this letter of transmittal, which together constitute the "Exchange
Offer." This letter of transmittal and the prospectus have been delivered to you
in connection with Oglebay Norton's offer to exchange its 10% Senior
Subordinated Notes due 2009, which have been registered under the Securities Act
(the "Exchange Notes") for its outstanding 10% Senior Subordinated Notes due
2009 (the "Outstanding Notes"). $100,000,000 in principal amount of the
Outstanding Notes are currently issued and outstanding.
This letter of transmittal is to be completed by Holder (this term is
defined below) of Outstanding Notes if:
(1) the Holder is delivering certificates for Outstanding Notes with
this document, or
(2) the tender of certificates for Outstanding Notes will be made by
book-entry transfer to the account maintained by Norwest Bank Minnesota,
National Association, the exchange agent for these notes, at the Depository
Trust Company ("DTC") according to the procedures described in the
prospectus under the heading "VI.F. The Exchange Offer -- Procedures for
Tendering." Please note that delivery of documents required by this letter
of transmittal to DTC does not constitute delivery to the exchange agent.
<PAGE> 2
You must tender your Outstanding Notes according to the guaranteed delivery
procedures described in this document if:
(1) your Outstanding Notes are not immediately available;
(2) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before on or
before the Expiration Date; or
(3) you are unable to obtain confirmation of a book-entry tender of
your Outstanding Notes into the exchange agent's account at DTC on or
before the Expiration Date.
More complete information about guaranteed delivery procedures is contained
in the prospectus under the heading "VI.H. The Exchange Offer -- Guaranteed
Delivery Procedures." You should also read Instruction 1 to determine whether or
not this section applies to you.
As used in this letter of transmittal, the term "Holder" means (1) any
person in whose name Outstanding Notes are registered on the books of Oglebay
Norton, (2) any other person who has obtained a properly executed bond power
from the registered Holder or (3) any person whose Outstanding Notes are held of
record by DTC who desires to deliver such notes by book-entry transfer at DTC.
You should use this letter of transmittal to indicate whether or not you would
like to participate in the Exchange Offer. If you decide to tender your
Outstanding Notes, you must complete this entire letter of transmittal.
YOU MUST FOLLOW THE INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL -- PLEASE
READ THIS ENTIRE DOCUMENT CAREFULLY. IF YOU HAVE QUESTIONS OR NEED HELP, OR IF
YOU WOULD LIKE ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL, YOU SHOULD CONTACT THE EXCHANGE AGENT AT (612) 667-9764 OR AT ITS
ADDRESS SET FORTH ABOVE.
Please describe your Outstanding Notes below.
<TABLE>
<C> <C> <S> <C>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OUTSTANDING NOTES
- -----------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL
NAME(S) AND ADDRESS(ES) AMOUNT OF
OF REGISTERED HOLDER(S) OUTSTANDING NOTES PRINCIPAL AMOUNT
(PLEASE COMPLETE, IF REPRESENTED BY OF OUTSTANDING
BLANK) CERTIFICATE NUMBER(S) CERTIFICATE(S) NOTES TENDERED*
- -----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* You will be deemed to have tendered the entire principal amount of Outstanding
Notes represented in the column labeled "Aggregate Principal Amount of
Outstanding Notes Represented by Certificate(s)" unless you indicate otherwise
in the column labeled "Principal Amount of Outstanding Notes Tendered."
If you need more space, list the certificate numbers and principal amount
of Outstanding Notes on a separate schedule, sign the schedule and attach it to
this letter of transmittal.
[ ] CHECK HERE IF YOU HAVE ENCLOSED OUTSTANDING NOTES WITH THIS LETTER OF
TRANSMITTAL.
[ ] CHECK HERE IF YOU WILL BE TENDERING OUTSTANDING NOTES BY BOOK-ENTRY TRANSFER
MADE TO THE EXCHANGE AGENT'S ACCOUNT AT DTC
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION (THIS TERM
IS DEFINED BELOW):
2
<PAGE> 3
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF YOU ARE DELIVERING TENDERED OUTSTANDING NOTES THROUGH A NOTICE
OF GUARANTEED DELIVERY AND HAVE ENCLOSED THAT NOTICE WITH THIS LETTER OF
TRANSMITTAL
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION:
Name(s) of Registered Holder(s) of Outstanding Notes:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Window Ticket Number (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Account Number (if delivered by book-entry transfer):
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if: (1) certificates for untendered Outstanding
Notes are to be issued in the name of someone other than you; (2) certificates
for Exchange Notes issued in exchange for tendered and accepted Outstanding
Notes are to be issued in the name of someone other than you; or (3) Outstanding
Notes tendered by book-entry transfer that are not exchanged are to be returned
by credit to an account maintained at DTC.
Issue Certificate(s) to:
Name
- ------------------------------------------------------
(PLEASE PRINT)
Address
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(PLEASE ALSO COMPLETE SUBSTITUTE FORM W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if certificates for untendered Outstanding Notes,
or Exchange Notes issued in exchange for tendered and accepted Outstanding Notes
are to be sent to someone other than you, or to you at an address other than the
address shown above.
Mail and deliver Certificate(s) to:
Name
- ------------------------------------------------------
(PLEASE PRINT)
Address
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------------
3
<PAGE> 4
Ladies and Gentlemen:
According to the terms and conditions of the Exchange Offer, I hereby
tender to Oglebay Norton the principal amount of Outstanding Notes indicated
above. At the time these notes are accepted by Oglebay Norton, and exchanged for
the same principal amount of Exchange Notes, I will sell, assign, and transfer
to Oglebay Norton all right, title and interest in and to the Outstanding Notes
I have tendered. I am aware that the exchange agent also acts as the agent of
Oglebay Norton. By executing this document, I irrevocably appoint the exchange
agent as my agent and attorney-in-fact for the tendered Outstanding Notes with
full power of substitution to:
1. deliver certificates for the Outstanding Notes, or transfer
ownership of the Outstanding Notes on the account books maintained by DTC,
to Oglebay Norton and deliver all accompanying evidences of transfer and
authenticity to Oglebay Norton, and
2. present the Outstanding Notes for transfer on the books of Oglebay
Norton, receive all benefits and exercise all rights of beneficial
ownership of these Outstanding Notes, according to the terms of the
Exchange Offer. The power of attorney granted in this paragraph is
irrevocable and coupled with an interest.
I represent and warrant that I have full power and authority to tender,
sell, assign, and transfer the Outstanding Notes that I am tendering. I
represent and warrant that Oglebay Norton will acquire good and unencumbered
title to the Outstanding Notes, free and clear of all liens, restrictions,
charges and encumbrances and that the Outstanding Notes will not be subject to
any adverse claim at the time Oglebay Norton acquires them. I further represent
that:
1. any Exchange Notes I will acquire in exchange for the Outstanding
Notes I have tendered will be acquired in the ordinary course of business;
2. I have not engaged in, do not intend to engage in, and have no
arrangement with any person to engage in, a distribution of any Exchange
Notes issued to me; and
3. I am not an "affiliate" (as defined in Rule 405 under the
Securities Act) of Oglebay Norton.
I understand that the Exchange Offer is being made in reliance on
interpretations contained in letters issued to third parties by the staff of the
Securities and Exchange Commission ("Commission"). These letters provide that
the Exchange Notes issued in exchange for the Outstanding Notes in the Exchange
Offer may be offered for resale, resold, and otherwise transferred by a Holder
of Exchange Notes, unless that person is an "affiliate" of Oglebay Norton within
the meaning of Rule 405 under the Securities Act, without compliance with the
registration and prospectus delivery provisions of the Securities Act. The
Exchange Notes must be acquired in the ordinary course of the Holder's business
and the Holder must not be engaging in, must not intend to engage in, and must
not have any arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes.
If I am a broker-dealer that will receive Exchange Notes for my own account
in exchange for Outstanding Notes that were acquired as a result of
market-making activities or other trading activities (a "Participating
Broker-Dealer"), I acknowledge that I will deliver a prospectus in connection
with any resale of the Exchange Notes. However, by this acknowledgment and by
delivering a prospectus, I will not be deemed to admit that I am an
"underwriter" within the meaning of the Securities Act. If I am a Participating
Broker-Dealer, I will, on a weekly basis during the 90-day period following the
Expiration Date, or any longer period required if use of the prospectus has been
suspended by Oglebay Norton, contact Oglebay Norton's Investor Relations
Department at (216) 861-3300 to confirm the availability of the prospectus for
delivery in connection with resales.
Upon request, I will execute and deliver any additional documents deemed by
the exchange agent or Oglebay Norton to be necessary or desirable to complete
the assignment, transfer, and purchase of the Outstanding Notes I have tendered.
4
<PAGE> 5
I understand that Oglebay Norton will be deemed to have accepted validly
tendered Outstanding Notes when Oglebay Norton gives oral or written notice of
acceptance to the exchange agent.
If, for any reason, any tendered Outstanding Notes are not accepted for
exchange in the Exchange Offer, certificates for those unaccepted Outstanding
Notes will be returned to me without charge at the address shown below or at a
different address if one is listed under "Special Delivery Instructions." Any
unaccepted Outstanding Notes which had been tendered by book-entry transfer will
be credited to an account at DTC, as soon as reasonably possible after the
Expiration Date.
All authority granted or agreed to be granted by this letter of transmittal
will survive my death, incapacity or, if I am a corporation or institution, my
dissolution and every obligation under this letter of transmittal is binding
upon my heirs, personal representatives, successors, and assigns.
I understand that tenders of Outstanding Notes according to the procedures
described in the prospectus under the heading "VI.F. The Exchange
Offer -- Procedures for Tendering" and in the instructions included in this
document constitute a binding agreement between myself and Oglebay Norton
subject to the terms and conditions of the Exchange Offer.
Unless I have described other instructions in this letter of transmittal
under the section "Special Issuance Instructions," please issue the certificates
representing Exchange Notes issued and accepted in exchange for my tendered and
accepted Outstanding Notes in my name, and issue any replacement certificates
for Outstanding Notes not tendered or not exchanged in my name. Similarly,
unless I have instructed otherwise under the section "Special Delivery
Instructions," please send the certificates representing the Exchange Notes
issued in exchange for tendered and accepted Outstanding Notes and any
certificates for Outstanding Notes that were not tendered or not exchanged, as
well as any accompanying documents, to me at the address shown below my
signature. If both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange Notes issued in exchange for my tendered and accepted Outstanding Notes
in the name(s) of, and return any Outstanding Notes that were not tendered or
exchanged and send such certificates to, the person(s) so indicated. I
understand that if Oglebay Norton does not accept any of the tendered
Outstanding Notes for exchange, Oglebay Norton has no obligation to transfer any
Outstanding Notes from the name of the registered Holder(s) according to my
instructions in the "Special Payment Instructions" and "Special Delivery
Instructions" sections of this document.
5
<PAGE> 6
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
(Date)
- ------------------------------------------------ ------------------------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
Area Code and Telephone Number(s):
- --------------------------------------------------------------------------------------------------
Tax Identification or Social Security Number(s):
- --------------------------------------------------------------------------------------------------
</TABLE>
The above lines must be signed by the registered Holder(s) of Outstanding
Notes as their name(s) appear(s) on the certificate for the Outstanding Notes or
by person(s) authorized to become registered Holders(s) by a properly completed
bond power from the registered Holder(s). A copy of the completed bond power
must be delivered with this letter of transmittal. If any Outstanding Notes
tendered through this letter of transmittal are held of record by two or more
joint Holders, then all such Holders must sign this letter of transmittal. If
the signature is by trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (1) state his or her full
title below and (2) unless waived by Oglebay Norton, submit evidence
satisfactory to Oglebay Norton of such person's authority to act on behalf of
the Holder. See Instruction 4 for more information about completing this letter
of transmittal.
<TABLE>
<S> <C>
Name(s):
------------------------------------------------------------
------------------------------------------------------------
(Please Print)
Capacity:
------------------------------------------------------------
Address:
------------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution, if
required by Instruction 4:
------------------------------------------------------------
(Authorized Signature)
------------------------------------------------------------
(Title)
------------------------------------------------------------
(Name of Firm)
</TABLE>
Dated
- ------------------------ , 1999
7
<PAGE> 7
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW.
PAYOR'S NAME: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT ----------------------------
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION NUMBER
----------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PART 3 --
PERJURY, I CERTIFY THAT: AWAITING TIN [ ]
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TIN
(OR I AM WAITING FOR A NUMBER TO BE ISSUED TO ME)
AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR (B) I
HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE ("IRS") THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR (C) THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING.
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN THE BOX ABOVE IF YOU
PAYER'S REQUEST FOR HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
TAXPAYER IDENTIFICATION BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
NUMBER ("TIN")
CERTIFICATION SIGNATURE __________ DATE __________ , 1998
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: IF YOU DO NOT COMPLETE AND RETURN THIS FORM YOU MAY BE SUBJECT TO BACKUP
WITHHOLDING OF 31% OF PAYMENTS MADE TO YOU UNDER THIS EXCHANGE OFFER. FOR
MORE INFORMATION, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND
EITHER (A) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (B) I INTEND TO MAIL OR
DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION
NUMBER WITHIN SIXTY (60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I
PROVIDE A NUMBER.
</TABLE>
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------- ------------------------------
Signature Date
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 8
INSTRUCTIONS
PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES. The
tendered Outstanding Notes or a confirmation of book-entry delivery, as well as
a properly completed and executed copy or facsimile of this letter of
transmittal and any other required documents must be received by the exchange
agent at its address listed on the cover of this document before 5:00 p.m.,
central time, on the Expiration Date. YOU ARE RESPONSIBLE FOR THE DELIVERY OF
THE OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL REQUIRED DOCUMENTS TO
THE EXCHANGE AGENT. EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED BELOW, THE
DELIVERY OF THESE DOCUMENTS WILL BE CONSIDERED TO HAVE BEEN MADE ONLY WHEN
ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. WHILE THE METHOD OF
DELIVERY IS AT YOUR RISK AND CHOICE, OGLEBAY NORTON RECOMMENDS THAT YOU USE AN
OVERNIGHT OR HAND DELIVERY SERVICE RATHER THAN REGULAR MAIL. YOU SHOULD SEND
YOUR DOCUMENTS WELL BEFORE THE EXPIRATION DATE TO ENSURE RECEIPT BY THE EXCHANGE
AGENT. YOU MAY REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR NOMINEE DELIVER YOUR OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT. DO NOT SEND YOUR OUTSTANDING NOTES TO
OGLEBAY NORTON.
If you wish to tender your Outstanding Notes, but:
(a) your Outstanding Notes are not immediately available;
(b) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before the
Expiration Date; or
(c) you are unable to complete the book-entry tender procedure before
the Expiration Date,
you must tender your Outstanding Notes according to the guaranteed delivery
procedure. A summary of this procedure follows, but you should read the section
in the prospectus titled "VI.H. The Exchange Offer -- Guaranteed Delivery
Procedures" for more complete information. As used in this letter of
transmittal, an "Eligible Institution" is any participant in a Recognized
Signature Guarantee Medallion Program within the meaning of Rule 17Ad-15 of the
Exchange Act.
For a tender made through the guaranteed delivery procedure to be valid,
the exchange agent must receive a properly completed and executed Notice of
Guaranteed Delivery or a facsimile of that notice before 5:00 p.m., Central
Standard time, on the Expiration Date. The Notice of Guaranteed Delivery must be
delivered by an Eligible Institution and must:
(a) state your name and address;
(b) list the certificate numbers and principal amounts of the
Outstanding Notes being tendered;
(c) state that tender of your Outstanding Notes is being made through
the Notice of Guaranteed Delivery; and
(d) guarantee that this letter of transmittal, or a facsimile of it,
the certificates representing the Outstanding Notes, or a confirmation of
DTC book-entry transfer, and all other required documents will be deposited
with the exchange agent by the Eligible Institution within three New York
Stock Exchange trading days after the Expiration Date.
The exchange agent must receive your Outstanding Notes certificates, or a
confirmation of DTC book entry, in proper form for transfer, this letter of
transmittal and all required documents within three New York Stock Exchange
trading days after the Expiration Date or your tender will be invalid and may
not be accepted for exchange.
Oglebay Norton has the sole right to decide any questions about the
validity, form, eligibility, time of receipt, acceptance or withdrawal of
tendered Outstanding Notes, and its decision will be final and binding. Oglebay
Norton's interpretation of the terms and conditions of the Exchange Offer,
including the instructions
9
<PAGE> 9
contained in this letter of transmittal and in the prospectus under the heading
"VI.E. The Exchange Offer -- Conditions," will be final and binding on all
parties.
Oglebay Norton has the absolute right to reject any or all of the tendered
Outstanding Notes if
(1) the Outstanding Notes are not properly tendered or
(2) in the opinion of counsel, the acceptance of those Outstanding
Notes would be unlawful.
Oglebay Norton may also decide to waive any conditions, defects, or
invalidity of tender of Outstanding Notes and accept such Outstanding Notes for
exchange. Any defect or invalidity in the tender of Outstanding Notes that is
not waived by Oglebay Norton must be cured within the period of time set by
Oglebay Norton.
It is your responsibility to identify and cure any defect or invalidity in
the tender of your Outstanding Notes. Your Outstanding Notes will not be
considered to have been made until any defect is cured or waived. Neither
Oglebay Norton, the exchange agent nor any other person is required to notify
you that your tender was invalid or defective, and no one will be liable for any
failure to notify you of such a defect or invalidity in your tender of
Outstanding Notes. As soon as reasonably possible after the Expiration Date, the
exchange agent will return to the Holder tendering any Outstanding Notes that
were invalidly tendered if the defect of invalidity has not been cured or
waived.
2. TENDER BY HOLDER. You must be a Holder of Outstanding Notes in order to
participate in the Exchange Offer. If you are a beneficial holder of Outstanding
Notes who wishes to tender, but is not the registered Holder, you must arrange
with the registered Holder to execute and deliver this letter of transmittal on
his, her or its behalf. Before completing and executing this letter of
transmittal and delivering the registered Holder's Outstanding Notes, you must
either make appropriate arrangements to register ownership of the Outstanding
Notes in your name, or obtain a properly executed bond power from the registered
Holder. The transfer of registered ownership of Outstanding Notes may take a
long period of time.
3. PARTIAL TENDERS. If you are tendering less than the entire principal
amount of Outstanding Notes represented by a certificate, you should fill in the
principal amount you are tendering in the third column of the box entitled
"Description of Outstanding Notes." The entire principal amount of Outstanding
Notes listed on the certificate delivered to the exchange agent will be deemed
to have been tendered unless you fill in the appropriate box. If the entire
principal amount of all Outstanding Notes is not tendered, a certificate will be
issued for the principal amount of those untendered Outstanding Notes not
tendered.
Unless a different address is provided in the appropriate box on this
letter of transmittal, certificate(s) representing Exchange Notes issued in
exchange for any tendered and accepted Outstanding Notes will be sent to the
registered Holder at his or her registered address, promptly after the
Outstanding Notes are accepted for exchange. In the case of Outstanding Notes
tendered by book-entry transfer, any untendered Outstanding Notes and any
Exchange Notes issued in exchange for tendered and accepted Outstanding Notes
will be credited to accounts at DTC.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
- If you are the registered Holder of the Outstanding Notes tendered with
this document, and are signing this letter of transmittal, your signature
must match exactly with the name(s) written on the face of the
Outstanding Notes. There can be no alteration, enlargement, or change in
your signature in any manner. If certificates representing the Exchange
Notes, or certificates issued to replace any Outstanding Notes you have
not tendered are to be issued to you as the registered Holder, do not
endorse any tendered Outstanding Notes, and do not provide a separate
bond power.
- If you are not the registered Holder, or if Exchange Note or any
replacement Outstanding Note certificates will be issued to someone other
than you, you must either properly endorse the Outstanding Notes you have
tendered or deliver with this letter of transmittal a properly completed
separate bond power. Please note that the signatures on any endorsement
or bond power must be guaranteed by an Eligible Institution.
10
<PAGE> 10
- If you are signing this letter of transmittal but are not the registered
Holder(s) of any Outstanding Notes listed on this document under the
"Description of Outstanding Notes," the Outstanding Notes tendered must
be endorsed or accompanied by appropriate bond powers, in each case
signed in the name of the registered Holder(s) exactly as it appears on
the Outstanding Notes. Please note that the signatures on any endorsement
or bond power must be guaranteed by an Eligible Institution.
- If this letter of transmittal, any Outstanding Notes tendered or any bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a
fiduciary or representative capacity, that person must indicate their
title or capacity when signing. Unless waived by Oglebay Norton, evidence
satisfactory to Oglebay Norton of that person's authority to act must be
submitted with this letter of transmittal. Please note that the
signatures on any endorsement or bond power must be guaranteed by an
Eligible Institution.
- All signatures on this letter of transmittal must be guaranteed by an
Eligible Institution unless one of the following situations apply:
- If this letter of transmittal is signed by the registered Holder(s) of
the Outstanding Notes tendered with this letter of transmittal and such
Holder(s) has not completed the box titled "Special Payment
Instructions" or the box titled "Special Delivery Instructions;" or
- If the Outstanding Notes are tendered for the account of an Eligible
Institution.
5. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If different from the name
and address of the person signing this letter of transmittal, you should
indicate, in the applicable box or boxes, the name and address where Outstanding
Notes issued in replacement for any untendered or tendered but unaccepted
Outstanding Notes should be issued or sent. If replacement Original Notes are to
be issued in a different name, you must indicate the taxpayer identification or
social security number of the person named.
6. TRANSFER TAXES. Oglebay Norton will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Notes in the Exchange Offer. However,
transfer taxes will be payable by you (or by the tendering Holder if you are
signing this letter on behalf of a tendering Holder) if:
- certificates representing Exchange Notes or notes issued to replace any
Outstanding Notes not tendered or accepted for exchange are to be
delivered to, or are to be registered or issued in the name of, a person
other than the registered Holder;
- tendered Outstanding Notes are registered in the name of any person other
than the person signing this letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of
Outstanding Notes according to the Exchange Offer. If satisfactory
evidence of the payment of those taxes or an exemption from payment is
not submitted with this letter of transmittal, the amount of those
transfer taxes will be billed directly to the tendering Holder. Until
those transfer taxes are paid, Oglebay Norton will not be required to
deliver any Exchange Notes required to be delivered to, or at the
direction of, such tendering Holder.
Except as provided in this Instruction 6, it is not necessary for transfer
tax stamps to be attached to the Outstanding Notes listed in this letter of
transmittal.
7. FORM W-9. You must provide the exchange agent with a correct Taxpayer
Identification Number ("TIN") for the Holder on the enclosed Form W-9. If the
Holder is an individual, the TIN is his or her social security number. If you do
not provide the required information on the Form W-9, you may be subject to 31%
Federal income tax withholding on certain payments made to the Holders of
Exchange Notes. Certain Holders, such as corporations and certain foreign
individuals, are not subject to these backup withholding and reporting
requirements. For additional information, please read the enclosed Guidelines
for Certification of TIN on Substitute Form W-9. To prove to the exchange agent
that a foreign individual qualifies as an exempt Holder, the foreign individual
must submit a Form W-8, signed under penalties of perjury, certifying as to that
individual's exempt status. You can obtain a Form W-8 from the exchange agent.
11
<PAGE> 11
8. WAIVER OF CONDITIONS. Oglebay Norton may choose, at any time and for
any reason, to amend, waive or modify certain of the conditions to the Exchange
Offer. The conditions applicable to tenders of Outstanding Notes in the Exchange
Offer are described in the prospectus under the heading "VI.E. The Exchange
Offer -- Conditions."
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. If your
Outstanding Notes have been mutilated, lost, stolen or destroyed, you should
contact the exchange agent at the address listed on the cover page of this
document for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. If you have questions,
need assistance, or would like to receive additional copies of the prospectus or
this letter of transmittal, you should contact the exchange agent at the address
listed in the prospectus. You may also contact your broker, dealer, commercial
bank, trust company, or other nominee for assistance concerning the Exchange
Offer.
12
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER.-- Social Security Numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
<C> <S> <C>
- ----------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------
<C> <S> <C>
1. An individual's account. The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
5. Sole proprietorship account The owner(3)
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
- ----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership The partnership
10. Association, club or other The organization
tax-exempt organization
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local government,
school district, or prison)
that receives agricultural
program payments
- ----------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
13
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a), an individual
retirement plan, or a custodial account under Section 403(b)(7), if the
account satisfies the requirements of Section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities required to be registered in the
United States, the District of Columbia, or a possession of the United
States.
- A real estate investment trust.
- A futures commissions merchant registered with the Commodity Futures Trading
Commission.
- A common trust fund operated by a bank under Section 584(a).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
- A person registered under the Investment Advisors Act of 1940 who regularly
acts as a broker.
Payments of dividends not generally subject to backup withholding include the
following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments described in Section 404(k) made by an employee stock ownership
plan.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct Taxpayer Identification Number to the payer.
- Payments of tax-exempt interest (including tax-exempt interest dividends
under Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give Taxpayer Identification Numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a Taxpayer Identification Number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your Taxpayer Identification Number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE IRS.
14
<PAGE> 14
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<S> <C> <C>
CERTIFICATE OUTSTANDING NOTES OUTSTANDING NOTES
SURRENDERED TENDERED ACCEPTED
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Delivery Prepared by:
---------------------------------------------------------------------------------
Checked by:
-------------------------------------------------------------------------------------------
Date:
-------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
10% SENIOR SUBORDINATED NOTES DUE 2009
OF
OGLEBAY NORTON COMPANY
As set forth in the Prospectus dated , 1999 (the
"Prospectus"), of Oglebay Norton Company and in the letter of transmittal, this
form or one substantially similar must be used to accept Oglebay Norton's offer
to exchange all of its outstanding 10% Senior Subordinated Notes due 2009 (the
"Outstanding Notes") for its 10% Senior Subordinated Notes due 2009, which have
been registered under the Securities Act of 1933, if certificates for the
Outstanding Notes are not immediately available or if the Outstanding Notes, the
letter of transmittal or any other required documents cannot be delivered to the
exchange agent, or the procedure for book-entry transfer cannot be completed,
prior to 5:00 p.m., Central Standard time, on the Expiration Date (as defined in
the Prospectus). This form may be delivered by an Eligible Institution by hand
or transmitted by facsimile transmission, overnight courier or mail to the
exchange agent as indicated below.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., CENTRAL TIME, ON ,
1999, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
OUTSTANDING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE
EXPIRATION DATE.
Deliver to:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Hand Delivery or Overnight Courier: In Person:
Norwest Bank Minnesota, Norwest Bank Minnesota, Norwest Bank Minnesota,
National Association National Association National Association
Corporate Trust Operations Corporate Trust Operations Northstar East Bldg.
P.O. Box 1517 Norwest Center 608 2nd Ave. S.
Minneapolis, MN 55480-1517 Sixth and Marquette 12th Floor
Minneapolis, MN 55479-0113 Corporate Trust Services
Minneapolis, MN 55479-0113
</TABLE>
By Facsimile:
(612) 667-4927
Confirm By Telephone
(612) 667-9764
Delivery of this notice to an address, or transmission of instructions via
a facsimile, other than as set forth above, does not constitute a valid
delivery.
This form is not to be used to guarantee signatures. If a signature on the
letter of transmittal to be used to tender Outstanding Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the letter
of transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Oglebay Norton Company, a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the letter of transmittal (which together constitute
the "Exchange Offer"), receipt of which is hereby acknowledged, Outstanding
Notes pursuant to guaranteed delivery procedures set forth in Instruction 1 of
the letter of transmittal.
The undersigned understands that tenders of Outstanding Notes will be
accepted only in principal amounts equal to $1,000 or integral multiples
thereof. The undersigned understands that tenders of Outstanding Notes pursuant
to the Exchange Offer may be withdrawn only in accordance with the procedures
set forth in "VI.I. The Exchange Offer -- Withdrawal of Tenders" section of the
Prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and other
legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<S> <C>
Certificate No(s). for Outstanding Notes Principal Amount of Outstanding Notes
(if available)
- ----------------------------------------------------- -----------------------------------------------------
Principal Amount of Outstanding Notes Tendered Signature(s)
- ----------------------------------------------------- -----------------------------------------------------
Dated: If Outstanding Notes will be delivered by book-entry
transfer at the Depository Trust Company, Depository
Account No.:
- ----------------------------------------------------- -----------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as its (their) name(s) appear on
certificates of Outstanding Notes or on a security position listing as the owner
of Outstanding Notes, or by person(s) authorized to become registered holder(s)
by endorsements and documents transmitted with this Notice of Guaranteed
Delivery. If signature is by a trustee, executor, administrator, guardian,
2
<PAGE> 3
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
Please print name(s) and address(es)
<TABLE>
<S> <C>
Name(s): ------------------------------------------------------------
------------------------------------------------------------
Capacity: ------------------------------------------------------------
------------------------------------------------------------
Address(es): ------------------------------------------------------------
------------------------------------------------------------
Area Code and Telephone No.: ------------------------------------------------------------
------------------------------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934 (the "Exchange Act"), hereby
(a) represents that the above named person(s) "own(s)" the Outstanding
Notes to be tendered within the meaning of Rule 14e-4 under the
Exchange Act,
(b) represents that such tender of Outstanding Notes complies with Rule
14e-4 under the Exchange Act and
(c) guarantees that delivery to the exchange agent of certificates for the
Outstanding Notes to be tendered, proper form for transfer (or
confirmation of the book-entry transfer of such Outstanding Notes into
the exchange agent's account at the Depository Trust company, pursuant
to the procedures for book-entry transfer set forth in the prospectus),
with delivery of a properly completed and duly executed (or manually
signed facsimile) letter of transmittal with any required signatures
and any other required documents, will be received by the exchange
agent at one of its addresses set forth above within five business days
after the Expiration Date.
I HEREBY ACKNOWLEDGE THAT I MUST DELIVER THE LETTER OF TRANSMITTAL AND
OUTSTANDING NOTES TO BE TENDERED TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD
SET FORTH AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO ME.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- -------------------------------------------- --------------------------------------------
Address Title
- -------------------------------------------- Name:
Zip Code --------------------------------------------
(Please Type or Print)
Area Code and Telephone No. Dated:
- -------------------------------------------- --------------------------------------------
</TABLE>
NOTE: DO NOT SEND OUTSTANDING NOTES WITH THIS FORM; OUTSTANDING NOTES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE
EXCHANGE AGENT WITHIN THREE NEW YORK STOCK EXCHANGE TRADING DAYS AFTER THE
EXPIRATION DATE.
4
