EXHIBIT 10.1
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is entered into on this _____ day of
________________, 2000, by and between OGLEBAY NORTON COMPANY, a Delaware
corporation (the "Company"), and [NAME] ("Employee").
W I T N E S S E T H:
WHEREAS, Employee is an executive and key employee who has been
employed by Oglebay Norton Management Company (the "Subsidiary") and serves the
Company as its [________________________________];
WHEREAS, the Company desires to assure itself of continuity of
management in the event of any threatened or actual Change in Control (as
hereafter defined);
WHEREAS, the Company desires to assure itself, in the event of any
threatened or actual Change in Control, of the continued performance of services
by Employee on an objective and impartial basis and without distraction by
concern for [his][her] employment status and security;
WHEREAS, Employee is willing to continue in the employ of the Company
but desires assurance that [his][her] responsibilities and status as an
executive of the Company or Subsidiary will not be adversely affected by any
threatened or actual Change in Control;
NOW, THEREFORE, the Company and Employee agree as follows:
1. Operation of Agreement. This Agreement shall be effective and
----------------------
binding immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement shall not be operative unless and until
there has been a Change in Control while Employee is in the employ of the
Company. For purposes of this Agreement, a Change in Control shall have
occurred if at any time any of the following events occurs:
(a) a report is filed with the Securities and Exchange Commission
(the "SEC") on Schedule 13D or Schedule 14D-1 (or any successor schedule,
form, or report), each as promulgated pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act"), disclosing that any "person" (as the term
"person" is used in Section 13(d) or Section 14(d)(2) of the Exchange Act)
is or has become a beneficial owner, directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;
(b) the Company files a report or proxy statement with the SEC
pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K
thereunder or Item 5(f) of Schedule 14A thereunder that a Change in Control
of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction;
(c) the Company is merged or consolidated with another corporation
and, as a result thereof, securities representing less than 50% of the
combined voting power of the surviving or resulting corporation's
securities (or of the securities of a parent corporation in case of a
merger in which the surviving or resulting corporation becomes a wholly-
owned subsidiary of the parent corporation) are owned in the aggregate by
holders of the Company's securities immediately prior to such merger or
consolidation;
(d) all or substantially all of the assets of the Company are sold in
a single transaction or a series of related transactions to a single
purchaser or a group of affiliated purchasers; or
(e) during any period of 24 consecutive months, individuals who were
Directors of the Company at the beginning of such period cease to
constitute at least a majority of the Company's Board of Directors (the
"Board") unless the election, or nomination for election by the Company's
shareholders, of more than one half of any new Directors of the Company was
approved by a vote of at least two-thirds of the Directors of the Company
then still in office who were Directors of the Company at the beginning of
such 24 month period.
The first date on which a Change in Control occurs is referred to herein as the
"Change in Control Date." Upon the occurrence of a Change in Control while
Employee is in the employ of the Subsidiary, this Agreement shall become
immediately operative subject, however, to the provisions of Paragraph 2, below.
2. Possible "Undoing" of a Change in Control. If a report is filed
-----------------------------------------
with the SEC disclosing that a person (the "Acquiror") is or has become a
beneficial owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
outstanding securities and, as a result of that filing, a Change in Control, as
defined in Paragraph 1(a), above, occurs, while Employee is in the employ of the
Company, then, as provided in Paragraph 1, above, this Agreement will become
immediately operative. However, if:
(a) a Change in Control as described in Paragraph 1(a) occurs while
Employee is in the employ of the Subsidiary;
(b) the Acquiror subsequently transfers or otherwise disposes of
sufficient securities of the Company in one or more transactions, to a
person or persons other than affiliates of the Acquiror or any persons with
whom the Acquiror has agreed to act together for the purpose of acquiring,
holding, voting or disposing of securities of the Company, so that, after
such transfer or other disposition, the Acquiror is no longer the
beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's then
outstanding securities;
2
(c) at the time of the subsequent transfer or disposition that
reduced the Acquiror's holdings to less than 10% as provided in (b),
immediately above, no other event constituting a Change in Control had
occurred; and
(d) at the time of the subsequent transfer or other disposition
that reduced the Acquiror's holdings to less than 10%, Employee's
employment with the Subsidiary had not been terminated by the Subsidiary
without cause or by Employee for good reason,
then, for all purposes of this Agreement, the filing of the report constituting
a Change in Control under Paragraph 1(a) shall be treated as if it had not
occurred and this Agreement shall return to the status it had immediately before
the filing of the report constituting a Change in Control under Paragraph 1(a).
Accordingly, if and when a new Change in Control occurs, this Agreement will
again become operative on the date of that new Change in Control.
3. Employment, Contract Period.
---------------------------
(a) Subject to the terms and conditions of this Agreement, upon
the occurrence of a Change in Control, the Company shall cause the
Subsidiary to continue to employ Employee and Employee shall continue in
the employ of the Subsidiary for the period specified in Paragraph 3(b)
(the "Contract Period"), in the position and with the duties and
responsibilities set forth in Paragraph 4.
(b) The Contract Period shall commence on the date of occurrence
of a Change in Control (the "Change in Control Date") and, subject only to
the provisions of Paragraph 11 below, shall continue for a period of thirty
months to the close of business on the day (the "Contract Expiration Date")
falling thirty months after the Change in Control Date.
4. Position, Duties, Responsibilities. At all times during the
----------------------------------
Contract Period, Employee shall:
(a) hold the same position with substantially the same duties and
responsibilities as an executive of the Subsidiary as Employee held
immediately before the Change in Control Date and as those duties and
responsibilities may be extended, from time to time during the Contract
Period, by the Board with Employee's consent;
(b) adhere to and implement the policies and directives
promulgated, from time to time, by the Board;
(c) observe all Company and Subsidiary policies applicable to
executive personnel of the Company and Subsidiary; and
(d) devote [his][her] business time, energy, and talent to the
business of and to the furtherance of the purposes and objectives of the
Company and the Subsidiary to
3
generally the same extent as [he][she] has so devoted [his][her] business
time, energy, and talent before the Change in Control Date, and neither
directly nor indirectly render any business, commercial, or professional
services to any other person, firm, or organization for compensation
without the prior approval of the Board.
Nothing in this Agreement shall preclude Employee from devoting reasonable
periods of time to charitable and community activities or the management of
[his][her] investment assets provided such activities do not materially
interfere with the performance by Employee of [his][her] duties hereunder.
5. Compensation. For services actually rendered by Employee on
------------
behalf of the Subsidiary during the Contract Period as contemplated by this
Agreement, the Company shall cause to be paid to Employee a base salary at a
rate equal to the highest of (a) the rate in effect immediately before the
Change in Control Date, (b) the rate in effect exactly two years before the
Change in Control Date, or (c) such greater rate as the Company may determine.
The base salary shall be paid to Employee in the same increments and on the same
schedule each month as in effect immediately before the Effective Date.
Employee shall not be entitled to any base salary during any period when
[he][she] is receiving long-term disability benefits under the disability
benefit arrangement provided to Employee by the Company. In addition, the
Company shall also cause to be paid to Employee (a) in the event the Change in
Control Date occurs between January 1 and March 1 of a calendar year, an annual
bonus for the year immediately preceding the year in which the Change in Control
Date occurs determined in accordance with the Company's bonus plan as in effect
immediately prior to the Change in Control Date for the preceding calendar year,
such bonus to be paid to Employee on the March 1 first following the Change in
Control Date, (b) an annual bonus for the year in which the Change in Control
Date occurs determined in accordance with the Company's bonus plan as in effect
immediately prior to the Change in Control Date and at a level no less than the
target amount thereunder for the year in which the Change in Control Date occurs
(the "Bonus Amount"), such bonus to be paid to Employee on the March 1 first
following the end of the calendar year in which the Change in Control Date
occurs, and (c) an annual bonus equal to not less than the Bonus Amount for each
of the next two calendar years beginning after the year in which the Change in
Control Date occurs, payable in each case on the March 1 following the calendar
year for which such bonus is paid or, if earlier, on the Contract Expiration
Date.
6. Vacation. Employee will be entitled to such periods of vacation
--------
and sick leave allowance each year as are determined by the Subsidiary's
vacation and sick leave policy for executive personnel as in effect immediately
before the Change in Control Date or as may be increased from time to time
thereafter. Neither vacation time nor sick leave allowance will be accumulated
from year to year.
7. Other Company Plans, Benefits, and Perquisites. During the
----------------------------------------------
Contract Period Employee shall be entitled to participate in the Company's
Pension Plan applicable to salaried employees (the "Salaried Plan"); the
Incentive Savings and Stock Ownership Plan; and every other employee benefit
plan or arrangement not specifically referred to in this Agreement that is
generally available to executive personnel of the Company and Subsidiary
immediately
4
before the Change in Control Date or that is specifically extended to Employee
by the Company or the Subsidiary before the Change in Control Date, whether or
not Employee is eligible to participate in such plan or arrangement on the date
of this Agreement. Employee's participation in and benefits under any such plan
or arrangement shall be on the terms and subject to the conditions specified in
the governing document of the particular plan or arrangement as in effect
immediately before the Change in Control Date, which terms and conditions shall
not be amended during the Contract Period unless the benefits to Employee are at
least as great under the plan or arrangement as amended (or under a substitute
plan or arrangement) as were the benefits under the plan or arrangement as in
effect immediately before the Change in Control Date. The Company or the
Subsidiary will also provide Employee with such perquisites during the Contract
Period as the Company or the Subsidiary customarily provided to similarly
situated executive personnel in the period immediately before the Change in
Control Date.
8. Additional Benefit. If a Change in Control occurs and this
------------------
Agreement becomes operative and thereafter Employee's employment is terminated
by the Subsidiary without cause or by Employee for good reason, whether such
termination occurs before, on, or after the Contract Expiration Date, the
Company shall cause to be paid and provided benefits to or with respect to
Employee in such amounts and at such times so that the aggregate benefits
payable to or with respect to Employee under the Salaried Plan and any Excess
Benefit Plan maintained in connection with the Salaried Plan and under this
Agreement with respect to the Salaried Plan and any such Excess Benefit Plan
will be equal to the aggregate benefits that would have been paid to or with
respect to Employee under the Salaried Plan and any such Excess Benefit Plan if
Employee were exactly five years older than [his][her] actual age and [his][her]
credit under the Salaried Plan and any such Excess Benefit Plan were equal to
the greater of [his][her] actual service or the amount of service [he][she] is
deemed to have under Paragraph 12(a)(ii), below. If Employee's employment is
terminated after a Change in Control by the Company without cause or by Employee
for good reason and Employee is entitled to additional benefits by virtue of the
additional five years of deemed age provided for in this Paragraph 8, then the
Company shall directly provide such benefits to Employee in the same manner as
additional benefits are to be provided to Employee under Paragraph 12(a), below.
9. Priority of Paragraphs 2 and 8. Paragraph 2 of this Agreement
------------------------------
shall take precedence over Paragraph 8 of this Agreement so that if a Change in
Control occurs and is subsequently undone under Paragraph 2 of this Agreement,
Employee will thereafter have no rights under Paragraph 8 of this Agreement
unless and until a further Change in Control occurs.
10. Effect of Disability. If during the Contract Period and before
--------------------
[his][her] employment hereunder is otherwise terminated, Employee becomes
disabled to such an extent that [he][she] is prevented from performing
[his][her] duties hereunder by reason of physical or mental incapacity: (a)
[he][she] shall be entitled to disability and other benefits at least equal to
those that would have been available to [him][her] had the Subsidiary continued,
throughout the period of Employee's disability, all of its programs, benefits,
and policies with respect to disabled employees that were in effect immediately
before the Change in Control; and (b) if [he][she] recovers from [his][her]
disability before the end of the Contract Period, [he][she] shall be reinstated
as an active employee for the remainder of the Contract Period under and subject
to all
5
of the terms of this Agreement including, without limitation, the Company's
right to terminate Employee with or without cause under Paragraph 11.
11. Termination Following a Change in Control. Following a Change in
-----------------------------------------
Control:
(a) Employee's employment hereunder will terminate without further
notice upon the death of Employee;
(b) The Subsidiary may terminate Employee's employment hereunder
effective immediately upon giving notice of such termination:
(i) for "cause," (A) if Employee commits an act of fraud,
embezzlement, theft, or other similar criminal act constituting a
felony and involving the Company's business or (B) if Employee
breaches [his][her] agreement with respect to the time to be devoted
to the business of the Company and the Subsidiary set forth in
Paragraph 4(d) hereof and fails to cure such breach within 30 days of
receipt of written notice of such breach from the Board; or
(ii) without cause at any time; and
(c) Employee may terminate [his][her] employment hereunder effective
immediately upon giving of notice of such termination:
(i) without cause at any time; or
(ii) for "good reason," which, for purposes of this Agreement
shall mean the occurrence of any of the following:
(A) any reduction in base salary or position or any
material reduction in responsibilities or duties contemplated for
Employee under this Agreement or any material reduction in the
aggregate of employee benefits, perquisites, or fringe benefits
contemplated for Employee under this Agreement, provided that any
particular reduction described in this clause (A) shall constitute
"good reason" only if Employee terminates [his][her] employment within
six months of the date of the reduction;
(B) any good faith determination by Employee that, as a
result of fundamental differences of opinion between Employee and the
Board as to the goals of the Company or the Subsidiary, Employee is
unable to carry out the responsibilities and duties contemplated for
Employee under this Agreement, provided that any determination by
Employee described in this clause (B) shall constitute "good reason"
only if Employee terminates [his][her] employment within six months of
the Change in Control Date; or
6
(C) any material change in the geographic location of
Employee's principal place of employment (e.g., if Employee's
principal place of employment is in Cleveland, Ohio, a change to a
location outside of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇), provided
that any such change described in this clause (C) shall constitute
"good reason" only if Employee terminates [his][her] employment within
six months of the date of the Employee receives notice of the change
in location.
12. Severance Compensation.
----------------------
(a) If, before the Contract Expiration Date, Employee's
employment is terminated by the Subsidiary without cause or by Employee for
good reason, then, except as provided in Paragraph 12(b), 12(c), or 12(d),
the Company shall cause to be paid and provided to Employee base salary at
the highest monthly rate payable to Employee during the Contract Period and
annual bonus awards as described in Paragraph 5, to be paid at the times
provided in Paragraph 5 hereof through the last to occur of (x) the
expiration of six months after the effective date of the termination, and
(y) the Contract Expiration Date (such last-to-occur date is hereinafter
referred to as the "Severance Benefits Termination Date"); and the
following benefits for a period of twelve months following the Contract
Expiration Date:
(i) coverage under the Company's medical insurance plan, short-
term disability plan, long-term disability plan, salary continuation
arrangement, disability benefit arrangement, and executive life
insurance benefit (provided that [he][she] became eligible to
participate therein prior to the date [his][her] employment is
terminated), each as in effect on the Change in Control Date (or, if
subsequently amended to increase benefits to Employee or [his][her]
dependents, as so amended) and each as if Employee's employment had
continued through the Severance Benefits Termination Date; and
(ii) coverage and service credit under the Salaried Plan and any
Excess Benefit Plan maintained in connection with the Salaried Plan
under which [he][she] is eligible to participate so that the aggregate
benefits payable to or with respect to the Employee under the Salaried
Plan and any such Excess Benefit Plan will be equal to the aggregate
benefits that would have been paid to or with respect to Employee
under the Salaried Plan and any such Excess Benefit Plan if Employee's
employment had continued through the Severance Benefits Termination
Date.
If any of the benefits to be provided under one or more of the plans,
agreements, or arrangements specified above cannot be provided through that
plan, agreement, or arrangement to Employee following termination of
[his][her] employment, the Company shall cause the full equivalent of such
benefits to Employee. For example, since it is not possible to provide
additional service credit directly through the Salaried Plan, if Employee
becomes entitled to an additional 18 months of service credit under the
7
Salaried Plan pursuant to (ii) above, the Company will be required to cause
payment to Employee, from its general assets or those of its Subsidiary, on
each date on which Employee receives a payment from the Salaried Plan, a
supplemental payment equal to the amount by which that particular payment
under the Salaried Plan would have been increased if Employee's total
service credit under the Salaried Plan were 18 months greater than is
actually the case. In addition, if in these circumstances any payments
become due under the Salaried Plan with respect to Employee following
[his][her] death, the Company will be obligated to cause similar
supplemental payments with respect to Employee to be made on the dates on
which payments are made with respect to Employee under the Salaried Plan.
(b) Notwithstanding the foregoing provisions of Paragraph 15(a),
the Company shall cause any benefit to which Employee becomes entitled
pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan
or the Excess Benefit Plan including, in the event Employee is not fully
vested under the provisions of either, the present value of any otherwise
forfeitable benefit thereunder, to be paid in a single sum to Employee as
soon as practicable, but not more than thirty days following [his][her]
termination of employment, with present value determination to be made
based on actuarial factors for single sum payments set forth in the
Salaried Pension Plan.
(c) If Employee becomes entitled to compensation and benefits
pursuant to Paragraph 12(a), [he][she] shall use reasonable efforts to seek
other employment, provided, however, that [he][she] shall not be required
to accept a position of less importance and dignity or of substantially
different character than that of [his][her] position with the Subsidiary,
nor shall [he][she] be required to accept a position outside the geographic
area in which [he][she] resides on the Change in Control Date. The
Company's and the Subsidiary's obligations under items (i) and (ii) of
Paragraph 12(a) will be offset by payments and benefits received by
Employee from another employer to the following extent:
(i) The obligation to pay any particular installment of base
salary following Employee's termination will be offset, on a dollar
for dollar basis, by any base salary received by Employee from another
employer before the date on which the installment of base salary is
payable by the Company or the Subsidiary.
(ii) To the extent that Employee is provided medical, dental,
or short-term or long-term disability income protection benefits by
another employer during any period, the Company will be relieved of
its obligation to provide such benefits to Employee. For example, if a
new employer provides Employee with a medical benefits plan that pays
$500.00 for a specific claim made by Employee and the Company's
medical insurance plan would have paid $750.00 for that claim, then
the Company will be obligated to pay Employee $250.00 with respect to
that claim.
8
Other than as provided in this Paragraph 12(c), Employee shall have no duty
to mitigate the amount of any payment or benefit provided for in this
Agreement.
(d) If during any period in which Employee is entitled to payments or
benefits under Paragraph 12(a) Employee materially and willfully breaches
[his][her] agreement with respect to confidential information set forth in
Paragraph 13 hereof and such breach directly causes the Company or the
Subsidiary substantial and demonstrable damage, then the Company will be
relieved of its obligations under Paragraph 12(a) hereof as of the first
day of the month immediately following the date of such material breach.
(e) If Employee dies on or before the Severance Benefits Termination
Date or, with respect to benefits, the Contract Expiration Date, and
immediately before [his][her] death [he][she] is entitled to payments or
benefits under Paragraph 12(a), the Company will be relieved of its
obligations under Paragraph 12(a) with respect to base salary and bonus
payments as of the first day of the month immediately following the month
in which Employee dies and thereafter the Company will cause to be provided
to Employee's beneficiaries and dependents salary continuation payments,
benefits under any Excess Benefits Plan (as supplemented by item (ii) of
Paragraph 12(a)), and continuing medical and dental benefits to the same
extent (subject to reduction for payments or benefits from a new employer
under Paragraph 12(c)) as if Employee's death had occurred while Employee
was in the active employ of the Subsidiary.
13. Confidential Information. Employee agrees that [he][she] will
------------------------
not, during the term of the Agreement or at any time thereafter, either directly
or indirectly, disclose or make known to any other person, firm, or corporation
any confidential information, trade secret, or proprietary information of the
Company or the Subsidiary that Employee may acquire in the performance of
Employee's duties hereunder. Upon the termination of Employee's employment with
the Subsidiary, Employee agrees to deliver forthwith to the Subsidiary any and
all literature, documents, correspondence, and other materials and records
furnished to or acquired by Employee during the course of such employment.
14. Costs of Enforcement. The Company shall pay and be solely
--------------------
responsible for any and all costs and expenses (including attorneys' fees)
incurred by Employee in seeking to enforce the Company's obligations under this
Agreement unless and to the extent a court of competent jurisdiction determines
that the Company was relieved of those obligations because (a) the Subsidiary
terminated Employee for cause (as determined under Paragraph 11(b)(i) hereof),
(b) Employee voluntarily terminated [his][her] employment other than for good
reason (as determined under Paragraph 11(c)(ii) hereof), or (c) Employee
materially and willfully breached [his][her] agreement with respect to
confidential information and such breach directly caused substantial and
demonstrable damage to the Company. The Company shall forthwith pay directly or
reimburse Employee for any and all such costs and expenses upon presentation by
Employee or by counsel selected from time to time by Employee of a statement or
statements prepared by Employee or by such counsel of the amount of such costs
and expenses. If and to the extent a court of competent jurisdiction renders a
final binding judgment determining that the Company was relieved of its
obligations for any of the reasons set forth in (a), (b), or (c) above,
9
Employee shall repay the amount of such payments or reimbursements to the
Company. In addition to the payment and reimbursement of expenses of enforcement
provided for in this Paragraph 14, the Company shall pay to Employee in cash, as
and when the Company makes any payment on behalf of, or reimbursement to,
Employee, an additional amount sufficient to pay all federal, state, and local
taxes (whether income taxes or other taxes) incurred by Employee as a result of
(x) payment of the expense or receipt of the reimbursement, and (y) receipt of
the additional cash payment. The Company shall also pay to Employee interest
(calculated at the Base Rate from time to time in effect at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇, compounded monthly) on any payments or benefits that are paid
or provided to Employee later than the date on which due under the terms of this
Agreement.
15. Excise Tax Gross-Up Payments.
----------------------------
(a) In the event it shall be determined following a Change in Control
that any payment or distribution by the Company or the Subsidiary or other
amount with respect to the Company to or for the benefit of Employee,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Paragraph 15 (a "Payment"), is (or
will be) subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") or any interest or penalties
are (or will be) incurred by Employee with respect to the excise tax
imposed by Section 4999 of the Code with respect to the Company (the excise
tax, together with any interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), Employee shall be entitled to receive an
additional cash payment (an "Excise Tax Gross-Up Payment") from the Company
in an amount equal to the sum of the Excise Tax and an amount sufficient to
pay the cumulative Excise Tax and all cumulative income taxes (including
any interest and penalties imposed with respect to such taxes) relating to
the Excise Tax Gross-Up Payment so that the net amount retained by Employee
is equal to all payments received pursuant to the terms of this Agreement
or otherwise less income taxes (but not reduced by the Excise Tax).
(b) Subject to the provisions of Paragraph 15(c), all determinations
required to be made under this Paragraph 15, including whether and when an
Excise Tax Gross-Up Payment is required and the amount of such Excise Tax
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by Employee (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Employee
within 30 days after the receipt of notice from Employee that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that at any time relevant to this Agreement the Accounting Firm is
serving as accountant or auditor for the individual, entity or group or
person effecting the Change in Control, Employee shall appoint another
nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Excise Tax Gross-
Up Payment, as determined in
10
accordance with this Paragraph 15, shall be paid by the Company to Employee
within five days after the receipt of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable by
Employee, it shall so indicate to Employee in writing. Any determination
by the Accounting Firm shall be binding upon the Company and Employee. As
a result of uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm, it is
possible that Excise Tax Gross-Up Payments that the Company should have
made will not have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event the Company
exhausts its remedies in accordance with Paragraph 15(c) and Employee
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of Underpayment that has occurred and the
Underpayment shall be promptly paid by the Company to or for the benefit of
Employee.
(c) Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require an Excise Tax
Gross-Up Payment (that has not already been paid by the Company). The
notification shall be given as soon as practicable but no later than ten
business days after Employee is informed in writing of the claim and shall
apprise the Company of the nature of the claim and the date on which the
claim is requested to be paid. Employee shall not pay the claim prior to
the expiration of the 30-day period following the date on which Executive
gives notice to the Company or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Company
notifies the Employee in writing prior to the expiration of the 30-day
period that it desires to contest the claim, Employee shall:
(i) give the Company any information reasonably requested by
the Company relating to the claim;
(ii) take any action in connection with contesting the claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to the claim by an attorney reasonably selected by the
Company;
(iii) cooperate with the Company in good faith in order
effectively to contest the claim; and
(iv) permit the Company to participate in any proceedings
related to the claim.
The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest
and shall indemnify and hold Employee harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of the representation and payment of costs and
expenses. Without limitation of the foregoing provisions of this Paragraph
15, the Company shall control all proceedings taken in
11
connection with the contest and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings, and conferences
with the taxing authority in respect of the claim and may, at its sole
option, either direct Employee to pay the tax claimed and ▇▇▇ for a refund
or contest the claim in any permissible manner, and Employee agrees to
prosecute the contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine. If the Company directs Employee to
pay the claim and ▇▇▇ for a refund, the Company shall advance the amount of
payment to Employee, on an interest-free basis, and shall indemnify and
hold Employee harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed
with respect to the advance or with respect to any imputed income with
respect to the advance; and any extension of the statute of limitations
relating to payment of taxes for the taxable year of Employee with respect
to which the contested amount is claimed to be due shall be limited solely
to the contested amount. The Company's control of the contest shall be
limited to issues with respect to which an Excise Tax Gross-Up Payment
would be payable hereunder and Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by Employee of an amount advanced by the
Company pursuant to Paragraph 15(c), Employee becomes entitled to receive
any refund with respect to the claim, Employee shall, subject to the
Company's compliance with the requirements of Paragraph 15(c), promptly pay
to the Company the amount of the refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
Employee of an amount advanced by the Company pursuant to Paragraph 15(c),
a determination is made that Employee shall not be entitled to any refund
with respect to the claim and the Company does not notify the Employee in
writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the
advance shall offset, to the extent thereof, the amount of Excise Tax
Gross-Up Payment required to be paid.
16. Outplacement. Following any termination of employment occurring
------------
after a Change in Control other than for cause as described in Paragraph 11(b),
whether such termination occurs during or after the Contract Period, the Company
shall provide to Employee at its expense full executive level outplacement
services to assist Employee in securing suitable employment, such outplacement
services to be provided by a party selected by Employee, provided that Employee
must select and commence use of such services within six months of [his][her]
date of termination of employment with the Subsidiary and all other affiliates
of the Company.
17. Employment Rights. Nothing expressed or implied in this
-----------------
Agreement shall create any right or duty on the part of the Company, the
Subsidiary, or Employee to have Employee remain in the employ of the Subsidiary
before any Change in Control and Employee shall have no rights under this
Agreement if [his][her] employment with the Subsidiary is
12
terminated for any reason or for no reason before any Change in Control. Nothing
expressed or implied in this Agreement shall create any duty on the part of the
Company or the Subsidiary to continue in effect, or continue to provide to
Employee, any plan or benefit unless and until a Change in Control occurs. If,
before a Change in Control, the Company or the Subsidiary ceases to provide any
plan or benefit to Employee, nothing in this Agreement shall be construed to
require the Company or the Subsidiary to reinstitute that plan or benefit to
Employee upon the later occurrence of a Change in Control.
18. Notices. For purposes of this Agreement, all communications
-------
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or when mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company
(Attention: President) at its principal executive office and to Employee at
[his][her] principal residence, or to such other address as either party may
have furnished to the other in writing and in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
19. Assignment, Binding Effect.
--------------------------
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company and the Company's successors and assigns. The
Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all
of the business and or assets of the Company, by agreement in form and
substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken
place.
(b) This Agreement shall be binding upon Employee and this Agreement
and all rights of Employee hereunder shall inure to the benefit of, and be
enforceable by, Employee and [his][her] personal or legal representatives,
executors, or administrators. No right, benefit, or interest of Employee
hereunder shall be subject to assignment, anticipation, alienation, sale,
encumbrance, charge, pledge, hypothecation, or to execution, attachment,
levy, or similar process; except that Employee may assign any right,
benefit, or interest hereunder if such assignment is permitted under the
terms of any plan or policy of insurance or annuity contract governing such
right, benefit, or interest.
20. Invalid Provisions.
------------------
(a) Any provision of this Agreement that is prohibited or
unenforceable shall be ineffective to the extent, but only to the extent,
of such prohibition or unenforceability without invalidating the remaining
portions hereof and such remaining portions of this Agreement shall
continue to be in full force and effect.
(b) In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable, the parties will
negotiate in good faith to
13
replace such provision with another provision that will be valid or
enforceable and that is as close as practicable to the provision held
invalid or unenforceable.
21. Modification. No modification, amendment, or waiver of any of
------------
the provisions of the Agreement shall be effective unless in writing,
specifically referring hereto, and signed by both parties.
22. Waiver of Breach. The failure at any time to enforce any of the
----------------
provisions of this Agreement or to require performance by the other party of any
of the provisions of this Agreement shall in no way be construed to be a waiver
of such provisions or to affect either the validity of this Agreement or any
part of this Agreement or the right of either party thereafter to enforce each
and every provision of this Agreement in accordance with the terms hereof.
23. Entire Agreement. This Agreement forms the entire agreement
----------------
between the parties hereto with respect to the subject matter contained in this
Agreement and, except as otherwise provided herein, shall supersede all prior
agreements, promises and representations regarding employment, compensation,
severance or other payments contingent upon termination of employment, whether
in writing or otherwise.
24. Governing Law. This Agreement has been made in and shall be
-------------
governed and construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement on the day and year first above written.
OGLEBAY NORTON COMPANY
By:________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief
Executive Officer
___________________________________________
[NAME]
14