Exhibit 10.31
CHANGE IN CONTROL AND EMPLOYMENT AGREEMENT
THIS CHANGE IN CONTROL AND EMPLOYMENT AGREEMENT is entered into on
this _____ day of ________________, 2004, by and between OGLEBAY NORTON COMPANY,
an Ohio 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), other than Ingalls & Snyder and any of their respective affiliates,
is or has become a beneficial owner, directly or indirectly, of securities
of the Company representing 50% 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 5.01 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, provided that a Form 8-K filed in connection with
consummation of the Company's plan of reorganization with respect to the
Company's petition for reorganization under chapter 11 of the Bankruptcy
Code filed on February 23, 2004 shall not be a Change in Control for
purposes of this Agreement;
(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 appointment, 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 50% 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
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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;
(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
twelve months to the close of business on the day (the "Contract
Expiration Date") falling twelve 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
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(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 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 or (b) the rate in effect at any time during the two
years preceding the Change in Control Date. 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 31 of a
calendar year, an annual bonus (if not previously paid) for the year immediately
preceding the year in which the Change in Control Date occurs determined in
accordance with the Company's bonus plan (other than the Management Incentive
Plan) as in effect immediately prior to the Change in Control Date for the
preceding calendar year, such bonus to be paid to Employee no later than the
March 31 first following the Change in Control Date, and (b) an annual bonus for
the year in which the Change in Control Date occurs determined in accordance
with the Company's bonus plan (other than the Management Incentive 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 no later
than the March 31 first following the end of the calendar year in which the
Change in Control Date occurs. .
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
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that is generally available to executive personnel of the Company and Subsidiary
immediately 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)(B), 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
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reinstated as an active employee for the remainder of the Contract Period under
and subject to all of the terms of this Agreement including, without limitation,
the Company's right to terminate Employee with or without cause under Paragraph
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, pursuant to
(i) or (ii):
(i) For "cause," (A) if Employee has an employment agreement
in effect with the Subsidiary which contains a definition of cause,
then the definition of the term "cause" for purposes of this
Agreement shall be as defined in such employment agreement, or (B)
if the Employee does not have an employment agreement in effect with
the Subsidiary which contains a definition of cause, then "cause"
for purposes of this Agreement shall mean (1) the Employee's
material failure to properly perform the Employee's duties for the
Company or Subsidiary (except due to physical or mental impairment);
(2) the Employee's material violation of Company or Subsidiary
policies as communicated to the Employee; (3) the Employee's
conviction of, or plea of nolo contendere to, a felony under the
laws of the United States or any state or political subdivision
thereof; or (4) the commission of any other similar act by the
Employee that brings the Company or a Subsidiary into substantial
public disgrace or disrepute. Notwithstanding the foregoing, "cause"
shall not be deemed to exist under clause (B)(1), (B)(2) or (B)(4)
unless the Company or Subsidiary provides the Employee with specific
written notice of the facts relating to the event and the Employee
does not cure such conduct within ten (10) business days after the
receipt of such notice.
(ii) Without cause at any time.
(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,
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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
(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 the greater Cleveland metropolitan area),
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 (i) base salary at
the highest monthly rate payable to Employee during the Contract Period
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 a bonus award accrued for the year in
which such termination 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 such termination occurs; and (ii) the following benefits for a
period of twelve months following the Contract Expiration Date:
(A) 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
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(B) 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
Salaried Plan pursuant to (B) 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 12(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.
Employee shall have no duty to mitigate the amount of any
payment or benefit provided for in this Agreement.
(c) If during any period in which Employee is entitled to payments
or benefits 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.
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(d) 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
(B) 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, 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 National City Bank, Cleveland, Ohio,
compounded monthly) on any payments or benefits that are paid or provided to
Employee later than the date on which due under the terms of this Agreement.
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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 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
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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
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 sue 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 sue 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
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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. Withholding Taxes. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal, state, or local
law and any additional withholding to which Employee has agreed.
17. 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.
18. 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 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.
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19. 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.
20. 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.
21. Invalid Provisions.
(a) Any provision of this Agreement that is prohibited or
unenforceable shall be ineffective to the extent, but only to the extent,
of such prohibition or unenforceability without invalidating the remaining
portions hereof and such remaining portions of this Agreement shall
continue to be in full force and effect.
(b) In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable, the parties will
negotiate in good faith to replace such provision with another provision
that will be valid or enforceable and that is as close as practicable to
the provision held invalid or unenforceable.
22. 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.
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23. 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.
24. 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.
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25. Governing Law. This Agreement has been made in and
shall be governed and construed in accordance with the laws of the State
of Ohio. Notwithstanding the foregoing, all benefits and compensation provided
hereunder shall comply with, and be administered in compliance with, the
requirements of Section 409A of the Code, as enacted by the American Jobs
Creation Act of 2004, to the extent applicable.
IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement on the day and year first above written.
OGLEBAY NORTON COMPANY
By:
--------------------------------
Michael D. Lundin,
President and Chief Executive
Officer
--------------------------------------
[NAME]
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