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EXHIBIT 10(k)
IRREVOCABLE TRUST AGREEMENT I
(Salary Continuation, Disability, and Death Benefit
Arrangements, and Prior SupplementaL Retirement Plan)
THIS AGREEMENT is made this 16th day of August, 1989, between
OGLEBAY NORTON COMPANY, a Delaware corporation with its principal offices at
Cleveland, Ohio, as grantor (the "Company"), and BANK ONE, CLEVELAND, NA, a
national banking association, with offices in Cleveland, Ohio, as Trustee.
WHEREAS, the Company is obligated to provide supplemental retirement
benefits to seven of its former key executives under a Supplemental Retirement
Plan adopted December 31, 1974 and has provided to certain of its key executives
Salary Continuation Arrangements pursuant to letters dated November 29, 1982,
Disability Benefit Arrangements pursuant to letters dated November 29, 1982, and
Death Benefit Arrangements pursuant to letters dated May 1, 1986, to provide
inducements for those executives to continue in the Company's employ until
retirement age and not to engage in activity competitive with the Company (such
plan and such arrangements are sometimes hereinafter referred to collectively as
the "Plans" and individually as a "Plan" and the former and current key
executives who are covered by one or more of the Plans are hereinafter referred
to as "Participants");
WHEREAS, the Plans provide for payment of benefits in specified
circumstances to Participants and/or to the surviving spouse or other
beneficiary under a Plan of a Participant (such benefits payable under the Plans
are herein referred to as "Benefits" and the surviving spouses and other
beneficiaries of Participants under the Plans are herein referred to
collectively as "Beneficiaries" and individually as a "Beneficiary");
WHEREAS, the Company desires to establish an irrevocable grantor trust
(the "Trust") and transfer to the Trust assets to be held therein, subject to
the claims of the Company's creditors in the event of the Company's insolvency,
until paid to Participants or their Beneficiaries;
WHEREAS, it is the intention of the Company to make payments of Benefits
directly from assets other than those held in the Trust until such time as the
assets held by the Trust are determined to be sufficient to pay all future
Benefits under the Plans;
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NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held, and disposed of as follows:
Section 1. TRUST FUND.
(a) Subject to the claims of its creditors as set forth in
Section 3, the Company hereby deposits with the Trustee the property described
in the attached Schedule A, and the Company and the Trustee hereby agree that
such property, all additions made in accordance with the provisions of this
Agreement, and the increments, proceeds, investments, and reinvestments of such
property and additions shall be held in trust and administered and distributed
by the Trustee as provided in this Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) Any and all net income generated by the Trust shall be
accumulated and added and credited to its principal upon receipt. Any and all
increments, proceeds, investments, and reinvestments of the principal of the
Trust similarly shall be credited to and remain part of such principal.
(d) The principal of the Trust and any earnings thereon shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes herein set forth. Neither Participants,
nor Beneficiaries, nor the Plans, shall have any preferred claim on, or any
beneficial ownership interest in, any assets of the Trust prior to the time such
assets are paid to Participants or Beneficiaries as Benefits as provided in
Section 2. Until satisfied by payment, all of the obligations of the Company
under the Plans and this Agreement shall be unsecured promises of the Company to
pay benefits under those Plans and the Participants and Beneficiaries shall have
the status of unsecured creditors of the Company with respect to those
obligations.
(e) It is intended that the Trust will be treated for federal
income tax purposes as a grantor trust, with the result that all items of
income, exclusion, deduction, and credit with respect to the Trust will be
attributed to the Company as the owner thereof in accordance with the provisions
of Subpart E of Part I of Chapter lJ of the Internal Revenue Code of 1986, as it
may be amended (the "Code"), or the corresponding provisions of any future
internal revenue law. The Trustee shall prepare tax information relating to the
administration of the trust, shall furnish the same to the Company, and shall
file tax returns accordingly.
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It is also intended that transfers to the Trust of assets will not be transfers
of property for purposes of section 83 of the Code or section 1.83-3(e) of the
Treasury Regulations and that no amounts held in the Trust will be includable as
compensation in the gross income of any Participant or Beneficiary before the
taxable year of the Participant or Beneficiary in which the amounts are actually
distributed or made available to the Participant or Beneficiary by the Trustee.
The provisions of this Trust shall be interpreted and administered to the extent
possible in such a manner as to carry out and effectuate the intentions
expressed in this Paragraph 1(e).
(f) The Company may at any time and from time to time, pursuant
to authorization by the Company's Board of Directors, contribute additional cash
or other property to the Trust to augment the principal to be held,
administered, and disposed of by the Trustee as provided in this Agreement.
Section 2. PAYMENTS TO PARTICIPANTS AND BENEFICIARIES.
(a) Notwithstanding the other provisions of this Section 2, the
Trustee shall not make any distribution as provided in this Section 2 if, at the
time of the distribution, the Trustee is required to suspend such distributions
(as provided in Paragraph 3(c)) by reason of having received notice or
allegations of the Company's insolvency.
(b) At least once each calendar year and in in advance of the
month or months covered by the schedule so furnished, the Company shall furnish
to the Trustee, for each calendar month in which any payment of Benefits is to
be made to any Participant or Beneficiary under any of the Plans, a "Benefit
Schedule" showing the name and address of each Participant or Beneficiary who is
entitled to receive a payment of Benefits in that month and the amount of each
such payment. If the Company so requests with respect to any payment shown on
any Benefit Schedule, the Trustee shall make the payment to the Participant or
Beneficiary shown on the Benefit Schedule to be entitled to the payment. The
Trustee shall have no liability to the Company or any other person for the
making of any distributions made in reliance upon any such request.
(c) If any Participant or Beneficiary (a "Claimant") submits a
written claim (a "Claim") to the Trustee notifying the Trustee that the Company
has failed to make at least part of one payment of Benefits under a Plan to the
Claimant when due and requesting that the Trustee pay any Benefits to the
Claimant, the
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Trustee shall promptly forward a copy of the Claim to the Company. (Any such
claim may include a request that Benefits acknowledged by the Claimant to be not
yet due be paid as they become due in the future.) Within ten days of receipt of
the Claim, the Company shall (i) deliver to the Trustee an amendment to the
Benefit Schedule for the month or months with respect to which the Claim is made
acknowledging the validity of all or part of the Claim and providing for the
payment of Benefits so acknowledged to be validly claimed by the Claimant and/or
(ii) notify the Trustee that the Company disputes all or part of the contents of
the Claim. If at any time the Company delivers an amendment to one or more
Benefit Schedules in which the Company acknowledges that payments of Benefits to
a Claimant are overdue, the Trustee shall pay to the Claimant the overdue
payments of Benefits that are so acknowledged by the Company together with
interest thereon as provided in Paragraph 2(j). If the Company fails to deliver
an amendment to the Benefit Schedule acknowledging the validity of all or part
of a Claim, the Trustee shall make no distribution pursuant to that part of the
Claim not acknowledged by the Company unless and until the Claimant has obtained
a binding arbitration order confirming the validity in whole or in part of the
unacknowledged part of the Claim. Upon receipt of a binding arbitration order
holding that a Participant or Beneficiary is entitled to payments of Benefits
under any of the Plans, the Trustee shall make payments of the Benefits
specified in the order at the times and in the amounts specified in the order.
The Trustee shall have no liability to the Company or any other person for any
distributions made in reliance on an amended Benefit Schedule provided by the
Company or on a binding arbitration order obtained in favor of any Participant
or Beneficiary.
(d) If any amount of cash or other property held in the Trust is
included by the Internal Revenue Service in the gross income of a Participant or
of a Beneficiary before actual distribution of the amount to the Participant or
Beneficiary, the Trustee shall make a distribution to the person in whose gross
income the amount is so included (the "Taxpayer") equal to the amount included
in the gross income of the Taxpayer within 30 days after the Taxpayer delivers
to the Company and to the Trustee (i) written notice of the inclusion of the
amount in the gross income of the Taxpayer and (ii) a copy of a written
determination by the Internal Revenue Service with respect to such inclusion.
(e) The Company hereby agrees to submit any dispute between the Company
and any Participant or Beneficiary as to the entitlement of such Participant
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or Beneficiary to the payment of Benefits under any of the Plans to binding
arbitration under the rules of the American Arbitration Association upon demand
for such arbitration by such Participant or Beneficiary. Moreover, the Company
agrees that the costs of the arbitration shall be paid by the Company unless the
arbitration order holds that the payments of Benefits due to the Participant or
Beneficiary do not differ significantly from the payments of Benefits
acknowledged by the Company to be payable in a Benefit Schedule delivered to the
Trustee not later than ten days after the Participant or Beneficiary has
delivered to the Company a demand for binding arbitration and that, in cases
where the arbitration order so holds, the costs of arbitration shall be borne
as the arbitration order may direct. The Company hereby authorizes the Trustee
to accept as binding any arbitration order obtained by any Participant or
Beneficiary as a result of any such arbitration proceedings.
(f) All distributions made by the Trustee to a Participant or his
Beneficiary shall be made on behalf of the Company and the acceptance of any
such distribution by the Participant or his Beneficiary shall constitute a
complete acquittance and discharge to the Company for a portion of the Benefits
due under the Plans in respect of the Participant equal to the amount so
distributed and accepted.
(g) During any period in which any Participant or Beneficiary to whom
distributions may be made in accordance with this Section 2 is under any legal
disability or in the judgment of the Trustee is incapable of attending to
personal financial affairs by reason of any mental or physical condition or the
infirmities of advanced age, any such distribution, in the discretion of the
Trustee, either may be made to him or her directly or may be made to any other
individual or organization selected by the Trustee for his or her exclusive use
and benefit, or the use and benefit of his or her legal dependents, if any,
including any such other individual or organization furnishing goods or services
to or for his or her use or benefit or the use and benefit of any such
dependents. Each such distribution may be made without the intervention of a
guardian, and the receipt of the distributee in each case shall constitute a
complete acquittance to the Trustee, and to the Company, for the amount so
distributed and its proper application.
(h) No individual who is not listed on Schedule B on the date this
Agreement is made shall become a Participant for purposes of this Agreement. Any
individual who is listed on Schedule B on the date this Agreement is made shall
be treated as a
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Participant for purposes of this Agreement only with respect to (i) that Plan or
those Plans opposite which his name is listed on Schedule B and (ii) any amended
or updated version of one or more of the 1982 Salary Continuation Arrangements,
the 1982 Disability Benefit Arrangements, and the 1988 Death Benefit
Arrangements that is generally similar to the version of that Plan that is
available to those individuals listed on Schedule B opposite those three Plans.
(i) For purposes of this Agreement, a Participant shall be
deemed to be an "Eligible Participant" at any particular time if and only if, as
of that time, the Participant is entitled to receive payments of Benefits
currently under any of the Plans or may in the future become entitled to receive
payments of Benefits under any of the Plans. For purposes of this Agreement a
Beneficiary shall be deemed to be a "Current Beneficiary" at any particular time
if and only if, as of that time, the Beneficiary is entitled to receive payments
of Benefits currently under any of the Plans.
(j) When making any distribution to a Participant or Beneficiary
with respect to a payment of Benefits that is overdue, the Trustee shall
increase the amount of the distribution to include compound interest on the
overdue payment from the date due to the date of the distribution calculated and
compounded on a daily basis and using as the interest rate for each day during
the period with respect to which interest is due the prime or base lending rate
published by the Trustee and in effect on that day.
Section 3. EFFECT OF COMPANY'S INSOLVENCY. The provisions and
limitations of this Section 3 shall apply notwithstanding any provision to the
contrary contained in any other section of this Agreement.
(a) For purposes of this Agreement, the Company shall be deemed
to be "insolvent" at any particular time if, at that time, it is unable to pay
its ordinary debts and obligations as they become due or it is subject to
proceedings as a debtor under the United States Bankruptcy Code.
(b) Until and unless distributed to Participants or their
Beneficiaries pursuant to Section 2, all property contributed by the Company to
the Trust and the increments, proceeds, investments, and reinvestments thereof
shall be and remain subject to the rights and claims of the general creditors of
the Company as hereinafter set forth as fully as if the Trust did not exist and
title were not held in the name of the Trustee or any nominee of the Trustee.
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(c) The Company's Board of Directors (the "Board") and chief
executive officer shall each have the duty to notify the Trustee of the
Company's becoming insolvent promptly upon the occurrence thereof. If the Board
or chief executive officer notifies the Trustee that the Company is insolvent,
or if the Trustee receives credible written allegations from any other person
claiming to be a creditor of the Company that the Company is insolvent, the
Trustee shall suspend payments under Section 2 and shall notify the nationally
recognized firm of independent accountants appointed by the Company to act as
the Company's independent auditors (or, if the Company has not appointed such
a firm to act as its independent auditors then such nationally recognized firm
of independent accountants as the Trustee may select) and shall direct the firm
so notified (the "Independent Evaluator") to determine within 60 days after
such direction is given whether the Company is insolvent. If the Independent
Evaluator determines the Company is solvent, the Trustee shall resume making
payments under Section 2, including any payments suspended while the Independent
Evaluator was making its determination of the Company's solvency that were not
made by the Company in the interim. If the Independent Evaluator determines the
Company is insolvent, the Trustee shall hold the trust property, during the
period the Company is insolvent, as provided in Paragraph 3(d). All fees for the
services of the Independent Evaluator shall be payable by the Company, but shall
be paid from the assets of the Trust and charged against the principal of the
Trust in the absence of timely payment by the Company.
(d) Upon determination of the Company's insolvency pursuant to Paragraph
3(c), and thereafter for so long as the Company remains insolvent, the Trustee
shall hold the trust property for the benefit of the Company's general creditors
and shall deliver the trust property only in accordance with the orders of a
court having jurisdiction of the application and disposition of the assets of
the Company. The Trustee shall not be liable to the Company or any other person
for any distributions made in accordance with Section 2 before it either (i)
receives notice from the Board or chief executive officer that the Company is
insolvent or (ii) receives credible written allegations from some other person
claiming to be a creditor of the Company that the Company is insolvent. Nor
shall the Trustee be liable to the Company or any other person for any such
distributions made after the Independent Evaluator determines that the Company
is no longer insolvent if, having been insolvent, the Company becomes solvent.
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(e) No provision of this Agreement shall be construed to alter
the status of Participants in the Plan, or of their respective Beneficiaries, as
unsecured general creditors of the Company or to diminish any rights of any
participant or Beneficiary to pursue their rights as general creditors of the
Company with respect to Benefits or otherwise.
Section 4. ADDITIONAL POWERS, DUTIES, AND IMMUNITIES OF THE TRUSTEE. In
the administration of the trust property, the Trustee shall have the following
additional powers, duties, and immunities:
(a) The Trustee is authorized to accept as contributions to the
trust property from the Company, any property, tangible or intangible, that the
Company may contribute, pursuant to authorization by the Board of Directors of
the Company, and to sell, without notice, at public or private sale, and to
exchange, mortgage, lease for any term, manage, operate, pledge, partition,
appraise, apportion, divide in kind, borrow on, hypothecate, or dispose of any
and all of the trust property, whether real or personal, tangible or intangible,
upon such terms and conditions as the Trustee may deem best, except that the
Trustee shall reinvest income and the proceeds from the sale or other
disposition of any asset only as provided in Paragraph 4(b), below. If the
Company contributes any real property to the Trust, the Trustee is authorized to
sell the real property or to hold and lease the same for any period (without
regard to the duration of any trust created under this agreement or to any
statutory restriction) and to undertake such other acts with respect to such
real property as may be necessary or desirable to perfect the Trust's title
thereto and to protect and conserve the interests of the Trust therein.
(b) Except to the extent necessary or advisable to preserve,
manage, operate, or enhance the value of any item of property contributed by the
Company that is not listed in clauses (i) through (v) of this Paragraph 4(b),
the Trustee shall invest and reinvest the trust property, including any income
accumulated and added to principal, only in (i) annuity or life insurance
contracts; (ii) interest-bearing deposit accounts or certificates of deposit
(including any such accounts or certificates issued or offered by the Trustee or
any successor or affiliated corporation but excluding obligations of the
Company); (iii) direct obligations of the United States of America, or
obligations the payment of which is guaranteed, as to both principal and
interest, by the government or an agency of the government of the United States
of America; (iv) readily marketable securities listed on a United States
national securities exchange (other than securities of
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the Company); or (v) shares or other units of participation in any mutual fund,
investment trust, or common trust funds maintained by the Trustee, which are
invested exclusively or predominantly in assets described in the foregoing
clauses (i) through (iv) of this Paragraph 4(a) while allowing the use of
contracts for the immediate or future delivery of financial instruments and
other permitted property. The Trustee shall not be liable to any Participant or
Beneficiary under any Plan for any insufficiency of the trust property to
discharge all Benefits due the same under the Plan; rather, the liability for
all such Benefits shall be and remain the primary and ultimate responsibility of
the Company and any such Benefits not discharged in full by payments made by the
Trustee under this Agreement shall be paid by the Company.
(c) The Trustee is empowered to register securities, and to take and
hold title to other property, in the name of the Trustee or in the name of a
nominee without disclosing the Trust. Securities also may be held in bearer form
and may be held in bulk with certificates of the same class and issuer which are
assets of other fiduciary accounts. The Trustee shall be responsible for any
wrongful acts of any nominee of the Trustee.
(d) The Trustee is empowered to take all actions necessary or advisable
in order to collect any life insurance, annuity, or other benefits or payments
of which the Trustee is the designated beneficiary. The Company shall maintain
in force all life insurance policies held in the Trust by paying all premiums
and other charges due thereon; but if any such premiums or other charges are not
paid directly by the Company, the Trustee shall pay such premiums and other
charges. To the extent the Trustee has cash or its equivalent readily available
for such purpose or policy loans and/or dividends are available, the Trustee
shall pay premiums due with such cash or its equivalent or policy loans and/or
dividends, as the Trustee may deem best. If the Trustee does not have sufficient
cash or its equivalent readily available and policy loans and dividends are not
available, then the Trustee shall dispose of or otherwise use other assets held
by it in the Trust to generate the necessary cash. The Trustee shall have no
liability to the Company or any other person if, as a result of an insufficiency
of cash or its equivalent, policy loans and dividends, and assets that can be
disposed of or otherwise used to generate cash, the Trustee is unable to pay
premiums as they become due. The Trustee shall be named sole owner and
beneficiary of each life insurance policy held in the Trust and shall have full
authority and power to exercise all rights of ownership relating to the
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policy, except that the Trustee shall have no power to name a beneficiary of the
policy other than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor Trustee, or to loan
to any person the proceeds of any borrowing against such policy, or, except as
provided in the immediately preceding sentence or in the last sentence of this
Paragraph 4(d), to surrender any policy or allow any policy to lapse at any time
when there are other assets in the Trust that can be disposed of or otherwise
used to generate any cash necessary to maintain the policy. The Trustee shall
have the power to acquire additional life insurance coverage on Participants
through application for new life insurance. The Trustee shall acquire any
additional life insurance from the agent or agents designated by the Company.
The Trustee shall have the power, with the consent of the Company, to exchange
that portion, if any, of the life insurance coverage on any particular
Participant whose employment with the Company has been terminated prior to the
Participant's attainment of age 60 that is in excess of the amount of such
coverage necessary to provide sufficient proceeds to pay all Benefits that may
become payable with respect to that Participant following the Participant's
death (the "Excess Coverage" on a "Terminated Participant"), for additional life
insurance coverage on other Participants. In addition, the Trustee shall have
the power, with the consent of the Company, to surrender the Excess Coverage on
any Terminated Participant if and only if, at the time of the surrender, the
amount of life insurance coverage on every other Eligible Participant is in
excess of the amount of such coverage necessary to provide sufficient proceeds
to pay all Benefits that may become payable with respect to such Participant
following the Participant's death, using, for purposes of determining the
sufficiency of such coverage, the assumptions with respect to future events set
forth in Section 6.
(e) The Trustee is empowered to employ such agents and attorneys as the
Trustee shall deem advisable and to determine and, except as provided in Section
6, pay the reasonable compensation of any agents and attorneys so employed,
without diminution of the compensation of the Trustee. Such compensation shall
be payable by the Company, but shall be paid from the assets of the Trust and
charged against the principal of the Trust in the absence of timely payment by
the Company. The Trustee shall not be liable for any neglect, omission, or
wrongdoing of any such agent or attorney if reasonable care is exercised in the
selection of such one.
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(f) The Trustee further is empowered to enforce, release, compromise,
and settle any and all claims in favor of or against the Trust, whether or not
such claims are in litigation, upon such terms and conditions as the Trustee
shall deem advisable.
(g) The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
done, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. All such accounts, books and records shall be open
to inspection and audit at all reasonable times by the Company and by Eligible
Participants and Current Beneficiaries. Within sixty (60) days following the
close of each calendar year and within sixty (60) days after the resignation of
the Trustee, the Trustee shall deliver to the Company, to each then surviving
Participant, and to each Current Beneficiary a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such resignation, setting forth all
investments, receipts, disbursements, and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities, and
other property held in the Trust at the end of such year or as of the date of
such resignation, as the case may be.
(h) The Trustee shall have all other powers and duties conferred or
imposed on trustees by law which are consistent with the provisions of this
Agreement and such further powers as may be required to give effect to the
powers and duties of the Trustee expressly set forth in this Agreement
including, without limitation, the power to withhold, deposit, and pay over any
applicable federal, state, or local taxes from any distributions made pursuant
to this Agreement. The Trustee shall not be required to furnish bond, nor shall
the Trustee be required to obtain leave or confirmation from any court before
exercising any of the powers or performing any of the duties of the Trustee; but
the Trustee at all times shall be obligated to act in good faith, to exercise
reasonable prudence, and to accord fair and equitable treatment to the
Participants, their respective Beneficiaries, and the Company. No person dealing
with the Trustee shall be obligated to inquire into the Trustee's powers with
respect to any action that the Trustee may propose to take, and the receipt of
the Trustee for any payment made or property transferred to the Trustee by any
person shall constitute a complete acquittance to such
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person for such payment or property and its proper application.
Section 5. TENURE, SUCCESSION, AND COMPENSATION OF TRUSTEES. The
following provisions relate to the tenure, succession, and compensation of the
Trustee and successor Trustees:
(a) The Company may remove any Trustee from time to time serving
under this Agreement at any time upon giving sixty days written notice to such
Trustee and each Trustee from time to time serving under this instrument shall
have the right to resign by delivering a written notice of resignation to the
Company, except that the Company shall not have any power to remove the Trustee
if at the time of such removal the Company is delinquent with respect to one or
more payments of Benefits then due. No removal or resignation of a Trustee shall
become effective until the acceptance of the trust by a successor Trustee
designated in accordance with Paragraph 5(b).
(b) If Bank One, Cleveland, NA, or any successor to it
designated in accordance with this Paragraph 5(b), for any reason shall decline,
cease, or otherwise fail to serve as Trustee, the vacancy in the trusteeship
shall be filled by a bank or trust company, wherever located, having a capital
and surplus of at least $25,000,000 in the aggregate. If the vacancy occurs by
reason of the resignation of the predecessor Trustee, the successor Trustee
shall be selected by the resigning Trustee. If the vacancy occurs for any other
reason, the successor Trustee shall be selected by the Company.
(c) Upon acceptance of the trust, each successor Trustee shall
be vested with the title to the trust property possessed by the Trustee that it
succeeds and shall have all the powers, discretions, and duties of that
predecessor Trustee. No successor Trustee shall be required to furnish bond.
(d) Each successor Trustee may accept as complete and correct
and may rely upon any accounting by any predecessor Trustee and upon any
statement or representation by any predecessor Trustee as to the assets
comprising or any other matter pertaining to the administration of the Trust. No
successor Trustee shall be liable for any act or omission of any predecessor
Trustee or have any duty to enforce or seek to enforce any claim of any kind
against any predecessor Trustee on account of any such act or omission.
(e) The Trustee or any successor Trustee shall be entitled to
receive fees for its ordinary
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services at the rates prescribed for the same in its standard schedule of fees
in effect when such services are rendered and reasonable additional fees and
expenses for any extraordinary services requested or required of it. All fees
for the services of the Trustee or any successor Trustee shall be payable by the
Company, but shall be paid from the assets of the Trust and charged against the
principal of the Trust in the absence of timely payment by the Company.
Section 6. REVERSION OF EXCESS ASSETS. From time to time, if and when
requested by the Company to do so, the Trustee shall engage the services of The
Xxxxx Company or such other independent actuary as may be mutually satisfactory
to the Company and to the Trustee, at the expense of the Company, to determine
the actuarial present value of the maximum future Benefits that could become
payable under all of the Plans and the actuarial present value of all assets
held in the Trust. The Company shall pay the fees of such independent actuary
and of any appraiser engaged by, or in connection with the engagement of, such
independent actuary to value any property held in the Trust, and such fees shall
not be paid by the Trustee or charged against Trust assets. The independent
actuary shall make its calculations based on the assumption that no Participant
who is employed by the Company on the date of calculation will leave the employ
of the Company for any reason other than (i) death prior to retirement or (ii)
retirement after becoming entitled to have the maximum amount of Benefits
payable to him or his Beneficiary that is possible under the Plans. In addition,
the independent actuary shall use the mortality, interest rate, annual
percentage salary increase, and other actuarial assumptions then being used for
purposes of the Oglebay Norton Company Pension Plan for Salaried Employees (or,
if current actuarial assumptions under that plan are unavailable, then using
such reasonably comparable current actuarial assumptions as the independent
actuary may determine). If the actuarial present value of all assets held in the
Trust that are of the type described in one of clauses (i) through (v) of
Paragraph 4(b) hereof ("Specified Assets") exceeds 150% of the actuarial present
value of the maximum future Benefits that could become payable under all of the
Plans, then the Trust will be deemed to be "Fully Funded" and the Trustee shall
retain Specified Assets that in the aggregate are at least equal to 150% of the
actuarial present value of the maximum future Benefits that could become payable
under all of the Plans and pay or transfer any other assets (the "Excess
Assets"), upon the request of the Company, as follows:
(a) if, and to the extent, at the time of the request, the trust
("Trust II") established by the Company under the agreement with Bank One,
Cleveland, NA, as trustee, captioned "Irrevocable Trust
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Agreement II (For Employment Agreements and Certain Retirement Benefits)," dated
_____________, 1989 ("Agreement II"), is not then "Fully Funded," as that term
is defined in Agreement II, then the Trustee shall transfer the Excess Assets to
the trustee of Trust II as contributions on behalf of the Company to the
separate accounts in Trust II in such separate amounts so that the amount
contributed to each such separate account will bear the same proportion to the
total amount of Excess Assets so contributed to all such separate accounts as
the total of all amounts theretofore contributed to that separate account bears
to the aggregate total of all amounts theretofore contributed to all such
separate accounts; and
(b) if, and to the extent, at the time of the request,
Trust II is so Fully Funded (or has been terminated), then the Trustee shall
pay or transfer the Excess Assets to the Company;
except that if payment or transfer of all or part of any such excess under (a)
or (b) would leave the Trustee with insufficient liquid assets to pay all
premiums due and to become due on any life insurance policies held in the Trust,
the Trustee shall retain sufficient liquid assets to pay such premiums.
Section 7. PROTECTION OF TRUSTEE. The Company, by making contributions
to the trust property, agrees to indemnify and hold the Trustee harmless in its
private capacity against any and all claims, actions, causes of action,
judgments, surcharges, losses, and liabilities that may be asserted, brought, or
made against the Trustee by any Participant in the Plans or by any Beneficiary
under the Plans and against any costs incurred by the Trustee in its private
capacity in resisting, negotiating, or compromising the same, including
reasonable attorney fees. The Company agrees to indemnify and hold the Trustee
harmless from and against any and all claims, actions, penalties, liabilities,
or losses that may be asserted, brought, or made against the Trustee in
connection with matters relating to the establishment and operation of the
Trust, including, without limitation, claims or liabilities imposed by any
federal or state governmental authority, and against any costs, including,
without limitation, reasonable attorneys' fees, paid or incurred by the Trustee
in defending, negotiating, or compromising the same, but excepting any such
claims, actions, etc. in which there is proof of negligence or of actual bad
faith on the part of the Trustee.
Section 8. AMENDMENT.
(a) This Agreement shall not be subject to amendment by the
Company or any other organization or
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individual in any respect except as provided in this Section 8. No amendment of
this Agreement shall be effective unless (i) it is in writing; (ii) notice of
the amendment, including a copy of the amending language, is provided, at least
ten days but not more than 60 days before the effective date of the amendment,
to the Trustee and to all persons who, at the time of the notice, are either
Eligible Participants or Current Beneficiaries; and (iii) the amendment is
approved as provided in any one of Paragraph 8(b), Paragraph 8(c), or Paragraph
8(d).
(b) At any time and from time to time, this Agreement may be amended to
the extent necessary to obtain the intended tax treatment for the Company, for
the Trust, for Participants, and for Beneficiaries with respect to assets held
in the Trust (as specified in Paragraph 1(e)), if the amendment is approved in
writing "by the Pre-Change in Control Board" (as that phrase is defined in
Paragraph 8(e)), by the Trustee, by the Representative of Currently Employed
Participants, and by the Representative of all other Eligible Participants and
Current Beneficiaries (as identified pursuant to Paragraph 8(f)), except that no
amendment may be made pursuant to this Paragraph 8(b) if the amendment adversely
affects the rights of any Participant or Beneficiary under this Agreement.
(c) At any time and from time to time, the provisions of Section 4
(relating to the management of the assets of the Trust) may be amended if the
amendment is approved in writing by the Company, by the Trustee, by the
Representative of Currently Employed Participants, and by the Representative of
all other Eligible Participants and Current Beneficiaries (as identified
pursuant to Paragraph 8(f)), except that no amendment may be made pursuant to
this Paragraph 8(c) if the amendment adversely affects the rights of any
Participant or Beneficiary under this Agreement.
(d) At any time and from time to time, this Agreement may be amended in
any respect (except that no amendment shall be made that would make the Trust
revocable or change the manner in which amendments may be adopted), provided
the Company first provides full and complete disclosure to all Eligible
Participants and Current Beneficiaries of the effect of such amendment on each
of them and the amendment is thereafter approved in writing by the Company, by
the Trustee, and by all persons who, at the time of the amendment, are either
Eligible Participants or Current Beneficiaries.
(e) For purposes of Paragraph 8(b), an amendment will be deemed to
be approved in writing "by the Pre-Change in Control Board" if the amendment is
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16
approved in writing by a majority of the class of individuals who (i) were
members of the Board of Directors of the Company as constituted 30 days before
the first date on which there occurs a Change in Control of the Company (as
defined in Paragraph 8(g)), and (ii) are living at the time of the amendment.
(f) For purposes of Paragraph 8(b) and Paragraphs 8(c), the
"Representative of Currently Employed Participants" shall be such individual who
may be designated from time to time by at least a majority in number of the
class of persons comprised of all of the Participants who at that time are
employed by the Company, and the "Representative of all other Participants and
Beneficiaries" shall be such individual who may be designated from time to time
by at least a majority in number of the class of persons comprised of all other
Eligible Participants and all Current Beneficiaries. If at any time no such
individual has been so designated by a majority in number of the members of one
or the other of these classes, the resulting vacancy shall preclude amendment of
this Agreement under Paragraph 8(b) or Paragraph 8(c) until after the vacancy is
filled.
(g) For purposes of this Agreement, a Change in Control of the Company
shall have occurred if at any time any of the following events occurs:
(i) 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;
(ii) 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;
(iii) 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
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17
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;
(iv) 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
(v) 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.
Section 9. TERMINATION.
(a) This Trust shall terminate as of the first date on which there is no
Participant or Beneficiary who is entitled on that date, or may become entitled
in the future, to the payment of any Benefits under any of the Plans.
(b) This Trust may be terminated before the date specified in Paragraph
9(a) if the Company, the Trustee, all Eligible Participants, and all Current
Beneficiaries consent in writing to the termination following receipt of full
and complete disclosure by the Company to the Trustee, to all Eligible
Participants, and to all Current Beneficiaries of the effect of such termination
on each of them.
(c) Upon termination of the Trust provided for in Paragraph 9(a) or in
Paragraph 9(b), the Trustee shall pay over any assets remaining in the Trust as
follows:
(i) if, and to the extent, at the time of the termination, Trust
II is not "Fully Funded," as that term is defined in Agreement II, the Trustee
shall pay such assets to the trustee of Trust II as contributions on behalf of
the Company to the separate accounts maintained in Trust II in the same manner
as is specified in Paragraph 6(a) of this Agreement; and
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18
(ii) if, and to the extent, at the time of termination, Trust II
is so Fully Funded (or has been terminated), the Trustee shall pay such assets
to the Company.
Section 10. INTERPRETATION. The construction and validity of this
instrument shall be determined under the laws of the State of Ohio in a manner
consistent with the expressions of intent contained in the foregoing provisions
and with the Plans.
IN WITNESS WHEREOF, the Trustee and the Company have executed this
instrument, in duplicate, at Cleveland, Ohio, on the date first above written.
OGLEBAY NORTON COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
VICE PRESIDENT
And /s/ H. Xxxxxxx Xxx
------------------------------
VICE PRESIDENT
GRANTOR
BANK ONE, CLEVELAND, NA
By [Illegible]
-------------------------------
And [Illegible]
------------------------------
TRUSTEE
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Schedule A
The following described property has been transferred and delivered to
the Trustee to be held and administered in accordance with the foregoing
Irrevocable Trust Agreement:
DESCRIPTION OF PROPERTY
initial deposit:
principal cash in the amount of
one hundred dollars ($100.00)
Acknowledged;
BANK ONE, CLEVELAND, NA, TRUSTEE
By /s/ Xxxx X. Xxxxxx, Trust Officer
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Schedule B
PLAN OR PLANS WITH RESPECT
TO WHICH INDIVIDUAL IS
NAME OF INDIVIDUAL OR MAY BECOME A PARTICIPANT
------------------
__
X.X. Xxxxx |
X.X. Xxxxxx |
X.X. Xxxxxx |
X. Xxxxxxxxx, Xx. |- 1974 Supplemental Retirement Plan
X.X. Xxxx |
K.S. Xxxxxx |
F.R. White, Jr. __|
__
X.X. Xxxxxxxx | __
M.A. Xxxx | |
X.X. Xxxx | | 1982 Salary Continuation
X.Xxxxxxxx | | Arrangements
F.A. Castle | | 1982 Disability Benefit
X.X. Xxx |- -| Arrangements
X.X. Xxxxx | | 1986 Death Benefit
X.X. Xxxxxxx | | Arrangements
X.X. Xxxxx | |__
X.X. Xxxxxxxx |
X.X. Xxxxxx |
X. Xxxxx |
D. Xxxxx Xxxxxxxx |
Xxxxxx X. Xxxxxx |
__|
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