EXHIBIT 10.3
AMENDMENT
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TO
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EMPLOYMENT AGREEMENT
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THIS AMENDMENT TO EMPLOYMENT AGREEMENT is entered into on this 30th
day of June, 2000, by and between OGLEBAY NORTON COMPANY, a Delaware
corporation ("Oglebay"), and XXXX X. XXXXX ("Xxxxx").
WHEREAS, Oglebay and Xxxxx have entered into a certain Employment
Agreement (the "Agreement"), dated December 17, 1997, setting forth certain
terms and conditions relating to the engagement and employment of Xxxxx as the
President and Chief Executive Officer of Oglebay; and
WHEREAS, Oglebay and Xxxxx desire to amend the Agreement to provide
certain additional remuneration to Xxxxx subject to the terms and conditions as
further set forth herein;
NOW, THEREFORE, Oglebay and Xxxxx hereby agree to amend the Agreement
by adding thereto a new provision as Section 6.4 thereof to provide as follows:
6.4 Excise Tax Gross-Up Upon Termination by Xxxxx after a Change of
Control.
(a) In the event any payment or distribution by Oglebay or other
amount with respect to Oglebay to or for the benefit of Xxxxx, 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 Section 6.4 (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 Xxxxx with respect to the excise tax imposed by
Section 4999 of the Code with respect to Oglebay (the excise tax, together
with any interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), Xxxxx shall be entitled to receive an additional cash
payment (an "Excise Tax Gross-Up Payment") from Oglebay in an amount equal
to the sum of the Excise Tax and an amount sufficient to pay the cumulative
Excise Tax, all cumulative income taxes (including any interest and
penalties imposed with respect to such taxes) relating to the Excise Tax
Gross-Up Payment, and any other taxes of an extraordinary or penalty nature
which may arise as a result of the Excise Tax Gross-Up Payment that are not
avoidable by the exercise of reasonable diligence by Xxxxx so that the net
amount retained by Xxxxx 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) and less any other taxes of an extraordinary or penalty
nature the imposition of which are avoidable by the exercise of reasonable
diligence on the part of Xxxxx.
(b) All determinations required to be made under this Section 6.4,
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 certified
public accounting firm designated by Xxxxx (the "Accounting Firm") which
shall provide detailed supporting calculations both to Oglebay and Xxxxx
within 30 days after the receipt of notice from Xxxxx that there has been a
Payment, or such earlier time as is requested by Oglebay. 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 of Control, Xxxxx shall appoint another 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 Oglebay. Any Excise Tax Gross-Up Payment, as determined in
accordance with this Section 6.4, shall be paid by Oglebay to Xxxxx within
five days after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by Xxxxx, it shall
so indicate to Xxxxx in writing. Any determination by the Accounting Firm
shall be binding upon Oglebay and Xxxxx. 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 Oglebay should have made will not have been made (an
"Underpayment"), consistent with the calculations required to be made
hereunder. In the event Xxxxx 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 Oglebay to or
for the benefit of Xxxxx.
(c) Xxxxx shall notify Oglebay 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 Oglebay (an "Excise Tax
Claim"). The notification shall be given as soon as practicable after Xxxxx
is informed in writing of the Excise Tax Claim and shall apprise Oglebay of
the nature of the claim and the date on which the claim is requested to be
paid. Xxxxx shall not pay the claim prior to the expiration of the 30-day
period following the date on which Xxxxx gives notice to Oglebay or any
shorter period ending on the date that any payment of taxes with respect to
the claim is due. If Oglebay notifies Xxxxx in writing prior to the
expiration of the 30-day period that it desires to contest the claim, Xxxxx
shall:
(i) give Oglebay any information reasonably requested by
Oglebay relating to the Excise Tax Claim;
(ii) take any action in connection with contesting the Excise
Tax Claim as he shall determine or Oglebay shall reasonably request in
writing after consulting with Xxxxx, provided that any legal
representation shall be by an attorney selected by Xxxxx; and
(iii) cooperate with Oglebay in good faith in order effectively
to contest the Excise Tax Claim.
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Oglebay shall take any and all actions as Xxxxx shall reasonably determine
are necessary or advisable to effectively contest the Excise Tax Claim.
Oglebay 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 Xxxxx 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. If Xxxxx determines to pay the Excise Tax Claim and xxx for a
refund, Oglebay shall advance the amount of payment to Xxxxx, on an
interest-free basis, and shall indemnify and hold Xxxxx 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 Xxxxx with respect to which the contested amount is
claimed to be due shall be limited solely to the contested amount.
Oglebay's consultations relating to the contest shall be limited to issues
with respect to which an Excise Tax Gross-Up Payment would be payable
hereunder and Xxxxx 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 Xxxxx of an amount advanced by Oglebay
pursuant to Section 6.4(c), Xxxxx becomes entitled to receive any refund
with respect to the claim, Xxxxx shall, subject to Oglebay's compliance
with the requirements of Section 6.4(c), promptly pay to Oglebay the amount
of the refund to the extent related to the Excise Tax (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Xxxxx of an amount advanced by Oglebay pursuant to
Section 6.4(c), a determination is made that Xxxxx shall not be entitled to
any refund with respect to the claim and Xxxxx does not determine to
contest the denial of refund, 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.
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IN WITNESS WHEREOF, Oglebay and Xxxxx have executed this Agreement,
Oglebay by the duly authorized Chairman of the Compensation, Organization and
Governance Committee of its Board of Directors, as of the date first written
above.
OGLEBAY NORTON COMPANY
By /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx, Chairman,
Compensation, Organization and
Governance Committee
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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