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Exhibit 10.G
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into this 28th day of
June, 1995, to be effective as of the 1st day of April, 1995, by and between
OGLEBAY NORTON COMPANY, a Delaware corporation (the "Company"), and R. XXXXXX
XXXXX, XX., ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for many years served the Company in
many different capacities, each with increasing responsibility and increasing
importance to the Company, and has fully, ably, and responsibly discharged the
duties of his various positions with the Company; and
WHEREAS, the Board of Directors of the Company (the "Board")
has determined that it would be in the best interests of the Company and its
shareholders to have the Company enter into this Employment Agreement with
Employee to secure his services as Chairman of the Board, President and Chief
Executive Officer of the Company;
NOW, THEREFORE, the Company and Employee agree as follows;
1. EMPLOYMENT, CONTRACT PERIOD.
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(a) During the period specified in Paragraph
1(b), the Company shall employ Employee, and Employee shall serve the
Company, as Chairman of the Board, President and Chief Executive
Officer of the Company on the terms and subject to the conditions set
forth herein.
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(b) The term of Employee's employment hereunder
shall commence on April 1, 1995 (the "Effective Date") and, subject to
prior termination as provided in Paragraph 6 hereof, shall continue
for three years until March 31, 1998. The term of Employee's
employment hereunder is sometimes hereinafter referred to as the
"Contract Period".
2. POSITION, DUTIES, RESPONSIBILITIES. At all times
during the Contract Period, Employee shall:
(a) Hold the position and have the duties and
responsibilities of Chairman of the Board, President and Chief
Executive Officer of the Company as those duties and responsibilities
have been understood by the executive officers of the Company and by
its Board through the Effective Date and as those duties and
responsibilities may be defined and extended, from time to time after
the Effective Date, 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 policies applicable to
executive officers of the Company;
(d) Devote his business time, energy, and talent
to the business of and to the furtherance of the purposes and
objectives of the Company to generally the same extent as he has so
devoted his business time, energy, and talent as an officer of the
Company before the Effective Date, and neither directly
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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; and
(e) Serve as a Director of the Company and as a
member of any Board committees determined by the Board, upon the same
terms and conditions as any other employee of the Company who
also serves as a Director.
Nothing in this Agreement shall preclude Employee from devoting reasonable
periods of time to charitable and community activities, to serve as a director
on the boards of other companies, with the concurrence of the Compensation and
Organization Committee of the Board of Directors, or the management of his
investment assets provided such activities do not materially interfere with the
performance by Employee of his duties hereunder.
3. COMPENSATION. For services actually rendered by
Employee on behalf of the Company during the Contract Period as contemplated by
this Agreement the Company shall pay to Employee: (a) a base salary at the
rate of $276,600 per year or such greater amount as the Board, upon
recommendation of the Compensation and Organization Committee, may determine;
and, (b) the variable pay portion of Employee's compensation under the
Company's Pay for Performance Plan ("PMP"), or such substitute plan or
arrangement as the Company may adopt during the Contract Period. The base
salary shall be paid to Employee in the same increments and on the same
schedule each month as in effect for Employee's base salary as an officer of
the Company
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on the Effective Date. Employee shall not be entitled to any base salary
during any period when he is receiving long-term disability benefits under the
Disability Benefit Arrangement provided to Employee by the Company.
4. VACATION. Employee will be entitled to such periods
of vacation and sick leave allowance each year as are determined by the
Company's vacation and sick leave policy for executive officers as in effect on
the Effective 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.
5. OTHER COMPANY PLANS, BENEFITS, AND PERQUISITES.
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(a) Employee shall be entitled to participate in
the Company's Pension Plan for Salaried Employees; the unfunded excess
benefit plan maintained in conjunction with the Salaried Plan; the
Salary Continuation Arrangement; the Disability Benefit Arrangement;
his Executive Life Program Agreement with the Company; the
post-retirement Death Benefit Arrangement; the Incentive Savings Plan;
the 1983 Stock Equivalent Plan; and every other employee benefit plan
not specifically referred to in this Agreement that is generally
available to executive officers of the Company at any time during the
Contract Period. Employee's participation in and benefits under any
such plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan which
terms and conditions shall not be
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amended during the Contract Period unless the benefits to Employee are
at least as great under the plan as amended (or under a substitute
plan or arrangement) as were the benefits under the plan as in effect
on the Effective Date. The Company will also provide Employee with
such perquisites as the Company has customarily provided to its top
executive officers.
(b) The Company shall maintain a membership in
The Pepper Pike Club for Employee. Employee shall solely use the
membership for business purposes of the Company, including such use as
is consistent with the customary duties and responsibilities of
persons holding the office of Chairman of the Board, President and
Chief Executive Officer of a publicly traded corporation.
6. TERMINATION.
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(a) Employee's employment hereunder will
terminate without further notice upon the death of Employee.
(b) The Company may terminate Employee's
employment hereunder effective immediately upon giving notice of such
termination;
(i) For "cause," (A) If Employee commits an
act of fraud, embezzlement, theft, or other similar criminal act
constituting a felony and involving the Company's business or (B) if
Employee breaches his agreement with respect to the time to be devoted
to the business of the Company set forth in Paragraph 2(d) hereof and
fails to cure such breach within 30 days of receipt of written
notice of such breach from the Board; or
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(ii) Upon disability, if Employee is
prevented from performing his duties hereunder by reason of physical or mental
incapacity for a period of 180 consecutive days.
(c) Employee may terminate his 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 aggregate direct
remuneration, position, 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; or
(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, Employee is unable to carry out
the responsibilities and duties contemplated for
Employee under this Agreement.
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7. SEVERANCE COMPENSATION.
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(a) If Employee's employment is terminated before
March 31, 1998 by the Company without cause or by Employee for good
reason, then, except as provided in Paragraph 7(b), 7(c), 7(d), or
7(e), the Company shall pay and provide to Employee the following
compensation and benefits through March 31, 1998:
(i) Base salary at the highest monthly
rate payable to Employee during the Contract Period, to be paid at the times
provided in Paragraph 3 hereof;
(ii) Coverage under the Company's medical
insurance plan, short-term disability plan, and long-term disability plan,
Salary Continuation Arrangement, Disability Benefit Arrangement,
Executive Life Program Agreement, and post-retirement Death Benefit
Arrangement, each as in effect on the Effective Date (or, if
terminated and replaced by a successor plan or benefit arrangement, as
so provided in such successor plan or benefit arrangement or, if
subsequently amended to increase benefits to Employee or his
dependents, as so amended) and each as if Employee's employment
had continued through March 31, 1998; and
(iii) Coverage under the Company's unfunded
excess benefit plan as if Employee's employment had continued through March 31,
1998.
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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 employment, the Company shall directly provide the full
equivalent of such benefits to Employee.
(b) If Employee becomes entitled to compensation
and benefits pursuant to Paragraph 7(a) he shall use reasonable
efforts to seek other employment, provided, however, that he shall not
be required to accept a position of less importance and dignity or of
substantially different character than that of Chairman of the Board,
President and Chief Executive Officer of the Company or a position
that would require Employee to engage in activity in violation of
Employee's agreement with respect to noncompetition set forth in
Paragraph 9 hereof nor shall he be required to accept a position
outside the Greater Cleveland area. The Company's obligations under
items (i) and (ii) of Paragraph 7(a) will be offset by payments and
benefits received by Employee from another employer to the following
extent:
(i) The Company's obligation to pay any
particular installment of base salary following Employee's
termination will be offset, on a dollar for dollar basis, by any
cash compensation received by Employee from another employer
before the date on which the installment of base salary is
payable by the Company.
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(ii) To the extent that Employee is
provided medical, dental, short-term or long-term disability income protection,
or life insurance benefits by another employer during any period, the Company
will be relieved to such extent of its obligation to provide such benefits to
Employee. For example, if a new
employer provides Employee with a medical benefits plan that pays
$500.00 for a specific claim made by Employee and the Company's
medical insurance plan would have paid $750.00 for that claim,
then the Company will be obligated to pay Employee $250.00 with
respect to that claim.
Other than as provided in this Paragraph 7(b) 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 from the Company under Paragraph 7(a);
(i) Employee materially and willfully
breaches his agreement with respect to confidential information
set forth in Paragraph 8 hereof and such breach directly causes
the Company substantial and demonstrable damage; or
(ii) Employee materially and willfully
breaches his agreement with respect to non-competition set forth
in Paragraph 9 hereof and such breach directly causes the Company
substantial and demonstrable damage;
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then the Company will be relieved of its obligations under Paragraph
7(a) hereof as of the first day of the month immediately following the
date of such material breach.
(d) If Employee dies during any period in which
he is entitled to payments or benefits from the Company under
Paragraph 7(a), the Company will be relieved of its obligations under
item (i) of Paragraph 7(a) and the Company will provide to Employee's
beneficiaries and dependents death benefits and continuing medical and
dental benefits to the same extent as if Employee's death had occurred
while Employee was in the active employ of the Company.
(e) If at any time Employee becomes entitled to
payments or benefits from the Company both under Paragraph 7(a) of
this Agreement and under any provision of the "Change-in-Control
Agreement" (defined and amended by Paragraph 10, below), Employee
shall be entitled to receive, with respect to each category of
payments and benefits, all of the payments and benefits provided for
under that agreement (either this Agreement or the Change-in-Control
Agreement) that is most favorable to Employee but Employee shall
not be entitled to a double payment with respect to any calendar
period.
8. CONFIDENTIAL INFORMATION. Employee agrees
that he 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 that Employee may
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acquire in the performance of Employee's duties hereunder. Upon the
termination of Employee's employment with the Company, Employee agrees to
deliver forthwith to the Company any and all literature, documents,
correspondence, and other materials and records furnished to or acquired by
Employee during the course of such employment.
9. NONCOMPETITION. During any period in which Employee is
receiving base salary under this Agreement (whether during the Contract Period
pursuant to Paragraph 3 or following termination pursuant to Paragraph 7(a))
and for a period of one year after Employee last receives base salary under
this Agreement, Employee shall not act as a proprietor, investor, director,
officer, employee, substantial stockholder, consultant, or partner in any
business engaged to a material extent in direct competition with the Company in
any market in any line of business engaged in by the Company during the
Contract Period.
10. CHANGE-IN-CONTROL AGREEMENT. The Company and
Employee are parties to another employment agreement (intended to become
effective upon a change of control of the Company) entered into in 1987 by and
between the Company and Employee (as amended to date, as amended in the
remainder of this Paragraph 10, and as may be amended from time to time by the
Company and Employee, the "Change-in-Control Agreement"). The
Change-in-Control Agreement is hereby amended by substituting for the original
Paragraph 20 thereof (captioned "Limitation on Contingent Payments") a new
Paragraph 20 to read in its entirety, with its caption, as follows:
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"20. EXCISE TAX. As to the Company's obligation if
any of the payments or benefits to be paid and provided to Employee by
the Company under any provision of this Agreement or any portion of
any such payment or benefits would constitute "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor provision, see
Paragraph 12 of the Employment Agreement between Employee and the
Company pursuant to which Employee is employed as Chairman of the
Board, President and Chief Executive Officer effective April 1, 1995."
Except for the prohibition of double payments contained in Paragraph 7(e),
above, nothing in this Agreement shall limit Employee's rights under the
Change-in-Control Agreement.
11. COSTS OF ENFORCEMENT. The Company shall pay and be
solely responsible for any and all costs and expenses (including attorneys's
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
Company terminated Employee for cause (as determined under Paragraph 6(b)(i)
hereof), (b) Employee voluntarily terminated his employment other than for good
reason (as determined under Paragraph 6(c)(ii) hereof), or (c) Employee
materially and willfully breached his agreement not to compete with the Company
or his agreement with respect to confidential information and such breach
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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 11, 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 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxx, 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.
12. EXCISE TAX. If any of the payments or benefits to be
paid and provided to Employee by the Company under any provision of this
Agreement, under any provision of the Change-in-Control Agreement, or under any
provision of any other
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agreement, plan, or arrangement, or any portion of any such payment or benefits
would constitute "excess parachute payments" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision, the Company shall make additional cash payments to Employee at the
same times as any such payment or benefit constituting an excess parachute
payment is paid or provided and in such amounts as are necessary to put
Employee in the same position after payment of all federal, state, and local
taxes (whether income taxes, excise taxes under Section 4999 of the Code or
otherwise, or other taxes) as he would have been in after payment of all
federal, state, and local income taxes if the payments or benefits had been
subject only to federal, state, and local income taxes generally applicable to
compensation income. For example, if a $100,000 payment to Employee
constituted an excess parachute payment subject to a 20% excise tax under
Section 4999 of the Code, as well as federal income tax at a 28% effective
rate, state income tax at a 10% marginal rate, and local income tax at a 2%
marginal rate and no other taxes, and the state and local taxes were deductible
for federal income tax purposes, the Company would be required to pay to
Employee an additional $46,748 with respect to the $100,000 excess parachute
payment. The net amount available to Employee after all taxes, including the
excise tax on both the $100,000 and the $46,748, would be $63,630, the same
amount that would be available to Employee had the $100,000 payment been
subject only to federal, state, and local income taxes.
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13. 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: Secretary) at its principal executive office and to
Employee at his 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.
14. ASSIGNMENT, BINDING EFFECT.
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(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 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
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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.
15. INVALID PROVISIONS.
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(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.
16. ENTIRE AGREEMENT, MODIFICATION. Except for the
Change-in-Control Agreement, this Agreement contains the entire agreement
between the parties with respect to the employment of Employee by the Company
and supersedes all prior and contemporaneous agreements, representations, and
understandings of the parties. 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.
17. 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
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or the right of either party thereafter to enforce each and every provision of
this Agreement in accordance with the terms hereof.
18. GOVERNING LAW. This Agreement has been made in and
shall be governed and construed in accordance with the laws of the State of
Ohio.
IN WITNESS WHEREOF, the Company and Employee have executed
this Agreement as of the day and year first above written.
Attest: OGLEBAY NORTON COMPANY
____________________________ By:______________________________
XXXXX X. XXXXXX H. XXXXXXX XXX
Secretary Vice President-Administrative
and Legal Affairs
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R. XXXXXX XXXXX, XX.
