1
Exhibit 10 (1)
IRREVOCABLE TRUST AGREEMENT II
------------------------------
(For Employment Agreements and Certain Retirement Benefits)
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 has adopted certain benefit plans and entered into
certain employment agreements, described in greater detail on the attached
Schedule A (these benefit plans and employment agreements are sometimes
hereinafter referred to collectively as the "Plans" and individually as a
"Plan") for the benefit of certain of its executives whose names are listed on
the attached Schedule B (the executives whose names are listed on the attached
Schedule B are hereinafter sometimes referred to collectively as the
"Participants" and individually as a "Participant"), and each such Plan provides
for payment of certain amounts in specified circumstances to a Participant
and/or to the beneficiary under a Plan of a Participant (the benefits payable
under the Plans that are listed on the attached Schedule C are herein referred
to as "Benefits" and the beneficiary or beneficiaries under a Plan of a
Participant 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;
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
2
Schedule D, 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 1J 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. 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
- 2 -
3
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 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, the amount of each such
payment, and, in the case of each Beneficiary, the name of the Participant with
respect to whom the Benefits are payable to the Beneficiary. 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 from the assets held in the trust in the
separate account (maintained pursuant to Paragraph 4(e)) for the Participant to
whom or with respect to whom the Benefit is payable (hereinafter referred to as
a "Participant's Separate Account"). 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
- 3 -
4
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 became 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, from the
Participant's Separate Account, an amount equal to the amount of Benefits that
are so acknowledged by the Company to be overdue plus interest thereon as
provided in Paragraph 2(i). 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 in a
Participant's Separate Account is included by the Internal Revenue Service in
the gross income of the Participant with respect to whom that Separate Account
is maintained or of a Beneficiary of the Participant before actual distribution
of the amount to the Participant or Beneficiary, the Trustee shall make a
distribution out of assets held in that Separate Account only, 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
- 4 -
5
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 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
- 5 -
6
acquittance to the Trustee, and to the Company, for the amount so distributed
and its proper application.
(h) 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.
(i) The Company may from time to time add one or more additional
Plans to the list of Plans covered by this Agreement by delivering to the
Trustee an addendum to Schedule A and the Company may from time to time add one
or more additional Participants to the list of individuals covered by this
Agreement by delivering to the Trustee an addendum to Schedule B.
(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.
(k) The Trustee shall pay Benefits to a Participant or to a
Participant's Beneficiary only from assets held in that Participant's Separate
Account.
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
- 6 -
7
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.
(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
- 7 -
8
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.
(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,
operate, manage, 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
- 8 -
9
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 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 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.
(e) 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
- 9 -
10
such claims are in litigation, upon such terms and conditions as the Trustee
shall deem advisable.
(f) The Trustee shall maintain a separate account within the Trust (a
"Separate Account") with respect to each Participant. The Trustee shall credit
or debit each Participant's Separate Account as appropriate to reflect that
Participant's allocable portion of the Trust assets, as those assets may be
adjusted from time to time pursuant to the terms of this Agreement. All deposits
of principal to the Trust by the Company shall be allocated among the various
Separate Accounts as designated by the Company at the time the deposit is made.
The Trustee is authorized to segregate and hold separately any part or all of
the trust property from time to time allocable to the Separate Accounts then
existing or to hold any part or all of the trust property as a single commingled
fund and allocate undivided interests in the same among the Separate Accounts
then existing.
(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 (i) to the Company 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, and (ii) to each surviving Participant or
Current Beneficiary with respect to a deceased Participant, a report containing
(A) a summary of the information provided to the Company pursuant to clause (i)
of this Paragraph (f), (B) a detailed description of all transactions affecting
the Participant's Separate Account, and (C) unless the report delivered to the
then surviving Participant or Current Beneficiary is identical to the report
delivered to the Company pursuant to clause (i) of this Paragraph (f), a
statement that the surviving
- 10 -
11
Participant or Current Beneficiary may inspect that report, either directly or
by a duly authorized representative, at any reasonable time.
(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 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,
- 11 -
12
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 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 (and against each of
the Separate Accounts in direct proportion to the value of the assets held in
each Separate Account during the period for which the fees are payable) 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
▇▇▇▇▇ 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 present value of the maximum future Benefits that could become payable with
respect to any one or more Participants under all of the Plans. The Company
shall pay the fees and expenses of such independent actuary and such fees and
expenses shall not be paid by the Trustee or charged against Trust assets. The
independent actuary shall make its calculations based on the assumption that
each Participant's employment with the
- 12 -
13
Company will terminate under such circumstances and on such date as will
maximize the aggregate cost to the Company of providing all Benefits due with
respect to the Participant under the Plans. In addition, the independent actuary
shall use the 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
independent actuary determines that the value of all assets described in one of
clauses (i) through (v) of Paragraph 4(b) hereof ("Specified Assets") held in
the Trust with respect to any Participant (with respect to whom no payments of
Benefits are overdue) exceeds 150% of the present value of the maximum future
Benefits that could become payable under all of the Plans with respect to the
Participant, then that Participant's Separate Account will be deemed to be
"Fully Funded" and the Trustee shall take the amount of any assets in excess of
the 150% amount of Specified Assets from that Separate Account and reallocate
that excess to all of the other Separate Accounts that are not, at that time,
Fully Funded, spreading the excess among those other Separate Accounts in direct
proportion to the aggregate amounts theretofore contributed by the Company to
each of such other Separate Accounts. If the independent actuary determines that
all Separate Accounts are Fully Funded, the Trustee shall retain Specified
Assets that in the aggregate are at least equal to 150% of the present value of
the maximum future Benefits that could become payable under all of the Plans
with respect to all Participants 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 I") established by the Company under the agreement with Bank One,
Cleveland, NA, as trustee, captioned "Irrevocable Trust Agreement (Salary
Continuation, Disability, and Death Benefit Arrangements, and Prior Supplemental
Retirement Plan)," dated ____________, 1989 ("Agreement I"), is not then "Fully
Funded," as that term is defined in Agreement I, then the Trustee shall transfer
the Excess Assets to the trustee of Trust I as contributions on behalf of the
Company to Trust I; and
(b) if, and to the extent, at the time of the request, Trust I
is so Fully Funded (or has been terminated), then the Trustee shall pay the
Excess Assets to the Company.
Section 7. PROTECTION OF TRUSTEE. The Company, by making contributions
to the trust property,
- 13 -
14
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 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.
- 14 -
15
(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
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.
- 15 -
16
(g) For purposes of this Agreement, an Change in Control 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-l (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 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
- 16 -
17
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
I is not "Fully Funded," as that term is defined in Agreement I, the Trustee
shall pay such assets to the trustee of Trust I as contributions on behalf of
the Company to Trust I; and
(ii) if, and to the extent, at the time of termination, Trust I
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.
- 17 -
18
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ VICE PRESIDENT
_____________________________________
And /s/ H. ▇▇▇▇▇▇▇ ▇▇▇ VICE PRESIDENT
_________________________________
GRANTOR
BANK ONE, CLEVELAND, NA
By /s/ [Illegible]
____________________________
And /s/ [Illegible]
____________________________
TRUSTEE
-18-
19
Revised and Restated
Schedule A
(as revised August 31, 1994)
BENEFIT PLANS AND EMPLOYMENT AGREEMENTS
1. Excess and TRA Supplemental Benefit Retirement Plan, adopted November 16,
1977, as amended and restated effective January 1, 1991, and any subsequent
amendments thereto.
2. Supplemental Savings and Stock Ownership Plan, adopted May 31, 1989, and
any subsequent amendments thereto.
3. 1983 Stock Equivalent Plan, adopted May 18, 1983.
4. Employment Agreement with ▇. ▇. ▇▇▇▇▇▇▇▇.
5. Employment Agreements and the amendments thereto, if any (intended to
become effective upon a change in control) with F. A. Castle, ▇. ▇. ▇▇▇▇▇,
▇. ▇. ▇▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇▇▇, M. A. ▇▇▇▇,
▇. ▇. ▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇, ▇. ▇. ▇▇▇, and ▇. ▇▇▇▇.
6. Employment Agreement with R. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. entered into as of
February 26, 1992.
7. Employment Agreements (intended to become effective upon a change in
control) with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
20
ADDENDUM TO SCHEDULE A
(August 31, 1994)
6. Employment Agreement with R. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. entered into as of February
26, 1992.
7. Employment Agreements (intended to become effective upon a change in
control) with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
21
Revised and Restated
Schedule B
(revised as of August 31, 1994)
PARTICIPANTS
▇. ▇. ▇▇▇▇▇▇▇▇
F. A. Castle
▇. ▇. ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇
M. A. ▇▇▇▇
▇. ▇. ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇
E. Pruc
▇. ▇. ▇▇▇▇▇
E. G. ▇▇▇▇▇▇
22
ADDENDUM TO SCHEDULE B
(August 31, 1994)
▇. ▇. ▇▇▇▇▇
E. G. ▇▇▇▇▇▇
23
Revised and Restated
Schedule C
(revised as of August 31, 1994)
l. With respect to the Excess and TRA Supplemental Benefit Retirement Plan,
adopted November 16, 1977, as amended and restated effective January 1,
1991, and any subsequent amendments thereto: All benefits.
2. With respect to the Supplemental Savings and Stock Ownership Plan, adopted
May 31, 1989, and any subsequent amendments thereto: All benefits.
3. With respect to the 1983 Stock Equivalent Plan, adopted May 18, 1983:
All benefits.
4. With respect to the Employment Agreements with ▇. ▇. ▇▇▇▇▇▇▇▇ and R. ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇. and the Employment Agreements and the amendments thereto, if any
(intended to become effective upon a change in control) with F. A. Castle,
▇. ▇. ▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇▇▇,
M. A. ▇▇▇▇, ▇. ▇. ▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇, ▇. ▇. ▇▇▇, ▇. ▇▇▇▇, ▇. ▇. ▇▇▇▇▇ and
E. G. ▇▇▇▇▇▇.
5. All amounts payable by the Company to or with respect to a Participant
after the termination of the Participant's employment with the Company.
6. With respect to the 1991 Executive Life Program: All benefits.
24
ADDENDUM TO SCHEDULE C
(August 31 , 1994)
5. All amounts payable by the Company to or with respect to a Participant
after the termination of the Participant's employment with the Company.
6. With respect to the 1991 Executive Life Program: All benefits.
25
Schedule D
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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, Trust Officer
- 22 -
