Exhibit 10(b)

 

SEPARATION AGREEMENT AND RELEASE

 

THIS SEPARATION AGREEMENT AND RELEASE is entered into at Cleveland, Ohio this
12th day of December, 2002, by and among OGLEBAY NORTON MANAGEMENT COMPANY (the
“Management Company”), an Ohio corporation. OGLEBAY NORTON COMPANY (“ONCO”), an
Ohio corporation, and Kenneth P. Pavlich (“Employee”).

 

RECITALS:

 

A.    Management Company is a wholly owned subsidiary of ONCO formed for the
sole purpose of acting as the employer of management personnel for ONCO.
Management Company is hereafter referred to as the “Company.”

 

B.    The Company is engaged in pertinent part in the mining of industrial
sands, mica, and the processing, sales, and marketing of same for use in
construction materials, ceramics and glass, energy, plastics, and other related
industries within the United States (the “Business”).

 

C.    Employee has been employed in a key management position by the Company in
the Business since 1997.

 

D.    The Company has decided to eliminate the position held by Employee and
desires to make special severance provisions for the benefit of Employee.

 

NOW, THEREFORE, in consideration of mutual promises and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:

 

1.    Resignation. The Company hereby agrees to continue to employ Employee
until December 31, 2002, (the “Separation Date”) upon the same terms and

 

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conditions as he is currently employed; however, Employee shall resign as an
officer of ONCO and each affiliate thereof for which he currently serves as an
officer effective October 31, 2002.

 

2.    Compensation.

 

2.1    Separation Payment.

 

(a)    Provided Employee does not breach this Agreement, the Company shall pay
to Employee, or in the event Employee dies prior to the fulfillment of Company’s
obligations hereunder, to Employee’s spouse, or in the event Employee’s spouse
is deceased, to Employee’s estate, Separation Pay of $5,780 bi-weekly commencing
with the first pay period ending after December31, 2002 and continuing through
the bi-weekly pay period ending on or immediately after December31, 2004.

 

(b)    In the event of a breach of this Agreement by Employee, Company’s
obligations hereunder shall immediately cease.

 

2.2    Certain Basic Fringe Benefits. The Company shall provide to Employee the
following extra benefits:

 

(a)    continuation of the Company provided variable life insurance policy paid
for by the Company through the policy year ending in 2005 in the same manner as
that payment is currently made to Employee (In 2002, such amount was$8,696.66
per year, after gross-up);

 

(b)    health and welfare benefits, that are provided to its key employees and
on the same terms and conditions, as may be applicable to such employees so long
as the Company is obligated to pay Separation Pay to the Employee pursuant to
Section 2.1(a)above (in the event Employee dies prior to the fulfillment of
Company’s obligations

 

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hereunder, Employee’s spouse and family shall continue to receive such
benefits); Company and Employee agree that COBRA coverage commences on January
1, 2003, although the Company is paying the cost of benefits provided for there
under and shall not be extended by anything contained herein;

 

(c)    Employee shall be entitled to receive all retirement benefits to which he
is entitled pursuant to his current employment on the terms and pursuant to the
provisions of such benefit plans and elections Employee has made or will make
upon separation, including without limitation, benefits under the Oglebay Norton
Company Salaried Pension Plan and related SERP, the Oglebay Norton Company
incentive Savings Plan and related SERP, and the Oglebay Norton Capital
Accumulation Plan; and

 

(d)    Upon execution of this agreement, Company shall pay Employee a one-time,
lump sum payment of $30,000 in lieu of paying for Outplacement Services.

 

2.3    Incentive Compensation. Employee shall continue to be entitled to
participate in the Company’s Annual Incentive Plan for the year 2002; however,
he shall not be entitled to participate in such plan or receive an incentive
bonus from the Company for any time thereafter. Pursuant to such Annual
Incentive Plan, Employee may receive a bonus for 2002, if, and only if, the
performance objectives and other criteria set forth in the program are met by
the Company. Employee shall also be entitled to continue to be a participant in
the Oglebay Norton Company 1999 Long-Term Incentive Plan (the “LTIP”) for the
purpose of the cash incentive payment to the extent he would have been entitled
to a cash payment under the LTIP had he not entered into this Agreement and
instead had remained employed in his capacity as an officer of the Company until
December 31, 2002. Subject to the approval of the Company’s Compensation,
Organization and Governance

 

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Committee of the Board of Directors, which the Company hereby agrees to request,
Stock options issued to Employee pursuant to the 1999 LTIP, which are not vested
as of the date hereof shall be vested effective on the Separation Date and shall
be fully exercisable until December 31, 2005. Employee shall also be entitled to
continue as a participant in the Oglebay Norton Company 2002 Long Term Incentive
Plan for 2002 only to the extent he would have been entitled had he not entered
into this agreement and remained employed as an officer of the Company until
December 31, 2002. In the event of Employee’s death prior to payment of any
compensation due hereunder, the Company shall make such payment to Employee’s
spouse, or in the event of her death prior to such payment, Employee’s estate.

 

3.    Change of Control Agreement. The change of control Employment Agreement
entered into between the Company and Employee on or about May 25, 2000, (the
“Change of Control Agreement”) shall be, and hereby is, terminated effective
December 31, 2002. In the Event of a Change of Control, as that term is defined
in the Change of Control Agreement, then all cash compensation due and payable
pursuant to Sections 2.1 and 2.3 hereunder, which has not been paid to Employee
or his spouse or estate, shall become immediately due and payable and all
obligations for the payment of benefits described herein shall continue to be
obligations of the Company or its successor in interest.

 

4.    Trade Secrets Covenant.

 

4.1    Employee acknowledges that during the course of his employment by the
Company he has been in contact with customers, employees, and others having
dealings with the Company and has had access to trade secrets and other
confidential

 

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information with regard to the business, operations, accounts, books and
records, sales, customers, pricing and other activities of the Company (“Trade
Secrets”). Employee recognizes and agrees that the disclosure of such Trade
Secrets to parties other than the Company or the improper use thereof will cause
serious and irreparable injury to the Company. Accordingly, Employee shall, at
all times, keep secret and inviolate all Trade Secrets, which he now knows. In
addition, Employee shall promptly return to the Company all documents pertaining
to Trade Secrets, including, but not limited to, unpublished records,
agreements, books of account, corporate documents, work papers, correspondence,
customer lists, memoranda, computer software or documentation in connection
therewith, plans, drawings or copies or extracts from any of the foregoing, in
his possession or under his control upon execution of this separation agreement.

 

5.    Non-Competition Covenant. Employee agrees that for a period of 12 months
commencing on the Separation Date, he will not engage in the Business or, own,
manage, operate, control, or participate in, or have any ownership interest in,
or make loans to, or act as a guarantor, surety, or indemnitor for, or aid or
advise as an employee, director, officer, consultant or otherwise, whether
directly or indirectly, any enterprise (whether a sole proprietorship,
partnership, corporation, firm, joint venture, trust or other entity) which is
engaged in the Business, without first obtaining the written consent of the
President and CEO of ONCO. This provision shall not prohibit Employee from
owning less than 5% of any publicly traded shares of a company in the Business.

 

6.    Breach of Trade Secret and/or Non-Competition Covenants.

 

6.1    Employee agrees that the remedy at law for any breach by him of the
foregoing provisions of Sections 4 and 5 will be inadequate, and the Company
shall be

 

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entitled to both temporary and permanent injunctive relief enforcing such
provisions, in addition to any other remedy it may have at law or in equity.

 

6.2    The covenants of Employee contained in Sections 4 and 5 are separate and
independent of any other provisions hereof and shall survive the termination of
this Agreement.

 

6.3    Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company,
and he hereby acknowledges and agrees that the same are reasonable in time and
territory, are designed to eliminate competition which otherwise would be unfair
to the Company, are fully required to protect the legitimate interest of the
Company, and do not confer a benefit upon the Company disproportionate to the
detriment to Employee.

 

7.    Release.

 

7.1    In consideration of the foregoing, Employee agrees not to initiate or
maintain any charges, complaints, claims, legal actions or grievances arising
out of or in conjunction with his previous employment with or separation from
the Company, including claims for severance pay, or relating to any events
occurring prior to the signing of this Agreement. Nothing contained herein shall
be construed to limit Employee’ rights pursuant to 29 USC Section 626(f)(4) and
the exercise of such rights shall have no force and effect on any other
provision set forth in this Agreement. In further consideration of the
foregoing, Employee agrees to release and forever discharge the Company and any
of its past, present or future affiliated companies, subsidiaries, divisions,
and any and all of the Company’s past, present and future officers, agents,
directors, representatives, employees, shareholders and, as applicable, their
successors, assigns, heirs and executors from any

 

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and all claims, including, but not limited to, employment, re demands,
liability, obligations, damages, rights, costs, losses, debts and expenses
(including but not limited to attorneys’ fees), causes of actions, or lawsuits
based upon, related to, or arising out of his employment with and separation
from the Company, all, and only, with respect to any events, whether known or
unknown or suspect or unsuspected, occurring prior to the signing of this
Agreement. This Agreement not to sue includes, but is not limited to:

 

claims, actions, causes of action or liabilities arising under Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act,
as amended; Employee Retirement Income Security Act of 1974, as amended; the
Older Workers Benefits Protection Act, as amended; 42 U.S.C. Section 1981, as
amended; the Civil Rights Act of 1991, as amended; the Worker Adjustment and
Retraining Notification Act, as amended; the Rehabilitation Act of 1973, as
amended; the Americans with Disabilities Act, as amended; the Family and Medical
Leave Act, as amended; any state anti- discrimination, civil rights or human
rights laws, any other federal, state or municipal employment discrimination
statutes and decisional law including, but not limited to, claims based on age,
sex, attainment of benefit plan rights, race, religion, national origin, marital
status, sexual orientation, ancestry, harassment, parental status, handicap,
disability, retaliation, and veteran status, as well as claims for breach of
contract,

 

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employee benefits, implied contract, promissory estoppel, defamation, tort
claims, and any common law claims recognized now or later, including violations
of public policy.

 

8.    Confidentiality. Employee further agrees that he will not divulge the
terms of this Agreement to any person or entity whatsoever at any time, except
to his spouse, attorney and/or financial advisors, unless required to do so by
Jaw.

 

9.    Acknowledgement. Employee acknowledges that he has been given a period of
at least twenty-one (21) days within which to consider this Agreement prior to
the execution of it and that he has reviewed its terms and considered its
effect, including the foregoing release of claims. Employee also acknowledges
that he has been advised in writing to consult with an attorney prior to
executing it. Employee understands that for a period of seven (7) days following
the execution of this Agreement, he may revoke it, and that this Agreement shall
not become effective or enforceable until the revocation period of seven (7)
days has expired. Employee understands that in order to revoke this Agreement
within this seven (7) day time period he must provide written notice of that
intention to Michael D. Lundin, President and Chief Executive Officer of the
Company so that Mr. Lundin may actually and personally receive notice of the
revocation.

 

10.    No Admission. It is agreed that the execution and/or implementation of
this Agreement does not in any way constitute or represent an admission of any
kind by the Company and/or by Employee.

 

11.    Severability. The invalidity or unenforceability of any portion of this
Agreement shall not impair or affect the validity or enforceability of any other
portion of this Agreement, which shall remain in full force and effect.

 

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12.    Assignment. Employee shall not assign, transfer, pledge or encumber this
Agreement or any rights or obligations hereunder. The Company may assign or
transfer this Agreement to successor Company in the event of merger,
consolidation, or transfer or sale of all or substantially all of the assets of
the Company; provided, however, that in the case of any such assignment or
transfer, this Agreement shall be binding upon and inure to the benefit of such
transferee, which shall assume and perform all of the obligations of the Company
hereunder; provided further, however, that the Company shall riot be released of
its obligations hereunder until fully discharged to Employee as a result of an
assignment or transfer of this Agreement to the extent such obligations are not
fulfilled by the assignee or transferee.

 

13.    Waiver. A waiver by either party of a breach of any provisions of this
Agreement shall not operate or be construed to be a waiver of any subsequent
breach.

 

14.    Miscellaneous. This Agreement (a) shall be governed by and interpreted in
accordance with the laws of the State of Ohio, (b) shall not be modified except
in writing signed by the parties, (c) constitutes the entire understandings and
agreements (both oral and written), and (d) shall be binding upon and inure to
the benefit of the parties hereto, their heirs, executors, administrators,
successors and permitted assigns.

 

15.    Headings. The paragraph headings are for convenience only and shall not
affect the construction or interpretation of this Agreement.

 

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READ BEFORE SIGNING

 

I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE PROVISIONS OF THIS SEPARATION
AGREEMENT AND RELEASE. THIS RELEASE INCLUDES CLAIMS OR RIGHTS AND ALLEGED CLAIMS
OR RIGHTS RELATING TO FEDERAL, STATE OR LOCAL LAWS PROHIBITING, EMPLOYMENT
DISCRIMINATION, WHETHER BASED ON AGE, SEX, RACE, COLOR NATIONAL ORIGIN,
RELIGION, HANDICAP OR MARITAL, PARENTAL OR VETERAN STATUS OR CLAIMS GROWING OUT
OF ANY LEGAL RESTRICTIONS ON THE COMPANY’S RIGHT TO TERMINATE ITS EMPLOYEES. I
HAVE NOT RELIED UPON ANY OTHER REPRESENTATION OR STATEMENT WRITTEN OR ORAL. I
HAVE HAD TIME TO CONSULT WITH AN ATTORNEY OR MY CHOICE PRIOR TO EXECUTING THIS
SEPARATION AGREEMENT AND RELEASE

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple
counterparts at the place and as of the date and year first above written.

 

OGLEBAY NORTON MANAGEMENT COMPANY

OGLEBAY NORTON COMPANY

 

By:

 

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Michael D. Londin

President and Chief Executive Officer

 

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Kenneth P. Pavlich “Employee”

 

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