EXHIBIT 10(o)
SEPARATION AGREEMENT
AND RELEASE
This document is a SEPARATION AGREEMENT AND RELEASE (this "Separation
Agreement") and is between FERRO CORPORATION ("Ferro") and M. XXXXX Xxxxxx ("Xx.
Xxxxxx").
For good and valuable consideration, and intending to be legally bound,
Ferro and Xx. Xxxxxx hereby agree as follows:
1. TERMINATION OF EMPLOYMENT
X. Xxxxx has employed Xx. Xxxxxx since January 1, 2000.
B. As of January 1, 2000, Xx. Xxxxxx and Ferro signed an employment
agreement (the "Employment Agreement") with Ferro, which agreement was
amended effective March 15, 2000.
C. As of July 31, 2001, Ferro and Xx. Xxxxxx signed a Change in Control
Agreement (the "Change in Control Agreement").
D. As of March 2, 2002, Xx. Xxxxxx and Ferro executed a Confidentiality
Agreement ("Confidentiality Agreement").
E. Xx. Xxxxxx currently serves as Ferro's Vice President, Electronic
Material Systems.
X. Xxxxx and Xx. Xxxxxx have mutually decided to end Xx. Xxxxxx'x
employment relationship with Ferro on the terms and conditions set
forth in this Separation Agreement.
2. NORMAL PACKAGE
A. Under Ferro's standard severance policy, Xx. Xxxxxx would have been
entitled to receive -
(1) An amount equal to one week's base pay for each completed year of
service plus five additional weeks' pay, or $52,884.59 (i.e.,
$4,807.69 times 11 weeks),
(2) Two weeks' pay in lieu of notice, or $9,615.38 (i.e., $4,807.69
times two weeks), and
(3) Health care (i.e., medical and dental) coverage for the month of
separation plus an additional four months, i.e., coverage through
June 30, 2006.
B. The payments and benefits Xx. Xxxxxx would have been entitled to
receive under Ferro's standard severance practice are called the
"Normal Package" below.
3. ENHANCED PACKAGE
In consideration of the agreements and promises made by Xx. Xxxxxx in this
Separation Agreement, Ferro is prepared to provide Xx. Xxxxxx with, and Xx.
Xxxxxx hereby elects to receive, the following enhanced separation pay and
benefits (the "Enhanced Package") in lieu of the Normal Package on and
subject to the terms and conditions of this Separation Agreement:
A. CONTINUATION ON PAYROLL
Xx. Xxxxxx will continue on Ferro's payroll at his current salary and
with his current employee benefits through February 28, 2006. Xx.
Xxxxxx'x employment with Ferro will terminate at the close of business
on that date.
X. XXXXXXXXX PERIOD
The "Severance Period" will be the period beginning March 1, 2006, and
ending the earlier of August 31, 2007, or the date on which Xx. Xxxxxx
begins employment and receives income from another employer.
X. XXXXXXXXX PAYMENTS
During the Severance Period, Ferro will pay Xx. Xxxxxx as xxxxxxxxx
Xx. Xxxxxx'x current base salary of $10,416.67 per pay period.
X. XXXXXXXXX BENEFITS
During the Severance Period, Ferro will pay the employer's portion of
Xx. Xxxxxx'x premium costs under Ferro's group health (i.e., medical,
dental, and vision) plans.
E. UNUSED VACATION
On or before April 10, 2006, Ferro will pay Xx. Xxxxxx the amount of
$15,000.00 representing 15 days of earned but unused vacation.
F. COMPANY AUTOMOBILE
On or before May 1, 2006, Xx. Xxxxxx will be entitled to purchase his
company automobile in accordance with normal Ferro policy applicable
to corporate officers of Ferro. Xx. Xxxxxx will be entitled to the use
of such automobile (together with gasoline, normal maintenance, and
insurance) until such date.
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G. CELLULAR TELEPHONE
Xx. Xxxxxx will be entitled to the continued use of his company
cellular telephone until March 1, 2006. Ferro will cooperate with Xx.
Xxxxxx in transferring his company cellular telephone number to a
personal cellular telephone service of Xx. Xxxxxx'x choosing.
H. COMPANY COMPUTER
Ferro has custody of Xx. Xxxxxx'x company computer. Ferro will delete
from the computer's hard drive any and all Ferro confidential and
proprietary information. When Ferro has completed the deletion
process, Ferro will return the company computer to Xx. Xxxxxx and Xx.
Xxxxxx will be entitled to retain the company computer at no cost to
Xx. Xxxxxx. Xx. Xxxxxx will not use any information or data remaining
on such computer in any manner that is inconsistent with his
obligations under numbered paragraph 8 below.
I. OUTPLACEMENT
For a period of one year after the termination of his employment,
Ferro will provide Xx. Xxxxxx (at Xxxxx'x cost) with the services of
an executive outplacement firm selected by Ferro and acceptable to Xx.
Xxxxxx.
J. OTHER BENEFITS
Except as set forth above, nothing in this Separation Agreement will
abrogate or otherwise modify or amend Xx. Xxxxxx'x rights and benefits
under other employee benefit plans. Accordingly, Xx. Xxxxxx'x rights
and benefits under such other employee benefit plans will be governed
by the terms and conditions of such plans.
4. ANNUAL INCENTIVE PLAN
A. Xx. Xxxxxx is a participant in the Ferro annual incentive plan and is
eligible for a bonus payment under such plan for the year 2005.
X. Xxxxx will determine the amount of Xx. Xxxxxx'x bonus (if any) in good
faith and in the ordinary course. If Xx. Xxxxxx is entitled to a bonus
payment for 2005, Ferro will pay Xx. Xxxxxx the bonus when payments
are made to other participants.
C. Xx. Xxxxxx will not be eligible for a bonus payment for the years 2006
or 2007.
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5. STOCK OPTIONS
A. Xx. Xxxxxx has been awarded the following as-yet-unexercised options
under Ferro's 1985 Employee Stock Option Plan and Ferro's 2003
Long-Term Incentive Compensation Plan:
(1) 5,500 Non-Qualified Options granted February 11, 2000, with an
option exercise price of $18.50 per share,
(2) 5,500 Non-Qualified Options granted February 9, 2001, with an
option exercise price of $23.60 per share,
(3) 2,000 Non-Qualified Options granted February 9, 2001, with an
option exercise price of $23.60 per share,
(4) 10,000 Non-Qualified Options granted February 11, 2002, with an
option exercise price of $25.50 per share,
(5) 7,000 Non-Qualified Options granted February 28, 2003, with an
option exercise price of $21.26 per share,
(6) 20,000 Non-Qualified Options granted February 9, 2004, with an
option exercise price of $26.26 per share,
(7) 12,372 Non-Qualified Options granted February 7, 2005, with an
option exercise price of $19.39 per share, and
(8) 20,628 Incentive Stock Options granted February 7, 2005, with an
option exercise price of $19.39 per share.
Xx. Xxxxxx will not be awarded any further options under any Ferro
stock option plan.
B. Subject to any trading blackouts that may from time to time be in
effect, Xx. Xxxxxx will be entitled to exercise any of the foregoing
options that have vested as of the date his employment with Ferro
terminates provided Xx. Xxxxxx carries out such exercise no later than
90 days after Ferro has filed its Annual Report on Form 10-K for the
fiscal year ended December 31, 2005, with the Securities and Exchange
Commission. After such 90-day period has ended, however, Xx. Xxxxxx
will not be entitled to exercise any further Ferro stock options.
6. PERFORMANCE SHARE AWARDS
X. Xxxxx made an award of 5,000 Performance Shares to Xx. Xxxxxx in 2003
under Ferro's 1997 Performance Share Plan and Ferro's 2003 Long-Term
Incentive Compensation Plan for the performance period January 1,
2003, through December 31, 2005. Ferro will determine
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the amount (if any) of Xx. Xxxxxx'x award with respect to such
Performance Shares in good faith and in the ordinary course. If Xx.
Xxxxxx is entitled to a distribution of shares or payment in respect
of such award, Ferro will make the resulting distribution of shares or
payment to Xx. Xxxxxx when distributions and payments are made to
other participants.
X. Xxxxx has also made the following as-yet-unmatured awards of
Performance Shares to Xx. Xxxxxx under Xxxxx'x 1997 Performance Share
Plan and/or Ferro's 2003 Long-Term Incentive Compensation Plan:
(1) 8,300 Performance Shares for the performance period January 1,
2004, through December 31, 2006, and
(2) 7,300 Performance Shares for the performance period January 1,
2005, through December 31, 2007.
X. Xxxxx will make no further awards to Xx. Xxxxxx under the Performance
Share Plan and Xx. Xxxxxx will be eligible for no further
distributions or payments with respect to such as-yet-unmatured
Performance Shares.
7. ACQUISITION PERFORMANCE REWARD PLAN AWARD
A. In 2001, in connection with the dmc(2) acquisition, Ferro awarded Xx.
Xxxxxx 3,000 Reward Shares under the Ferro Acquisition Performance
Reward Plan.
B. According to the terms Acquisition Performance Reward Plan, if
targeted results were achieved during a four-year performance period,
Xx. Xxxxxx would receive a cash payment according to a formula set
forth in the award.
X. Xxxxx will determine the amount (if any) of Xx. Xxxxxx'x award with
respect to such Reward Shares in good faith and in the ordinary
course. If Xx. Xxxxxx is entitled to a payment in respect of such
Reward Shares, then Ferro will make the resulting payment to Xx.
Xxxxxx when payments are made to other participants.
8. NON-COMPETITION AND CONFIDENTIALITY
Xx. Xxxxxx will not disclose this Separation Agreement or its terms to
anyone other than his spouse or his personal tax advisor, financial
advisor, or attorney.
In addition, in consideration of the Enhanced Package, Xx. Xxxxxx promises
that:
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A. During the Severance Period and for a period of one year thereafter,
Xx. Xxxxxx will not, without Ferro's prior written approval, directly
or indirectly, engage in, or assist or have an ownership interest in,
or act as agent, advisor or consultant of, for, or to any person,
firm, partnership, corporation or other entity that is engaged in, the
manufacture or sale of products that compete with Ferro's electronic
material systems products or any products which are logical
extensions, on a manufacturing or technological basis, of such
products. (For purposes of this Separation Agreement, companies that
compete with Ferro's electronic material systems business will be
deemed to be only those businesses listed on Appendix A to this
Separation Agreement.)
B. During the Severance Period and thereafter, Xx. Xxxxxx will not
disclose to any persons any proprietary or confidential business
information concerning Ferro, any of its affiliated companies,
obtained or which came to Xx. Xxxxxx'x attention during the course of
his employment with Ferro as set forth in paragraphs 2, 3 and 4 of the
Confidentiality Agreement.
C. During the Severance Period and thereafter, Xx. Xxxxxx will not make
any statements or disclose any information concerning Ferro, its
directors, officers, management, staff, employees, representatives, or
agents (collectively, "Ferro and its management") which reasonably
could be expected to disparage Ferro or its management, damage the
reputation or business prospects of Ferro or its management, or
interfere in any way with the business relations Ferro has with its
customers (including potential customers), suppliers, alliance
partners, employees, investors, or shareholders.
In addition, Xx. Xxxxxx hereby reaffirms the commitments he made to Ferro
in paragraphs 1-4 of his Confidentiality Agreement, but otherwise Xx.
Xxxxxx'x Employment Agreement and Confidentiality Agreement will have no
further force or effect and are superseded entirely by this Separation
Agreement.
9. WAIVER
Xx. Xxxxxx acknowledges that Ferro is providing the Enhanced Package in
lieu of all other benefits to which Xx. Xxxxxx is or may be entitled
arising out of Xx. Xxxxxx'x employment and/or termination of employment.
Xx. Xxxxxx hereby waives any and all rights to any other severance benefits
offered to Ferro employees or other right or benefit under any agreement,
understanding, or promise, whether written or oral, between Xx. Xxxxxx and
Ferro.
10. JOB CLASSIFICATIONS
There are no other Ferro employees in Xx. Xxxxxx'x job classification being
terminated.
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11. RELEASE
In consideration of the Enhanced Package, Xx. Xxxxxx hereby releases Ferro,
as well as all employees, officers, directors, parents, subsidiaries,
affiliates, agents, representatives, successors, and assigns of Ferro, from
any and all claims, demands, actions, causes of action, suits, damages,
losses, costs, attorneys' fees, and or expenses, known or unknown, which
Xx. Xxxxxx has or may claim to have against any of the foregoing arising
from his employment or as a result of his termination of employment with
Ferro.
Xx. Xxxxxx covenants to Ferro that Xx. Xxxxxx will not assert any such
claims, demands, actions, or causes of action.
Xx. Xxxxxx acknowledges that the foregoing release includes (but is not
limited to) claims arising under Federal, state, or local law in the United
States prohibiting employment discrimination, such as the Age
Discrimination in Employment Act of 1967, as amended, Title VII of the
Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the
Employee Retirement Income Security Act, the Equal Pay Act, 42 U.S.C.
Section 1981, Section 1981 of the Civil Rights Act of 1866, the Vietnam Era
Veterans Readjustment Assistance Act, the Rehabilitation Act of 1973, the
Americans with Disabilities Act, the Family and Medical Leave Act, and all
claims under any other Federal or state laws, local ordinances or common
law and other laws restricting an employer's right to terminate the
employment relationship. Xx. Xxxxxx further acknowledges that such release
includes (but is not limited to) any claims Xx. Xxxxxx may have for
unemployment compensation or may have under any internal grievance
procedure at Ferro.
The foregoing release will not, however, apply to any claims, demands,
actions, or causes of action arising after the effective date of this
Separation Agreement that are unrelated to Xx. Xxxxxx'x termination of
employment.
12. XX. XXXXXX'X EMPLOYMENT FILE
As soon as practicable after the effectiveness of this Separation
Agreement, Ferro will provide Xx. Xxxxxx a copy of the employment file
maintained by Ferro in the ordinary course of business; provided, however,
that Ferro had made and makes no representation or warranty about the
contents of such employment file.
12. NON-DISPARAGEMENT OF XX. XXXXXX
During the Severance Period and thereafter, Ferro will not make any
statements or disclose any information concerning Xx. Xxxxxx which
reasonably could be expected to disparage Xx. Xxxxxx or damage his
reputation or employment prospects.
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13. VOLUNTARY ELECTION
Xx. Xxxxxx acknowledges that:
A. The only consideration Xx. Xxxxxx has been given for signing this
Separation Agreement are the terms stated in this Separation
Agreement.
B. No other promises or agreements have been made to or with Xx. Xxxxxx
by any person or entity to induce Xx. Xxxxxx to sign this Separation
Agreement.
C. Xx. Xxxxxx has been given at least 21 days to consider the effect of
this Separation Agreement, including the release contained above,
before signing this Separation Agreement.
D. Xx. Xxxxxx has been encouraged to discuss this Separation Agreement
and any matters related to the termination of his employment
(including any rights Xx. Xxxxxx may have with respect to a claim of
employment discrimination) with a legal advisor of Xx. Xxxxxx'x own
choosing and Xx. Xxxxxx has had ample opportunity to do so.
E. Xx. Xxxxxx understands that he may revoke this Separation Agreement in
writing during the seven day period beginning the day Xx. Xxxxxx signs
this Separation Agreement and delivers it to Ferro and that this
Separation Agreement will be neither effective nor enforceable until
Xx. Xxxxxx'x seven-day revocation period has expired.
14. TERMINATION PROCESSING
Xx. Xxxxxx has previously surrendered to Ferro all Ferro property in his
possession (other than his company car and cellular telephone as provided
above). Immediately after the execution and delivery of this Separation
Agreement, Xx. Xxxxxx will assist Ferro's human resources department by
executing such documentation and completing such other tasks as may be
reasonably required for the orderly termination of Xx. Xxxxxx'x employment.
15. WITHHOLDING
All payments under this Separation Agreement will be subject to
withholding, deductions and contributions as required by law.
16. TERMINATION OF CHANGE IN CONTROL AGREEMENT
The Change in Control Agreement is hereby terminated by mutual agreement of
Ferro and Xx. Xxxxxx effective the date of this Separation Agreement.
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17. GOVERNING LAW
This Separation Agreement will be governed by the internal substantive laws
of the State of Ohio, the state in which Xx. Xxxxxx was employed at the
time his employment was terminated.
BY SIGNING THIS SEPARATION AGREEMENT AND RELEASE, XX. XXXXXX AFFIRMS THAT HE HAS
READ THIS SEPARATION AGREEMENT AND RELEASE CAREFULLY, THAT HE KNOWS AND
UNDERSTANDS ITS CONTENTS, THAT HE IS SIGNING THIS SEPARATION AGREEMENT AND
RELEASE VOLUNTARILY, AND THAT SIGNING THIS SEPARATION AGREEMENT AND RELEASE IS
HIS OWN FREE ACT AND DEED.
To evidence their agreement and intention to be bound legally by this document,
M. XXXXX XXXXXX and FERRO CORPORATION have signed and dated this SEPARATION
AGREEMENT AND RELEASE.
M. XXXXX XXXXXX FERRO CORPORATION
/s/ M. Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President & Chief Executive Officer
Date: March 6, 2006 Date: March 7, 0000
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Xxxxxxxx A
Companies That Compete
with
Ferro's Electronic Material Systems Business
1. NCI (also called JCI) - dielectrics
2. Kyoritsu - dielectrics
3. DuPont Electronic Materials- metal pastes for solar and MLCC; and slurries
for CMP
4. Sumitomo - metal pastes
5. Shoei - metal pastes and metal powders
6. Heraeus Electronic Materials - metal pastes and electronic packaging
materials
7. Namics - metal pastes
8. Mitsui - surface finishing materials
9. Showa Denko - surface finishing materials
10. Fujimi - surface finishing materials and CMP slurries
11. Cabot Microelectronics - CMP slurries
12. Hitachi Electronic Materials - CMP slurries
13. Rodel - CMP slurries
M. XXXXX XXXXXX FERRO CORPORATION
By:
------------------------------------- ------------------------------------
Xxxxx X. Xxxxxx
President & Chief Executive Officer
Date: March __, 2006 Date: March __, 2006
