EXHIBIT 10(n)
SEPARATION AGREEMENT
AND RELEASE
This document is a SEPARATION AGREEMENT AND RELEASE (this "Separation
Agreement"), is dated November 11, 2005, and is between FERRO CORPORATION
("Ferro") and XXXX X. 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 November 29, 1999.
B. As of May 14, 2002, Xx. Xxxxxx and Ferro signed an Confidentiality
Agreement (the "Confidentiality Agreement") with Ferro.
C. As of July 1, 2001, Ferro and Xx. Xxxxxx signed a Change in Control
Agreement (the "Change in Control Agreement").
D. Xx. Xxxxxx currently serves as Ferro's Vice President, Performance
Chemicals.
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, if his employment were
terminated today, Xx. Xxxxxx would be entitled to receive -
(1) An amount equal to one week's base pay for each completed year of
service plus four additional weeks' pay, or $51,057.72 (i.e.,
$5,673.08 times 9 weeks),
(2) Two weeks' pay in lieu of notice, or $11,346.16 (i.e., $5,673.08
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
February 28, 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
Unless he resigns or voluntarily terminates his employment earlier,
Xx. Xxxxxx will continue on Ferro's payroll at his current salary and
with his current employee benefits through March 31, 2006, and his
employment with Ferro will terminate on that date. If Xx. Xxxxxx
resigns or otherwise voluntarily terminates his employment with Ferro
before March 31, 2006, then Xx. Xxxxxx will not be eligible for any of
the separation pay or benefits provided in this numbered paragraph 3
or the 2005 bonus payment described in numbered paragraph 4.A below.
X. XXXXXXXXX PERIOD
The "Severance Period" will be the period beginning March 31, 2006,
and ending the earlier of June 30, 2007, or the date on which Xx.
Xxxxxx begins employment with another employer.
X. XXXXXXXXX PAYMENTS
During the Severance Period, Ferro will pay Xx. Xxxxxx as xxxxxxxxx
Xx. Xxxxxx'x current base salary of $12,291.66 per twice-monthly pay
period.
X. XXXXXXXXX BENEFITS
During the Severance Period, Ferro will continue to provide Xx. Xxxxxx
coverage under Ferro's employee health plans (i.e., medical, dental,
and vision care and flexible spending account) offered to Corporate
Lakeside employees, consistent with Xx. Xxxxxx'x current elections or
subsequent elections made by Xx. Xxxxxx during Ferro's normal annual
enrollment process. Ferro will pay the employer's portion of Xx.
Xxxxxx'x premium costs under such plans during the Severance Period.
E. COMPANY AUTOMOBILE
On or before December 31, 2005, Xx. Xxxxxx will be entitled to
purchase his company automobile in accordance with standard Ferro
policy applicable to corporate officers. Xx. Xxxxxx will be entitled
to the
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use of such automobile (together with gasoline, normal maintenance,
and insurance) until such date.
F. CELLULAR TELEPHONE
Xx. Xxxxxx will be entitled to the continued use of his company
cellular telephone until December 31, 2005. Ferro will cooperate with
Xx. Xxxxxx is transferring his company cellular telephone number to a
personal cellular telephone service of Xx. Xxxxxx'x choosing.
G. COMPANY COMPUTER
On or before December 31, 2005, Xx. Xxxxxx will deliver his company
computer to Ferro. Ferro will then 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 7 below.
H. OTHER BENEFITS
Xx. Xxxxxx'x rights with respect to other Ferro employee benefits,
including his rights with respect to Ferro's supplemental defined
contribution and defined benefit plans and deferred compensation plan,
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.
B. Xx. Xxxxxx'x 2005 bonus will be determined in accordance with standard
Ferro policy. Ferro will add to the amount so determined the gross sum
of $6,000.00. Xx. Xxxxxx'x 2005 bonus will be paid on or before April
30, 2006.
C. Xx. Xxxxxx will not be eligible for a bonus payment for the year 2006
or any year thereafter.
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:
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(1) 5,500 Non-Qualified Stock Options granted February 11, 2000, with
an option exercise price of $18.50 per share,
(2) 15,000 Incentive Stock Options granted February 9, 2001, with an
option exercise price of $23.60 per share,
(3) 5,271 Incentive Stock Options granted February 11, 2002, with an
option exercise price of $25.50 per share,
(4) 39,729 Non-Qualified Stock Options granted February 11, 2002,
with an option exercise price of $25.50 per share,
(5) 4,705 Incentive Stock Options granted February 28, 2003, with an
option exercise price of $21.26 per share,
(6) 50,295 Non-Qualified Stock Options granted February 28, 2003,
with an option exercise price of $21.26 per share,
(7) 4,151 Incentive Stock Options granted February 9, 2004, with an
option exercise price of $26.26 per share,
(8) 50,849 Non-Qualified Stock Options granted February 9, 2004, with
an option exercise price of $26.26 per share,
(9) 5,157 Incentive Stock Options granted February 7, 2005, with an
option exercise price of $19.39 per share, and
(10) 38,843 Non-Qualified 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 of 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 8,500 Performance Shares to Xx. Xxxxxx in 2003
under Ferro's 1997 Performance Share Plan for the performance period
January 1, 2003, through December 31, 2005. Xx. Xxxxxx will
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be eligible for distribution and payment with respect to such
Performance Shares in accordance with standard Ferro policy.
X. Xxxxx has also made the following as-yet-unmatured awards of
Performance Shares to Xx. Xxxxxx under Ferro's 1997 Performance Share
Plan and/or Ferro's 2003 Long-Term Incentive Compensation Plan:
(1) 9,700 Performance Shares for the performance period January 1,
2004, through December 31, 2006; and
(2) 8,600 Performance Shares for the performance period January 1,
2005, through December 31, 2007.
Xx. Xxxxxx will not be eligible for any distributions or payments with
respect to such Performance Shares.
X. Xxxxx will make no further awards to Xx. Xxxxxx under any Ferro
performance share plan.
7. NONCOMPETITION AND CONFIDENTIALITY
In consideration of the Enhanced Package, Xx. Xxxxxx promises that:
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.
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.
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 are likely to
disparage Ferro or its management, which are likely to damage the
reputation or business prospects of Ferro or its management, or which
are likely to interfere in any way with the business relations Ferro
has with its customers (including potential customers), suppliers,
alliance partners, employees, investors, or shareholders, unless
required to do so by law or order of a court or regulatory authority.
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Xx. Xxxxxx will at all times continue to cooperate fully with Ferro, its
counsel, and governmental investigators in connection with the on-going
investigation of, and litigation arising out of, pending legal issues.
Ferro, in turn, will continue to indemnify Xx. Xxxxxx against expenses,
including attorney's fees, judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him by reason of the fact that he was
an officer of Ferro in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, arising out of the pending legal matters in the manner
provided in Article V of Ferro's Code of Regulations. (For purposes of this
Agreement, the phrase "pending legal matters" includes, without limitation,
the accounting irregularities in Ferro's Polymer Additives business and
related matters, the putative class action lawsuits related to that matter,
the Department of Justice investigation into possible price fixing in the
heat stabilizers market, the Belgian, German and Hungarian investigations
into cartel activities in the European BBP market, the wrongful termination
lawsuit brought by Arno van de Ven, and the allegations related to
non-compliance with environmental laws in connection with the wastewater
treatment facilities at Ferro's Delaware River plan, and other similar
matters that may arise in the future.)
In addition, Xx. Xxxxxx hereby reaffirms the commitments he made to Ferro
in paragraphs 1-4 of his Confidentiality Agreement.
Ferro will cause its senior management to refrain from making any
statements or disclosing any information concerning Xx. Xxxxxx which is
likely to disparage Xx. Xxxxxx or which is likely to damage his reputation
or employment prospects, unless required to do so by law or order of a
court or regulatory authority.
8. 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.
9. JOB CLASSIFICATIONS
There are no other Ferro employees in Xx. Xxxxxx'x job classification being
terminated.
10. RELEASE
In consideration of the Enhanced Package, Xx. Xxxxxx hereby releases Ferro,
as well as all employees, officers, directors, parents, subsidiaries,
affiliates,
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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.
11. 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
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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.
12. TERMINATION PROCESSING
On or before March 31, 2006, Xx. Xxxxxx will surrendered to Ferro all Ferro
property in his possession (other than his company car and cellular
telephone as provided above). Xx. Xxxxxx will then 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.
13. WITHHOLDING
All payments under this Separation Agreement will be subject to
withholding, deductions and contributions as required by law.
14. TERMINATION OF CHANGE IN CONTROL AGREEMENT
The Change in Control Agreement is hereby terminated by mutual agreement of
Ferro and Xx. Xxxxxx when Xx. Xxxxxx'x employment with Ferro terminates.
15. GOVERNING LAW
This Separation Agreement will be governed by the internal substantive laws
of the State of Ohio, the state 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.
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To evidence their agreement and intention to be bound legally by this document,
XXXX X. XXXXXX and XXXXX CORPORATION have signed and dated this SEPARATION
AGREEMENT AND RELEASE.
XXXX X. XXXXXX FERRO CORPORATION
By:
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Xxxxx X. Xxxxxx
President & Chief Operating Officer
Date: ______________, 2005 Date: ______________, 2005
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