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EXHIBIT 10
Agreement Between
Ferro Corporation and Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx ("RCO") and Ferro Corporation hereby voluntarily
enter into the following Agreement:
1. Effective January 6, 1997 RCO shall cease to be an officer of
Ferro, but shall remain an employee of Ferro without specified duties, until the
earlier of April 16, 1999, or his death. RCO shall be retained on the payroll of
Ferro from January 6, 1997 to April 15, 1997 at his preexisting salary level.
Compensation arrangements applicable thereafter shall be as set forth in this
Agreement.
2. For the period April 16, 1997 through April 16, 1999, RCO shall be
retained on the payroll and shall be paid a salary at an annual rate of $290,640
payable in equal installments in accordance with Ferro's salaried employee
payroll practices at the time of any such payment. For purposes of pension
calculation, the $290,640 annual payment will be considered as $207,600 base
salary and $83,040 bonus.
3. RCO shall not be entitled to bonus participation applicable to the
year 1997 or subsequent years. The 1996 bonus will be paid on the regular
distribution dates with the personal performance portion at 0% achievement, and
the mathematical portion calculated based on final 1996 results per the plan.
4. RCO shall be entitled to full outplacement services at a mutually
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agreeable outplacement firm. Payment shall be made directly by Ferro to the
outplacement firm and this benefit cannot be converted to a cash payment to RCO.
5. RCO will not be entitled to participate in the following Ferro
employee plans after January 6, 1997:
a. Salary continuation plan;
b. Long-term disability plan;
c. Business travel accident insurance.
RCO will be entitled to participate in the following employee plans (or
their successor plans) as a continuing salaried employee through April 16, 1999:
x. Xxxxx FlexChoice Program;
b. Savings and Stock Ownership Plan;
x. Xxxxx Corporation Retirement Plan;
x. Xxxxx Corporation Excess Benefits Plan;
e. Supplemental SSOP;
f. Annual executive physical;
g. Life Insurance.
RCO's continued participation in such plans is subject to the ongoing
right of Ferro to modify, amend or discontinue such plans (and the Ferro
Salaried Retiree Medical Program) in any manner, so long as any such
modification, amendment or discontinuance is one of general application, rather
than one that uniquely discriminates against RCO.
Effective April 16, 1999 RCO shall be eligible to participate as a
retiree in the
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Ferro Salaried Retiree Medical Program (or any successor plan), provided he
follows the procedures in such plan to activate his participation. If RCO dies
prior to April 16, 1999, his wife shall become eligible to participate in the
Ferro Salaried Retiree Medical Program or any successor plan as if she were a
qualified widow of a salaried retiree.
6. Commencing May 1, 1999, Ferro will pay to RCO (or his spouse, in
the event of RCO's prior death) a monthly pension, for the balance of his
lifetime, in the amount determined by the terms and provisions of the Ferro
Corporation Retirement Plan and the Ferro Corporation Excess Benefits Plan. The
amount of his monthly pension is currently estimated to be $7,874.43, and will
be determined in accordance with the assumptions and procedures set forth in
Exhibit I. In the event RCO predeceases his wife after payments under this
Section 6. have commenced, his wife shall be entitled to receive a surviving
spouse's benefit as provided by the Ferro Corporation Retirement Plan and Ferro
Corporation Excess Benefits Plan. In the event RCO predeceases his wife before
payments under this Section 6 have commenced, his wife shall be entitled to
receive (a) for the balance of the period to April 16, 1999, those amounts which
would otherwise be payable to RCO under Section 1, 2, and 3 hereof, were it not
for his death, and (b) beginning with the date of RCO's death, such surviving
spousal pension benefits as are provided under the Ferro Corporation Retirement
Plan and Ferro Corporation Excess Benefits Plan as though RCO had been an active
salaried employee at the time of his death.
7. The provisions of this Agreement are based upon an election by RCO
of
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early retirement as of May 1, 1999 and the commencement of early retirement
income payments to him as of that date under the Ferro Corporation Retirement
Plan.
8. Provided that he survives to April 16, 1999, RCO shall be deemed
to have retired as of April 16, 1999 with respect to his rights under the Ferro
Stock Option Plan and Performance Share Plan, and the stock option awards and
performance share awards and agreements pursuant to such Plans shall be
determined under the provisions of those Plans and those agreements, based upon
termination of employment on April 16, 1999. RCO shall not be entitled to
receive additional awards under those Plans after the date of this Agreement.
9. Ferro shall have no obligation to RCO on account of unused
vacation, illness or personal absence, it being deemed that any such obligations
are fulfilled by the terms of this Agreement.
10. RCO currently uses a Ferro-provided leased automobile with respect
to which Ferro pays the operating costs. Upon expiration of the current lease,
Ferro will purchase it and transfer ownership to RCO. Transfer of title and
payment of operating costs through such date fully discharges any remaining
obligations of Ferro to RCO regarding the use of a Ferro-provided leased
automobile.
11. Ferro will continue to cause to be made available to RCO, at
Ferro's expense, the services of KPMG Peat Marwick with respect to tax advice
and tax return preparation through December 31, 1999, as well as for RCO's 1999
tax returns,
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whenever completed.
12. Ferro will provide RCO, for determining the amount of RCO's pension
only, with an additional two years of Credited Benefit Service beyond the
expiration of this Agreement. Thus, RCO will have a total of 22 years Credited
Benefit Service. In partial consideration therefore, RCO agrees to provide up to
one hundred twenty (120) full days consulting , by telephone or in person,
during the twenty-four (24) month period following the effective date of this
Agreement as Ferro may from time to time reasonably request. For any consulting
days in excess of the original one hundred twenty (120) days during that period,
Ferro will pay RCO at the rate of eight hundred fifty dollars ($850) per day. It
is agreed that such consulting will be scheduled so as not to unreasonably
interfere with RCO's other obligations or activities. Ferro will reimburse RCO
for reasonable and actual travel expenses incurred at Ferro's request in
conducting consulting projects under this section.
13. RCO hereby reaffirms his obligations and commitment pursuant to
that Employment Agreement between Ferro and RCO (the "Secrecy Agreement") that
he signed at the time of commencement of his employment with Ferro. RCO agrees
that in consideration for the early retirement benefit elected hereunder and
pursuant to the terms of the Excess Benefit Plan and in further consideration
for the additional service time provided in Section 12 of this Agreement, he
will not, at any time prior to age 65 without Ferro's prior written consent
(which may be given or withheld in Ferro's absolute discretion), accept any
other employment or engage, as a proprietor, consultant, partner, owner, or
otherwise in any activity, business or enterprise which,
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with respect to such activity or engagement, is competitive with the businesses
of Ferro for which RCO had direct responsibility during RCO's tenure as an
officer of Ferro, including but not limited to Porcelain Enamel, Ceramic Glaze,
Specialty Ceramics, Inorganic Pigments, Glass Enamels, Forehearth Colorants, and
Deco products. This covenant shall not be construed to preclude RCO's employment
by an entity which later acquires a product line that competes with Ferro's
product lines, as long as RCO is not directly involved with or employed in the
business unit producing or selling such line. Except as aforesaid, no other
restriction or noncompetition obligations shall be imposed upon RCO and he shall
be free to obtain employment or participate as a principal, shareholder, or
partner in any other business enterprise.
14. RCO hereby releases and discharges Ferro, its successors,
subsidiaries, employees, officers, directors and representatives from all
claims, liabilities, demands and causes of action, known or unknown, fixed or
contingent, which he may have or claim to have against them, or any of them,
(other than his rights under or described in this Agreement, other than claims
the basis of which arise after the date of this Agreement, and other than arise
in any benefit plan with respect to which RCO is or will be due to receive
benefits in the future). This includes, but is not limited to, claims arising
under Federal, state or local laws prohibiting age, sex, race or other forms of
discrimination or claims arising out of any legal or equitable restrictions on
Ferro's right to terminate the employment of its employees. It also includes a
release of all rights under his Executive Employment Agreement with Ferro as
amended and restated July 28, 1995, but not under provisions thereof as and to
the extent they are incorporated by
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reference under Section 17 of this Agreement.
This release also includes waiver of any right RCO may have or claim to
have to recovery in any lawsuit brought on his behalf by any state or Federal
agency with respect to his employment termination.
15. RCO agrees to furnish to Ferro such documentation as Ferro may
reasonably request for the release to Ferro of any funds held in escrow to
secure Ferro's obligations to RCO under his Executive Employment Agreement with
Ferro.
16. In the event of the death of RCO prior to April 16, 1999, the
payments described in Section 1, 2, and 3 hereof shall continue to be paid to
his surviving spouse and, in the event of her death prior to April 16, 1999, to
RCO's estate, until completion of payment of the amounts provided for in such
Section 1, 2 and 3.
17. This Agreement hereby expressly incorporates by reference the
provisions pertaining to mitigation and offset, arbitration, and successors and
assigns (but as if such terms referred to the compensation and benefits payable
under this Agreement, rather than those payable under the Executive Employment
Agreement) of the Executive Employment Agreement, as if such provisions were
fully rewritten herein and applicable as between RCO and Ferro.
18. For Federal, state, and local income tax reporting and withholding
purposes, the payments in Sections 2 and 6 herein shall be deemed taxable and
therefore reported as such in the years which the payments are made. For
purposes of employment tax under the Internal Revenue Code Section
3121(v)(2)(A), the payments under Section 6, to the extent subject to tax shall
be deemed taxable.
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19. Except as specifically provided otherwise in this Agreement, the
terms of this Agreement shall supersede any different or conflicting provisions
of any other agreement between RCO and Ferro, and of any plans or policies of
Ferro applicable to RCO.
20. Ferro shall pay all legal fees and expenses incurred by RCO in
connection with the negotiation and preparation of this Agreement (including all
such fees and expenses, if any, incurred in seeking to enforce any right or
benefit provided by this Agreement, or in interpreting this Agreement) and with
the interpretation and enforcement of his Executive Employment Agreement
effective July 28, 1995.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original, but all
of which shall collectively constitute one and the same instrument.
DATE: March 13, 1997 /s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
FERRO CORPORATION
DATE: March 13, 1997 By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
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