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Exhibit 10
FERRO CORPORATION
Executive Employment Contract
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I. Recitals
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(A) This Executive Employment Contract (this "Agreement") is between
Ferro Corporation (the "Company") and Xxxxxxxxx X. Xxxxx (the "Executive")
and is effective as of March__, 1998.
(B) The address of the Company is 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000. The address of the Executive is _________________________.
(C) The Executive is currently employed by the Company in the capacity
of Vice President, Administration and the Executive is one of the key
executives of the Company.
(D) In consideration of the mutual promises contained herein and
other good and valuable consideration, the Executive and the Company have
entered into this Agreement.
II. Definitions
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As used in this Agreement, the following terms shall have the meanings
set forth below:
"Agreement" means this Agreement.
"Bank" has the meaning set forth in Section VI.
"Base Salary" has the meaning set forth in Section III.D.(1).
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"Benefit Plans" has the meaning set forth in Section
III.E.(2).
"Board" means the Board of Directors of the Company.
"Cause" has the meaning set forth in Section IV.B(1).
"change in control of the Company" has the meaning set forth
in Section VI.
"Company" means Ferro Corporation, as modified by Section
VIII.A.
"Contract Term" has the meaning set forth in Section III.A.
"Date of Termination" has the meaning set forth in Section
IV.A.(2).
"Disabled" has the meaning set forth in Section IV.C.(1).
"Excise Tax" has the meaning set forth in Section V.A.(1).
"Escrow Account" has the meaning set forth in Section VI.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive" means the executive named in this Agreement.
"Firm" has the meaning set forth in Section V.A.(2) and refers
to certain Excise Tax matters.
"Good Reason" has the meaning set forth in Section IV.E.
"Gross-Up Payment" has the meaning set forth in Section
V.A.(1) and refers to certain Excise Tax matters.
"Incentive Compensation Plan" has the meaning set forth in
Section III.E.(1).
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"Normal Retirement Age" means the normal retirement age
provided for in the Company's Pension Plan.
"Notice of Termination" has the meaning set forth in Section
IV.A.(1).
"Payment" has the meaning set forth in Section V.A.(1) and
refers to certain Excise Tax matters.
"Pension Plan" means the Company's salaried employees'
retirement plan, or any successor plan thereto.
"Retirement" has the meaning set forth in Section IV.D.(1).
"Total Disability" means total disability as defined in the
Company's Pension Plan.
"Underpayment" has the meaning set forth in Section V.A.(2)
and refers to certain Excise Tax matters.
III. Provisions Applicable to the Contract Term
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A. Contract Term
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Except as otherwise provided in this Agreement, the Company and the
Executive agree that the Executive will remain in the employ of the Company for
a primary term ending on May __, 2000 and that this Agreement will
automatically continue after such primary term unless and until either party
shall have given the other at least 24 months prior written Notice of
Termination or, if earlier, until expiration of the Contract Term. The "Contract
Term" shall refer to the period commencing on the date hereof and ending on
May __, 2000 (or any continuation
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thereof pursuant to the preceding sentence); provided, however, that in no event
shall the Contract Term extend beyond the earliest to occur of (A) the
Executive's attaining Normal Retirement Age, (B) the date of death of the
Executive, and (C) the Date of Termination resulting from the termination of
this Agreement for Disability (as defined in Section IV.C.(1) hereof); and
provided, further, however, that, if a change in control of the Company (as
defined in Section VI hereof) occurs during the Contract Term, then, subject to
the preceding proviso in this sentence, the Contract Term shall not expire prior
to the second anniversary of the date of such change in control of the Company.
Nothing contained in this Agreement shall prevent the Company at any time
from terminating the Executive's right and obligation to perform service for the
Company or prevent the Company from removing the Executive from any position
which the Executive holds in the Company, subject to the obligation of the
Company to make payments and provide benefits if and to the extent required
under this Agreement, which payments and benefits shall be full and complete
liquidated damages for any such action taken by the Company. The Executive
specifically acknowledges that, except for this Agreement, his employment by the
Company is employment-at-will, subject to termination by the Executive, or by
the Company, at any time with or without cause. The Executive acknowledges that
such employment-at-will status cannot be modified except in a specific writing
which has been authorized or ratified by the Board.
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B. Nature of Duties
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(1) The Executive agrees to serve the Company during the
Contract Term. The Executive agrees to devote his full business time during
normal business hours to the business and affairs of the Company (except as
otherwise provided herein) and to use his best efforts to promote the interests
of the Company and to perform faithfully and efficiently the responsibilities
assigned to him in accordance with the terms of this Agreement to the extent
necessary to discharge such responsibilities, except for (i) service on
corporate, civic or charitable boards or committees not significantly
interfering with the performance of such responsibilities, and (ii) periods of
vacation and sick leave or other legitimate absences under Company benefit plans
and established practices.
(2) The Company agrees that, on or after a change in control
of the Company (as defined in Section VI hereof), it will not, without the
Executive's express written consent, (a) assign to the Executive duties
inconsistent with his current positions, duties, responsibilities and status
with the Company, or (b) change his titles as currently in effect, or (c) remove
him from, or fail to re-elect him to, any of such positions, except in
connection with the termination of his employment for Cause, Disability or
Retirement or as a result of his death or voluntary termination. Except as so
limited, the powers and duties of the Executive are to be more specifically
determined and set by the Company from time to time.
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C. Place of Employment
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The Executive's initial place of employment is at the Company's
principal executive offices in Cleveland, Ohio. The Company agrees that it will
not, without the Executive's express written consent, require the Executive to
be based anywhere other than Cuyahoga County, Ohio, or a county contiguous
thereto, except for required travel on the Company's business to an extent
substantially consistent with present business travel obligations.
D. Compensation
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(1) BASE SALARY. During the Contract Term, the Executive shall
receive an annual base salary (the "Base Salary"), payable in installments,
substantially in accordance with current practice, at an annual rate at least
equal to the aggregate annual Base Salary payable to the Executive as of the
date hereof. The Base Salary may be increased (but may not be decreased) at any
time and from time to time by action of the Board, and, if so increased, such
increased Base Salary shall thereafter be the Base Salary for the purposes of
this Agreement.
(2) INCENTIVE COMPENSATION. During the Contract Term, the
Company agrees to pay annual incentive compensation to the Executive in an
amount at least equal to the annual incentive compensation that would have been
payable to the Executive for such year in question under the Company's Incentive
Compensation Plan as in effect for such applicable year, and giving effect to
the highest position in the Company held by the Executive during the Contract
Term.
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E. Benefit Plans
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(1) During the Contract Term, the Company agrees to continue
the Company's Annual Incentive Compensation Plan as the same may be modified
from time to time but substantially in the form presently in effect (the
"Incentive Compensation Plan"). The Company agrees to continue the Executive as
a participant in the Incentive Compensation Plan on a basis at least equivalent
to the present basis of his participation for the calendar year in which the
effective date of this Agreement occurs.
(2) During the Contract Term, the Company agrees to continue
in effect any perquisite, benefit or compensation plan (in addition to the
Incentive Compensation Plan) including its pension plan, excess benefits plans,
supplemental retirement program for short service executives, dental plan, life
insurance plan, health and accident plan or disability plan in which the
Executive is currently participating (but excluding the Company's stock option
plan and performance share plan, participation in which shall be at the sole
discretion of the Company's Board of Directors, or any applicable committee
thereof) (such plans are collectively referred to with the Incentive
Compensation Plan as the "Benefit Plans"), or to maintain plans providing
substantially similar benefits; provided, however, that the Company may make
modifications in such Benefit Plans so long as such modifications (a) are
generally applicable to all salaried employees of the Company and (b) do not
discriminate against highly-paid employees of the Company.
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(3) During the Contract Term, except as permitted in the
proviso contained in paragraph (2) above, the Company agrees not to take any
action that would adversely affect the Executive's participation in, or
materially reduce the benefits under, any of the Benefit Plans.
(4) Benefits herein provided are in lieu of any severance
payment benefit otherwise provided under any other agreement, policy, or
practice provided by the Company and, in the event of an effective Notice of
Termination hereunder, are also in lieu of any obligations of the Company in
favor of the Executive with respect to vacation or vacation pay. The Executive
waives all rights to such payments under any such agreement, policy or practice
provided, however, that this waiver shall not extend to entitlements provided
under any disability insurance plan, retirement plan, excess benefit plan, or
applicable supplemental pension plan or agreement for short service executives
and any related Benefit Plans (including health and insurance plans), other than
those relating to severance or vacation.
F. Conflicting Interests
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Prior to the Date of Termination, the Executive agrees not to accept
any other employment or engage in any outside business or enterprise without the
Company's written consent. It is understood, however, that outside activities
are not prohibited provided they are legal; do not impair or interfere with the
conscientious performance of Company duties and responsibilities; do not involve
the misuse of the Company's
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influence, facilities or other resources; and do not reflect discredit upon the
good name and reputation of the Company.
G. Disclosure of Information
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During the Contract Term and thereafter, the Executive shall not reveal
any confidential information of the Company to anyone except those employees of
the Company entitled to receive such information, or as otherwise permitted
under any contract or commitment of the Company, or as otherwise authorized.
H. Certain Payments Upon the Occurrence of a Change in Control of
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the Company
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In the event a change in control of the Company (as defined in
Section VI hereof) occurs during the Contract Term, the Company shall pay to the
Executive, within five days thereafter, an amount in cash, with respect to each
grant of Performance Shares (as defined in the Company's Amended and Restated
1997 Performance Share Plan, as amended (the "Performance Share Plan"))
previously awarded to the Executive under the Performance Share Plan (or any
predecessor thereto) in respect of a Performance Period (as defined in the
Performance Share Plan) which had not expired immediately prior to such change
in control of the Company (Performance Shares awarded in respect of any such
Performance Period being referred to as "Outstanding Performance Shares"), which
amount shall be equal to the excess (but not less than zero) of (a) over (b),
where (a) equals the product of (1) the number of Outstanding Performance Shares
awarded to the Executive in respect of the applicable Performance Period, (2)
the "fair market value of the Common Stock" (as
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defined in the Performance Share Plan) and (3) a fraction (not to exceed one)
the numerator of which is the sum of (x) the number of days which had elapsed in
the applicable Performance Period as of the date of such change in control of
the Company plus (y) 730, and the denominator of which is the number of days in
such applicable Performance Period, and where (b) equals the value payable to
the Executive under the Performance Share Plan (or any predecessor thereto) in
respect of such Outstanding Performance Shares in connection with such change in
control of the Company. The provisions of this Section III.H. shall not affect
in any manner the determination of amounts payable to the Executive under the
Performance Share Plan (or any predecessor thereto).
IV. Provisions Applicable to Termination of Employment
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A. Notice of Termination; Date of Termination
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(1) Any termination of the Executive's employment by the
Company or the Executive shall be communicated by written Notice of Termination
to the other party thereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated. Furthermore, either the Executive or the Company may
give a Notice of Termination to the other party for the purpose of terminating
this Agreement, as such, without terminating the Executive's employment with the
Company, which Notice of Termination shall have
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the effect of terminating this Agreement at the expiration of the Contract Term
as in effect on the date of giving such Notice of Termination.
(2) "Date of Termination" shall mean the date on which the
Executive's right and obligation to perform employment services for the Company
shall terminate (subject to the right of the Company to accelerate such date
pursuant to Section III.A.) and shall be:
(a) If the Agreement is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day
period),
(b) If the Executive's employment is terminated by the Executive
for Good Reason, pursuant to Section IV.E., the date specified
in the Notice of Termination, which date (except with the
written consent of the Company to the contrary) shall not be
more than sixty (60) days after the date that the Notice of
Termination is given,
(c) The expiration or termination of the Contract Term, and
(d) If the Executive's employment is terminated by the Company for
Cause pursuant to Section IV.B.(1), the date on which a Notice
of Termination is given.
B. Termination for Cause
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(1) The Company may terminate the Executive's employment and
the Contract Term for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate employment hereunder only (a) if termination
shall have been the result of an act or acts by the Executive which have been
found in an applicable court to constitute a felony; or (b) if termination shall
have been the result of an act or acts of dishonesty by the Executive resulting
or intended to result directly
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or indirectly in significant gain or personal enrichment to the Executive at the
expense of the Company; or (c) upon the wilful and continued failure by the
Executive substantially to perform his duties with the Company (other than any
such failure resulting from incapacity due to mental or physical illness) after
a demand in writing for substantial performance is delivered by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties, and such failure results
in demonstrably material injury to the Company. The Executive's employment shall
in no event be considered to have been terminated by the Company for Cause if
such termination took place as the result of (a) bad judgment or negligence, or
(b) any act or omission believed in good faith to have been in or not opposed to
the interest of the Company. The Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
(after reasonable notice to the Executive and an opportunity for him, together
with his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board the Executive was guilty of conduct set forth above in
clauses (a), (b) or (c) of the second sentence of this paragraph and specifying
the particulars thereof in detail.
(2) If the Executive's employment shall be terminated for
Cause, the Company shall pay the Executive his full Base Salary through the Date
of Termination
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at the rate in effect at the time Notice of Termination is given
and the Company shall have no further obligations to the Executive under this
Agreement.
C. Termination for Disability
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(1) The Company may terminate this Agreement on account of the
Executive's "Disability" if the Executive is "Disabled." For purposes of this
Agreement, the Executive shall be considered Disabled only if, as a result of
his incapacity due to physical or mental illness, he shall have been absent from
his duties with the Company on a full-time basis for a period of six months and
within thirty (30) days after written Notice of Termination is given, he shall
not have returned to the full-time performance of his duties.
(2) If the Company terminates this Agreement because the
Executive is Disabled, the Company shall provide to the Executive (or his
successors) the benefits specified in Paragraph (3) (continued participation in
benefit plans) of Section IV.F. of this Agreement; provided, however, that for
this purpose the Contract Term shall be determined as of the Date of
Termination, but without regard to the termination of this Agreement by reason
of the Executive's Disability.
D. Termination Upon Retirement
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(1) This Agreement will terminate upon the Executive's
Retirement. For purposes of this Agreement, "Retirement" shall mean termination
of the Executive's employment at or after attaining Normal Retirement Age or
early retirement if effected
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in accordance with any retirement arrangement established with the Executive's
consent with respect to him.
(2) In the event this Agreement terminates by reason of the
Executive's Retirement, the Company shall pay to the Executive the amounts, and
provide to the Executive the benefits, specified in Paragraph (3) (continued
participation in benefit plans) of Section IV.F. of this Agreement.
(3) Notwithstanding the preceding provisions of this Section
IV.D., unless the Executive otherwise consents in writing, a termination of the
Executive's employment which occurs on or after the date of a change in control
of the Company (as defined in Section VI hereof) shall not be deemed to be a
termination of employment for Retirement.
E. Termination of Employment by the Executive for Good Reason
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(1) The Executive may terminate his employment for Good
Reason. For purposes of this Agreement, Good Reason will exist if any one or
more of the following occur:
(a) Failure by the Company to honor any of its
obligations under Sections III.B.2. (assignment of
duties, responsibilities, etc., election to
positions), III.C. (place of employment), III.D.
(compensation), III.E. (benefit plans), VI
(security) or VIII.A. (successors); or
(b) Any purported termination by the Company of the
Executive's employment that is not effected pursuant
to a Notice of Termination satisfying the
requirements of Section IV.A. above and, for purposes
of this Agreement, no such purported termination
shall be effective; or
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(c) The issuance by or on behalf of the Company,
on or after a change in control of the
Company (as defined in Section VI hereof),
of a Notice of Termination described in the
third sentence of Section IV.A.(1) hereof
which specifies that such Notice of
Termination is given for the purpose of
terminating this Agreement and which does
not serve to terminate the Executive's
employment with the Company substantially
concurrently therewith; or
(d) Voluntary resignation by the Executive at
any time during the ninety-day period
commencing on the first anniversary of a
change in control of the Company (as defined
in Section VI hereof).
F. Compensation Upon Termination Other Than for Cause
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(1) If the Company shall terminate the Executive's employment
other than pursuant to Sections IV.B. (Cause), IV.C. (Disability) or IV.D.
(Retirement) hereof or if the Executive shall terminate his employment for Good
Reason pursuant to Section IV.E. hereof, then the Company shall pay to the
Executive the following amounts:
(a) The Executive's Base Salary through the Date
of Termination at the rate in effect at the
time Notice of Termination is given;
(b) In a lump sum (in lieu of the installment
payments otherwise payable under this
Agreement), payable on or before the fifth
(5th) day following the Date of Termination,
an amount equal to the Executive's Base
Salary through the conclusion of the
Contract Term;
(c) In a lump sum (in lieu of the installment
payments otherwise payable under this
Agreement), payable on or before the fifth
(5th) day following the Date of Termination,
an amount equal to the Executive's annual
incentive compensation payments, applicable
to periods through the conclusion of the
Contract Term. For this purpose, the annual
incentive compensation amounts payable shall
be deemed to be thirty percent (30%) of the
Base Salary, or such greater percentage
thereof, as may be applicable to the
Executive, at target levels, under the
Incentive Compensation Plan as in effect (i)
immediately prior to the Notice of
Termination or (ii) immediately prior to a
change in control of the Company (as defined
in Section VI hereof), whichever is more
favorable to the Executive;
(d) In a lump sum, payable on or before the
fifth (5th) day following the Date of
Termination, an amount equal to the pro rata
portion of the Executive's annual incentive
compensation for the calendar year in which
the Date of Termination occurs, such amount
to be determined by multiplying the
Executive's annual incentive compensation
amount (as described below) by a fraction,
the numerator of which is the number of days
in such calendar year which had elapsed as
of the Date of Termination and the
denominator of which is 365; provided,
however, that this Section IV.F.(1)(d) shall
have effect only if the Date of Termination
occurs in a calendar year following the
calendar year in which occurs a change in
control of the Company (as defined in
Section VI hereof). For purposes of this
paragraph, the Executive's annual incentive
compensation amount shall be equal to the
amount determined pursuant to the second
sentence of Section IV.F.(1)(c) above; and
(e) The Company shall also pay all legal fees
and expenses incurred as a result of such
termination (including all such fees and
expenses, if any, incurred in seeking to
obtain or enforce any right or benefit
provided by this Agreement, or in
interpreting this Agreement).
(2) If the Company shall terminate the Executive's employment
other than pursuant to Sections IV.B. (Cause), IV.C. (Disability) or IV.D.
(Retirement) hereof or if the Executive shall terminate his employment for Good
Reason pursuant to Section IV.E. hereof, then the Company shall pay him in one
sum in cash, payable on or before the fifth (5th) day following the Date of
Termination, an amount equal to the present value as of the Date of Termination
(calculated at a discount rate equal to the discount rate used at the Date of
Termination for computing the present value of commuted payments under the
Pension Plan) of (a) the lump sum value (determined
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as of the Executive's Normal Retirement Age, using the same methods and
assumptions used at the Date of Termination for purposes of the Pension Plan, of
the retirement pension to which the Executive would have been entitled under the
terms of the Pension Plan, excess benefits plan and supplemental retirement
program for short service executives in which he participates (as in effect on
the date of this Agreement) if the Executive's employment had continued through
the conclusion of the Contract Term, at compensation levels consistent with
those set forth in paragraphs (1)(b) (Base Salary) and (c) (Incentive
Compensation) above (and including any other compensation, if any, which is to
be considered under the formulas applicable to such plans), assuming
commencement of payment of the Executive's pension at Normal Retirement Age,
reduced by (b) the lump sum value (determined as of the Executive's Normal
Retirement Age using the methods and assumptions hereinabove specified) of the
retirement pension, if any, to which the Executive will be entitled under the
terms of the Pension Plan, excess benefits plan and supplemental retirement
program for short service executives in which the Executive participates (as in
effect on the Date of Termination), based upon termination of the Executive's
employment as of the Date of Termination and assuming commencement of payment of
the Executive's pension benefits at his Normal Retirement Age. The lump sum
value to be calculated under clause (a) of the immediately preceding sentence
shall be determined (y) under the assumption that the Executive is fully vested
in his retirement pension under the Pension Plan, excess benefits plan and
supplemental retirement
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program for short service executives; and (z) without
regard to any amendments to any of such plans, which amendments are adopted on
or after the date of a change in control of the Company (as defined in Section
VI hereof), to the extent any such amendments adversely affect in any manner the
computation of benefits thereunder or are otherwise adverse to the Executive.
(3) Unless the Executive is terminated for Cause, the Company
shall maintain in full force and effect, for the Executive's continued benefit
throughout the Contract Term, all active and retired employee Benefit Plans in
which he was entitled to participate immediately prior to the Date of
Termination (except as specified in paragraphs (2) (right of Company to make
non-discriminatory changes in plans) and (4) (this Agreement in lieu of other
plans as to severance and vacation) of Section III.E. of this Agreement),
provided that continued participation is possible under the general terms and
provisions of such plans and programs. In the event that participation in any
such plan or program is barred, the Company shall arrange to provide him with
benefits substantially similar to those which he is entitled to receive under
such Benefit Plans. Unless the Executive is terminated for Cause, if prior to
the expiration of the Contract Term the Executive attains Normal Retirement Age
(or earlier retirement age should he so elect) as defined in the Pension Plan in
effect on the Date of Termination hereunder, he shall have the right at any time
prior to the expiration of the Contract Term to so retire and the Company shall
thereafter maintain in full force and effect, for the Executive's continued
benefit, all retired employee Benefit Plans applicable to him,
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as in effect immediately prior to the Date of Termination (except as specified
in paragraphs (2) (right of Company to make non-discriminatory changes in plans)
and (4) (this Agreement in lieu of other plans as to severance and vacation) of
Section III.E. of this Agreement). If the termination of the Executive's
employment occurs on or after a change in control of the Company (as defined in
Section VI hereof), (a) the Company's obligation to maintain Benefit Plans
pursuant to this Section IV.F.(3) shall be determined, on a plan-by-plan basis,
based on the terms of the applicable Benefit Plan as in effect (i) immediately
prior to such change in control of the Company or (ii) immediately prior to the
Date of Termination, whichever is more favorable to the Executive, and (b) the
Executive shall be treated as having remained in employment throughout the
remainder of the Contract Term for purposes of determining his rights under any
such Benefit Plans applicable to retired employees.
(4) Upon termination of employment for any reason other than
pursuant to Sections IV.B. (Cause), IV.C. (Disability) or IV.D. (Retirement), or
by reason of the Executive's death, the Company will provide to the Executive,
at the cost and expense of the Company, the services of an outplacement firm to
be mutually agreed upon between the Company and the Executive.
G. Compensation Upon Disability
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During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, he shall
continue to receive his full Base Salary and incentive compensation at the rate
then in effect until this
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Agreement is terminated pursuant to Section IV.C. hereof. Thereafter, his
benefits shall be determined in accordance with the Company's Pension Plan,
excess benefits plan, supplemental retirement program for short service
executives and disability insurance plans in which the Executive participates,
or a substitute plan then in effect; provided, however, that if the Executive's
employment is terminated pursuant to Section IV.C. hereof following a change in
control of the Company (as defined in Section VI hereof), the Company shall pay
to the Executive (a) in a cash lump sum on or before the fifth (5th) day
following the Date of Termination, the amounts described in Sections IV.F(1)(a)
and (d) hereof, and (b) during each month commencing with the month in which
occurs the Date of Termination and through and including the month in which
occurs the expiration of the Contract Term (for this purpose the Contract Term
shall be determined as of the Date of Termination, but without regard to the
Executive's termination for Disability), an aggregate amount in cash equal to
the excess (but not less than zero) of (i) one-twenty-fourth of the aggregate
amount determined under Sections IV.F.(1)(b) and (c) hereof over (ii) the
aggregate amount received by the Executive during such month under the Company's
long-term disability plans.
H. Compensation Upon Death
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In the event this Agreement terminates by reason of the Executive's
death following a change in control of the Company (as defined in Section VI
hereof), the Company shall pay to the Executive's legal representatives or
estate or as may be
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directed by the legal representatives of his estate, as the
case may be, in a lump sum payable on or before the fifth (5th) day following
the Executive's death, an amount in cash equal to the amounts determined under
Sections IV.F.(1)(a), (b), (c) and (d) hereof (and for the purpose of
determining such amounts payable under Sections IV.F.(1)(b) and (c), the
Contract Term shall be determined as of the date of the Executive's death, but
without regard to such death).
I. Restrictions on Competition.
(1) The Executive will not, at any time during the
Restricted Period (as defined in Section IV.I.(2)
below), accept employment with, own an interest in,
form a partnership or joint venture with, consult
with or otherwise assist any person or enterprise
that manufactures or sells products ("Competitive
Products") similar to, or competitive with, the
products manufactured or sold by the Company on the
Date of Termination.
(2) The "Restricted Period" means:
(a) 24 months after the Date of Termination; and
(b) an additional 12 months thereafter (the
"Additional Period") if:
(i) the Company has not terminated the
Executive's employment in accordance
with Section IV.C. (Disability);
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(ii) the Company elects to impose the
Additional Period by providing to
the Executive written notice of such
election not later than two months
after the termination of the
Executive's employment; and
(iii) the Company pays the Executive, in
twelve (12) monthly installments
during the Additional Period, an
aggregate amount equal to the
Executive's Base Salary for the
calendar year in which the
Executive's employment terminated;
and
(c) in addition to the time period(s) set
forth in (a) and, if applicable, (b)
above, the remaining period of time, if
any, until the Executive is 60 years old
if:
(i) this Agreement has terminated by
reason of the Executive's
Retirement before the Normal
Retirement Age;
(ii) the Executive is an officer of the
Company;
(iii) the Executive has elected to receive
his or her early retirement benefit
on the basis of the increased
"Post-1995 Factors" set forth in
Section 4 of the Company's Excess
Benefits Plan, as such provision may
be amended from time to time.
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22
(3) Section IV.I.(1) above will not apply if the relevant
person or enterprise acquires a business or product
line that manufactures or sells Competitive Products
after the commencement of the Executive's employment
or other relationship with such person or enterprise
and the Executive does not participate in any way in
the business of the Competitive Products for 24
months after the termination of the Executive's
employment and, at the request of the Company, the
Executive and the relevant person or enterprise
certify to the Company in writing that the Executive
has and will comply with the restrictions of this
Section IV.I.(3).
(4) Nothing in this Section IV.I. eliminates or affects
any right to payments or benefits that the Executive
otherwise has under other provisions of this Article
IV; and nothing in this Section IV.I. gives the
Executive the right to any payment or benefit under
other provisions of this Article IV that he or she
does not otherwise have.
J. Mitigation
----------
The Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for
herein be reduced by any
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23
compensation earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise.
V. Certain Tax Matters
-------------------
A. Additional Payments
-------------------
(1) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined (as hereafter provided)
that any payment or distribution to or for the Executive's benefit, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement (including without limitation any stock option
agreement or Performance Share Plan Participant agreement), or similar right (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986 (or any successor provision thereto), or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive an additional
payment or payments (a "Gross-Up Payment") in an amount such that, after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
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(2) Subject to the provisions of Section V.A.(5), all
determinations required to be made under this Section V.A., including whether an
Excise Tax is payable by the Executive, the amount of such Excise Tax, whether a
Gross-Up Payment is required, and the amount of such Gross-Up Payment, shall be
made by a nationally-recognized legal or accounting firm (the "Firm") selected
by the Executive in the Executive's sole discretion. The Executive agrees to
direct the Firm to submit its determination and detailed supporting calculations
to both the Executive and the Company as promptly as practicable. If the Firm
determines that any Excise Tax is payable by the Executive and that a Gross-Up
Payment is required, the Company shall pay the Executive the required Gross-Up
Payment within ten business days after receipt of such determination and
calculations. If the Firm determines that no Excise Tax is payable by the
Executive, it shall, at the same time as it makes such determination, furnish
the Executive with an opinion that the Executive has substantial authority not
to report any Excise Tax on the Executive's federal income tax return. Any
determination by the Firm as to the amount of the Gross-Up Payment shall be
binding upon the Executive and the Company. As a result of the uncertainty in
the application of Section 4999 of the Internal Revenue Code of 1986 (or any
successor provision thereto) at the time of the initial determination by the
Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made (an "Underpayment"). In the event that
the Company exhausts its remedies pursuant to Section V.A.(5) hereof and the
Executive thereafter
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is required to make a payment of any Excise Tax, the Executive may direct the
Firm to determine the amount of the Underpayment (if any) that has occurred and
to submit its determination and detailed supporting calculations to both the
Executive and the Company as promptly as possible. Any such Underpayment shall
be promptly paid by the Company to the Executive, or for the Executive's
benefit, within ten business days after receipt of such determination and
calculations.
(3) The Executive and the Company shall each provide the Firm
access to and copies of any books, records and documents in the possession of
the Company or the Executive, as the case may be, reasonably requested by the
Firm, and otherwise cooperate with the Firm in connection with the preparation
and issuance of the determination contemplated by Section V.A.(2) hereof.
(4) The fees and expenses of the Firm for its services in
connection with the determinations and calculations contemplated by Section
V.A.(2) hereof shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within ten business days after receipt
from the Executive of a statement therefor and reasonable evidence of the
Executive's payment thereof.
(5) The Executive agrees to notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as promptly as practicable but no later than ten (10) business days after the
Executive actually
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receives notice of such claim. The Executive agrees to further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by the Executive). The
Executive agrees not to pay such claim prior to the earlier of (a) the
expiration of the 30-calendar-day period following the date on which the
Executive gives such notice to the Company and (b) the date that any payment
with respect to such claim is due. If the Company notifies the Executive in
writing at least five business days prior to the expiration of such period that
it desires to contest such claim, the Executive agrees to:
(a) provide the Company with any written records or documents
in the Executive's possession relating to such claim reasonably
requested by the Company;
(b) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including without limitation accepting legal representation with
respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(c) cooperate with the Company in good faith in order
effectively to contest such claim; and
(d) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, from and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and
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27
expenses. Without limiting the foregoing provisions of this Section V.A.(5), the
Company shall control all proceedings taken in connection with the contest of
any claim contemplated by this Section V.A.(5) and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim (provided,
however, that the Executive may participate therein at the Executive's own cost
and expense) and may, at its option, either direct the Executive to pay the tax
claimed and xxx for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and xxx for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest or
penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the Executive's taxable year with respect to
which the contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of any such contested claim
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
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entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(6) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section V.A.(5) hereof, the Executive
receives any refund with respect to such claim, the Executive agrees (subject to
the Company's complying with the requirements of Section V.A.(5) hereof) to
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable thereto). If, after
the Executive's receipt of an amount advanced by the Company pursuant to Section
V.A.(5) hereof, a determination is made that the Executive is not entitled to
any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) calendar days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid pursuant to this Section V.A.
VI. Security
--------
To secure payment of the benefits provided for in this
Agreement, the Company agrees forthwith to establish an irrevocable escrow
account (the "Escrow Account") at National City Bank (the "Escrow Agent"),
Cleveland, Ohio, or, in the event that National City Bank shall resign, any
other financial institution satisfactory to the Company and the Executive (or
the Executive's executor or other personal
-29-
29
representative) or appointed by a court of competent jurisdiction and to keep on
deposit in the Escrow Account such amount, if any, as shall at all times be at
least equal to the required security hereinafter provided for. The maximum
amount of required security to be kept on deposit at any time shall be (A) the
sum of $657,800 (the "Maximum Amount") or (B) if there has been determination
with the Executive's written consent or by a final arbitral award rendered in
accordance with this Agreement that a specific lesser amount fully secures the
Company's obligations under this Agreement, then such specific lesser amount or,
in the case that the Company has fully performed its obligations under this
Agreement, nothing. Subject to the provisions hereof, the Maximum Amount of
required security shall be kept on deposit at all times after (i) the expiration
of five days following the occurrence of a "potential change in control of the
Company" or (ii) a "change in control of the Company" (as such terms are
hereinafter defined), whichever occurs earlier. For purposes of this Agreement,
a "change in control of the Company" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(1) Any "person" (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing twenty-five percent (25%)
or more of the combined voting power of the Company's then outstanding voting
securities; or
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30
(2) During any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company and any new director (other than a director designated by a person who
has entered into an agreement or arrangement with the Company to effect a
transaction described in clause (1) or (3) of this sentence) whose appointment,
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose appointment,
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board of Directors of the Company; or
(3) There is consummated a merger or consolidation of the
Company or a subsidiary thereof with or into any other corporation, other than a
merger or consolidation which would result in the holders of the voting
securities of the Company outstanding immediately prior thereto holding
securities which represent immediately after such merger or consolidation more
than fifty (50%) of the combined voting power of the voting securities of either
the Company or the other entity which survives such merger or consolidation or
the parent of the entity which survives such merger or consolidation; or
(4) There is consummated a sale or disposition by the Company
of all or substantially all the Company's assets.
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31
For purposes of this Agreement, a "potential change in control of the Company"
shall be deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(a) any person is or becomes the beneficial owner,
directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the
combined voting power of the Company's then
outstanding voting securities; or
(b) the Company enters into an agreement, the
consummation of which would result in the occurrence
of a change in control of the Company; or
(c) any person publicly announces an intention to take or
to consider taking actions which, if consummated,
would constitute or result in a change in control of
the Company; or
(d) any person commences a solicitation (as defined in
Rule 14a-1 of the General Rules and Regulations under
the Exchange Act) of proxies or consents which has
the purpose of effecting or would (if successful)
result in a change in control of the Company; or
(e) a tender or exchange offer for voting securities of
the Company, made by a person (other than the
Company, any subsidiary thereof, any employee benefit
plan of the Company or any person organized,
appointed or established by the Company for or
pursuant to the terms of any such plan), is first
published or sent or given (within the meaning of
Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act).
Until the Maximum Amount of required security is required to be kept on
deposit, the Company shall only be obliged to maintain on deposit in the Escrow
Account an amount (the "Required Security") at least equal to sixty percent
(60%) of the Maximum Amount of required security; provided, however, that if a
potential change in control of the Company shall occur prior to a change in
control of the
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32
Company and if a change in control of the Company does not occur within twelve
months after the most recent occurrence of a potential change in control of the
Company, the Escrow Agent shall be entitled, upon receipt of a written request
by the Company, to return to the Company any amounts in excess of the Required
Security (or reduce the amount of any letter of credit to an amount equal to the
Required Security). Except as provided in the immediately preceding sentence and
in the penultimate paragraph of this Section VI, amounts deposited in the Escrow
Account shall be paid out by the Escrow Agent only to the Executive, in such
amounts as the Executive shall certify to the Escrow Agent as amounts that the
Company is in default in paying the Executive under this Agreement, or to the
Company, to the extent that the amount on deposit exceeds the maximum amount of
required security as specified in joint written instructions from the Executive
and the Company to the Escrow Agent or in a final arbitral award rendered
pursuant to Section VII hereof.
The Company shall have the right, at any time and from time to time, to
instruct the Escrow Agent to invest all or any or any part of the funds in the
Escrow Account in time deposits or certificates of deposit with, or repurchase
or other obligations of, National City Bank, in its individual corporate
capacity, or any of its domestic or foreign branches, or any other "bank" (as
determined by the Company), or obligations issued or guaranteed by the United
States or any of its agencies or instrumentalities, provided that no such
investment shall be for a period in excess of ninety (90) days. The Escrow Agent
shall have no liability whatsoever for following the instructions of
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the Company regarding any such investment, or for any loss in value of the
Escrow Account as a consequence of any such investment or the liquidation
thereof.
The Company may meet its obligation to keep amounts on deposit in the
Escrow Account through (a) deposits of assets; (b) one or more letters of credit
deposited in escrow; or (c) any combination of the foregoing. The Company shall
have right, at any time and from time to time, to substitute one form of
permitted deposit in the Escrow Account for another form of permitted deposit in
the Escrow Account.
Intending that the Escrow Agent and its successors and assigns shall
have the right to rely hereon, the Executive consents to the agreement
pertaining to the Escrow Account to be maintained pursuant to this Section VI
(the "Escrow Agreement") substantially in the form attached hereto as Exhibit A,
and consents to the amendment and restatement, pursuant to the Escrow Agreement,
of all prior escrow agreements which have been made between the Company and
National City Bank (in any capacity) and of which the Executive is a
beneficiary. The Executive further consents to amendments, modifications,
restatements and clarifications of the Escrow Agreement from time to time, so
long as, after giving effect to each such amendment, modification, restatement
or clarification, the then aggregate amount (whether in the form of cash,
investments which the Company has instructed the Escrow Agent to make as
hereinbefore provided (the amount of which shall be determined, in each case, at
the time of the investment), amounts available to be drawn by the Escrow Agent
under one or more letters of credit, or any combination of the foregoing)
credited to
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the Escrow Account by the Escrow Agent would not be less than the
required security provided for in this Section VI. The Escrow Agent and its
successors and assigns shall have the right to rely upon such consent of the
Executive.
VII. Intellectual Property
---------------------
A. Inventions
----------
Executive shall disclose promptly to the Company or its nominee any and
all inventions, discoveries, ideas, and improvements (whether patentable or
unpatentable) conceived, or reduced to practice by Executive, or made by
Executive (either solely or jointly with others) during the period of employment
(whether or not during regular working hours) and related to the business or
activities of the Company, and assigns and agrees to assign all his/her right,
title and interest therein to the Company or its nominee; whenever requested to
do so by the Company, Executive shall execute any and all applications,
assignments or other instruments which Executive shall deem necessary to apply
for and obtain Letters Patent of the United States or any foreign country or to
protect otherwise the Company's interest therein. Executive further agrees, upon
the Company's request and without additional compensation therefor, to cooperate
in offering testimony on behalf of the Company in any inter partes proceedings
involving any issued or pending patents or trademarks of the Company in the U.S.
or abroad and for perfecting, affirming, maintaining and recording the Company's
complete ownership and title thereto, and to otherwise cooperate in all
proceedings and matters relating thereto. These obligations shall continue
beyond the termination of employment with respect to inventions, discoveries and
improvements conceived or made by Executive, during the period of employment,
and shall be binding upon Executive's assigns, executors, administrators and
other legal representatives. Executive further agrees that title to any and all
copyrights, copyright registrations and copyrightable subject matter which
occurs as a result of employment by the Company shall be the sole and exclusive
property of the Company, and that such comprise works made for hire. Executive
hereby assigns and agrees to assign all of said copyrights to the Company and
agrees that the Company may exploit said copyrights in its absolute discretion
and need not account to Executive for any proceeds derived from such
exploitation.
B. Technical Information
---------------------
Executive expressly covenants and agrees that he or she will not at any
time during, or after the termination of, employment use for his or her own
benefit or for the benefit of others, or reveal, divulge or in any way make
known to any other person, firm or corporation any physical or chemical formula,
composition, admixture or blend of components owned by the Company, or the
method, process, technique, or manner of manufacturing, compounding or preparing
any of the products manufactured by the Company from any such formula,
composition, admixture or blend; or sell, exchange or give away, or otherwise
disclose any formula, composition, admixture or blend, now or hereafter owned by
the Company, whether the same shall or may have been originated, discovered or
invented by the Executive or otherwise; or use for Executive's own benefit or
for the benefit of others, or reveal, divulge, publish or make known to any
person, firm or corporation any secret or confidential information (including,
without limitation, business and financial data and information) whatsoever used
by the Company in connection with its business and the Company may apply for and
have an injunction restraining the breach or the threatened breach of any of
these covenants, and further pursue its remedy at law in this regard.
C. Documentation
-------------
During or subsequent to the course of employment, Executive will not
copy, duplicate or otherwise reproduce, or permit copying, duplicating or
otherwise reproducing any drawings, blueprints, manuals, computer software,
letters, notes, notebooks, reports, specifications, formulas, admixtures, or
blends, or any other documentation owned by the Company and relating to the
Company's business which, from time to time, may have come into the custody,
control or temporary possession of Executive, except at the express direction of
his/her immediate superior. And, the Executive expressly covenants and warrants,
upon termination of his/her employment for any reason, that he/she shall
promptly deliver to the Company any and all copies in Executive's custody,
control or possession of any and all said drawings, blueprints, manuals,
computer software, letters, notes, notebooks, reports, formulas, compositions,
admixtures or blends. And upon said termination, by signing the Release and
Reaffirmation referenced in Section IX.D below, Executive warrants that no
duplicates, copies or reproductions as set forth in this Paragraph C, which were
ever under Executive's control or temporary possession, are in existence, save
those he/she has returned to the Company hereunder. Further, upon signing the
Release and Reaffirmation referenced in Section IX.D below, Executive warrants
that no originals, duplicates, copies or reproductions as set forth in this
Paragraph C, which were ever under Executive's control or temporary possession,
were ever, nor will they ever be, displayed, disclosed or revealed in any way by
Executive to any third party, at any time, nor to any unauthorized Executive of
the Company without the express prior written approval of Executive's immediate
superior.
D. Business Information
--------------------
Executive agrees that all information relating to the Company's
customers, vendors, and suppliers (including, without limitation, the names,
addresses, telephone numbers, price lists, requirements and preferences of
customers, vendors and suppliers of the Company) is confidential and proprietary
information of the Company and that Executive will not, either directly or
indirectly, use or disclose to any person, firm, or corporation such information
about any of the present customers, vendors or suppliers of the Company or any
other customers, vendors or suppliers of the Company with whom Executive has
become acquainted during Executive's employment with the Company, and that,
during the period of three (3) years immediately after Executive's termination
of employment with the Company, for whatsoever reason, Executive will not
directly or indirectly, either on Executive's behalf or for any other person,
firm or corporation, solicit, divert or otherwise attempt to take away any of
the customers, vendors or suppliers of the Company.
VIII. Arbitration
-----------
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Cleveland, Ohio in
accordance with the rules of the American Arbitration Association then in
effect; provided that all arbitration expenses shall be borne by the Company.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
IX. Miscellaneous
-------------
A. Successors, Binding Agreement
-----------------------------
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement
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and shall entitle the Executive to compensation from the Company in the same
amount and on the same terms as would apply if the Executive terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid that executes and delivers the agreement provided for in
this section or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount payable hereunder remains
unpaid, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to his estate.
B. Notice
------
Notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
by United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Secretary of the Company, or to
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36
such other address as either party may have furnished to the other in writing in
accordance herewith.
C. Waiver and Amendment; Governing Law
-----------------------------------
No provisions of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing signed by
the Executive and such officer as may be specifically designated by the Board
(which shall in any event include the Company's Chief Executive Officer). No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreement or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement, and this Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof. Without limiting the generality of the foregoing, this Agreement
supersedes and replaces in its entirety any prior agreement relating to the
subject matter hereof (other than agreements between the Executive and the
Company which constitute Benefit Plans). The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Ohio.
D. Release and Reaffirmation
-------------------------
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37
In connection with any termination of the Executive's employment prior
to a change in control of the Company (as defined in Section VI hereof), the
Company may, as a condition to the payment by the Company to the Executive of
any post-employment benefits under this Agreement, condition such payment upon
the execution and delivery by the Executive to the Company of:
(1) A release, in form reasonably acceptable to the Company,
releasing the Company from any further obligations to the Executive, except for
obligations under Benefit Plans which remain in favor of the Executive and any
other remaining obligations under the specific terms of this Agreement or any
other written agreement in effect between the Company and the Executive; and
(2) A reaffirmation by the Executive of his obligations under
this Agreement and any other agreement theretofore in effect between the
Executive and the Company relating to confidentiality, restrictions on
competition or intellectual property rights.
This Section IX.D shall not apply in connection with any termination
of the Executive's employment on or after the date on which a change in control
of the Company (as defined in Section VI hereof) shall have occurred.
E. Validity
--------
The invalidity or unenforceability of any one or more provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
-38-
38
F. Certain Obligations of the Company
----------------------------------
All obligations of the Company to make payments and provide benefits
under this Agreement shall survive the expiration of the Contract Term.
G. Counterparts
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
FERRO CORPORATION
BY:
---------------------------------
------------------------------------
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