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