UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 23, 2010
Ferro Corporation
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Ohio
|
|
1-584
|
|
34-0217820
|
|
|
|
|
|
(State or other jurisdiction
|
|
(Commission
|
|
(I.R.S. Employer
|
of incorporation)
|
|
File Number)
|
|
Identification No.)
|
|
|
|
1000 Lakeside Avenue,
Cleveland, Ohio
|
|
44114
|
|
|
|
(Address of principal
executive offices)
|
|
(Zip Code)
|
Registrants telephone number, including area code: 216-641-8580
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
|
|
|
o
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
o
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
o
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
o
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
Item 5.02.
|
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
|
(e) On June 23, 2010, the Compensation Committee of the Board of Directors of Ferro
Corporation (the Committee) approved with immediate effect a formal separation policy for certain
senior executives.
The policy outlines the expected separation payments to certain senior executives if their
employment is terminated without cause or if an executive officer terminates his or her
employment for good reason. Under the policy, eligible senior executives will receive the
following benefits:
|
|
|
a lump sum payment equal to 24 months of salary and target level bonus in
the case of the Chief Executive Officer (the CEO) or 18 months of salary and target
level bonus for certain other senior executives;
|
|
|
|
a pro-rated bonus for the portion of the year of termination that the
executive officer was employed based on actual performance;
|
|
|
|
continuation of health benefits for 24 months for the CEO or 18 months for
certain other executive officers; and
|
|
|
|
outplacement services for 24 months in an amount not to exceed $25,000 in the
aggregate for the CEO or 12 months in an amount not to exceed $10,000 in the aggregate
for certain other executive officers.
|
Payments are designed to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the Code).
Separation benefits under the policy are payable only if (i) the executive officer has executed an
agreement for non-competition, non-solicitation, confidentiality, non-disparagement (and, if
specified by the Company, arbitration) and a release of all claims that the executive may have
against the Company, its officers, fiduciaries, directors, agents and employees and (ii) the
executive agrees to provide reasonable assistance and cooperation with the Company concerning
business or legal related matters about which the executive possesses relevant knowledge or
information. The Compensation Committee may modify or terminate this policy from time to time;
however, any modification or termination will not affect the rights of any executive whose
termination or departure preceded such modification or termination.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference
to the text of the separation policy, which is filed as Exhibit 10.1 and is incorporated, herein,
by reference.
Item 9.01. Financial Statements and Exhibits.
|
(d)
|
|
Exhibits
|
|
|
|
|
Exhibit 10.1: Ferro Corporation Executive Separation Policy
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
Ferro Corporation
|
|
June 28, 2010
|
By:
|
/s/ Mark H. Duesenberg
|
|
|
|
Name:
|
Mark H. Duesenberg
|
|
|
|
Title:
|
Vice President, General Counsel and
Secretary
|
|
Exhibit Index
|
|
|
Exhibit No.
|
|
Description
|
10.1
|
|
Ferro Corporation Executive Separation Policy
|
Exhibit 10.1
Ferro Corporation
Executive Separation Policy
Adopted June 23, 2010
1. Purpose
Ferro Corporation (the Company) seeks to attract and retain the most qualified and capable
professionals to serve in key executive positions to maximize the value of the Company for the
benefit of the Companys stockholders. To achieve this goal, the Company has established this
Executive Separation Policy (this Policy) effective June 23, 2010 (the Effective Date) to
provide such employees with financial security and sufficient incentive to accept and continue
employment. This Policy describes the separation pay and benefits that the Company will provide to
Covered Executives (as defined below) if their employment with the Company terminates under certain
circumstances. The Company also seeks to ensure that the separation process is handled
professionally and efficiently.
2. Application to Covered Employees
|
A.
|
|
This Policy applies to the Chief Executive Officer and other members of the Companys
Senior Management Committee, which as of the Effective Date, consists of: (i) the Chief
Financial Officer, (ii) the Operating Group Vice President(s), (iii) the General Counsel
and (iv) the Vice President, Human Resources (collectively, the Covered Executives).
|
|
|
B.
|
|
The Compensation Committee of the Companys Board of Directors (the Compensation
Committee) may, from time to time, designate other persons holding other executive
positions who are not members of the Companys Senior Management Committee as Covered
Executives under this Policy and the level of severance pay and benefits that such persons
shall receive under this Policy.
|
3. Termination of Employment
The Company may terminate a Covered Executives employment with the Company, with or without
Cause and a Covered Executive may terminate his or her employment with the Company for or without
Good Reason, subject, however, in each case, to the terms and conditions of any written employment
agreement between the Covered Executive and the Company.
A. Termination by Company for Cause or by Covered Executive Without Good Reason
If the Company terminates a Covered Executives employment with the Company for Cause, or a
Covered Executive terminates his or her employment with the Company without Good Reason, the
Covered Executive will be entitled to: (1) all earned but unpaid compensation for time worked
through the Termination Date, to be paid on the Payment Date; and (2) any rights and benefits (if
any) provided under plans and programs of the Company, determined in accordance with the applicable
terms and provisions of such plans and programs, including, without limitation, earned but unused
vacation (the payments described in this Section 3.A are collectively referred to as the Accrued
Obligations). Other than payment of the Accrued Obligations, a Covered Executive whose employment
with the Company terminates as described in this Section 3.A shall not be entitled to receive any
other severance pay or benefits. Nothing in the foregoing is intended to limit a Covered
Executives ability to continue participating in the Companys group health, dental and vision
plans for the applicable COBRA continuation period, provided that the Covered Executive properly
elects COBRA continuation coverage and pays the applicable COBRA premiums.
B. Termination by Company Without Cause or by Covered Executive for Good Reason
If the Company terminates a Covered Executives employment with the Company without Cause, or
a Covered Executive terminates his or her employment with the Company for Good Reason, the Company
will, subject to the terms and conditions of this Policy, provide the severance pay and benefits
set forth below to the Covered Executive
based on the Covered Executives position on the date of termination.
1
|
(1)
|
|
If the Covered Executive is the Chief Executive Officer, the Covered Executive
will receive the following severance pay and benefits:
|
|
(a)
|
|
the Accrued Obligations;
|
|
|
(b)
|
|
a lump sum amount equal to twenty-four (24) months of the Chief
Executive Officers then-current base salary (or, if greater, the base salary
immediately prior to any reduction constituting Good Reason), to be paid on the
Payment Date;
|
|
|
(c)
|
|
a lump sum amount equal to two (2) times the annual incentive that the
Chief Executive Officer would have earned under the Companys annual incentive plan
for the year in which the termination occurred, assuming that performance had been
attained at the target level as based on a percentage of the Chief Executive
Officers then-current base salary (or, if greater, the base salary immediately
prior to any reduction constituting Good Reason), to be paid on the Payment Date;
|
|
|
(d)
|
|
an amount equal to the annual incentive (if any) the Chief Executive
Officer would have earned under the Companys annual incentive plan for the year in
which termination occurred if he or she was employed by the Company on the last day
of that year, based on the actual level of performance attained for that year and
prorated by multiplying this amount by a fraction, the numerator of which is equal
to the number of days which have elapsed in such year through the Termination Date
and the denominator of which is 365, to be paid at the same time as annual
incentive payments are made to current similarly situated executives of the
Company;
|
|
|
(e)
|
|
if the Chief Executive Officer is enrolled in the Companys medical,
dental and/or vision plan as of the Termination Date, the Chief Executive Officer
and his or her spouse and dependents (if likewise so-enrolled as of the Termination
Date) will continue to participate in those plans (whichever applicable) in
accordance with the terms of such plans as they may be amended from time to time,
at the same cost to the Chief Executive Officer as would be incurred by similarly
situated active employees (which may change from time-to-time) until (i) the date
the Covered Executive becomes eligible for any medical, dental, or vision coverage
provided by another employer or, if earlier, (ii) twenty-four (24) months following
the Termination Date (the parties agree that the COBRA continuation period shall
not begin until after the expiration of the periods set forth herein) ; and
|
|
|
(f)
|
|
reasonable outplacement services by a firm selected by the Company, at
the expense of the Company, in an amount not to exceed $25,000, for a period
lasting not longer than two (2) years after the Termination Date.
|
|
(2)
|
|
If the Covered Executive is not the Chief Executive Officer, the Covered
Executive will receive the following severance pay and benefits:
|
|
(a)
|
|
the Accrued Obligations;
|
|
|
(b)
|
|
a lump sum amount equal to eighteen (18) months of the Covered
Executives then-current base salary (or, if greater, the base salary immediately
prior to any reduction constituting Good Reason), to be paid on the Payment Date;
|
|
|
(c)
|
|
a lump sum amount equal to one and one-half (1.5) times the annual
incentive that the Covered Executive would have earned under the Companys annual
incentive plan for the year in which the termination occurred, assuming that
performance had been attained at the target level as based on a percentage of the
Covered Executives then-current base salary (or, if greater, the base salary
immediately prior to any reduction constituting Good Reason), to be paid on the
Payment Date;
|
2
|
(d)
|
|
an amount equal to the annual incentive (if any) the Covered Executive
would have earned under the Companys annual incentive plan for the year in which
termination occurred if he or she was employed by the Company on the last day of
that year, based on the actual level of performance attained for that year and
prorated by multiplying this amount by a fraction, the numerator of which is equal
to the number of days which have elapsed in such year through the Termination Date
and the denominator of which is 365, to be paid at the same time as annual
incentive payments are made to current similarly situated executives of the
Company;
|
|
|
(e)
|
|
if the Covered Executive is enrolled in the Companys medical, dental
and/or vision plan as of the Termination Date, the Covered Executive and his or her
spouse and dependents (if likewise so-enrolled as of the Termination Date) will
continue to participate in those plans (whichever applicable) in accordance with
the terms of such plans as they may be amended from time to time, at the same cost
to the Covered Executive as would be incurred by similarly situated active
employees (which may change from time-to-time) until (i) the date the Covered
Executive becomes eligible for any medical, dental, or vision coverage provided by
another employer or, if earlier, (ii) eighteen (18) months following the
Termination Date (the parties agree that the COBRA continuation period shall not
begin until after the expiration of the periods set forth herein); and
|
|
|
(f)
|
|
reasonable outplacement services by a firm selected by the Company, at
the expense of the Company, in an amount not to exceed $10,000, for a period
lasting not longer than one (1) year after the Covered Executives Termination
Date.
|
4. Eligibility For Separation Pay and Benefits
Except with respect to the Accrued Obligations, the Companys obligations to provide any
severance pay and benefits under this Policy are contingent upon the following:
|
A.
|
|
The Covered Executives execution of the following documents in such form as provided
by the Company and prior to the first date that any payment (other than the Accrued
Obligations) is to begin:
|
|
(1)
|
|
a valid, enforceable, full and unconditional release of all claims whether
known or unknown that the Covered Executive may have against the Company, its officers,
fiduciaries, directors, agents, and employees as of the Termination Date; and
|
|
|
(2)
|
|
a Noncompetition, Non-Solicitation, Confidentiality, Non-Disparagement (and, if
specified by the Company, Arbitration) Agreement.
|
|
B.
|
|
After the Termination Date, the Covered Executive agrees to provide reasonable
assistance and cooperation with the Company concerning business or legal related matters
about which the Covered Executive possesses relevant knowledge or information. Such
cooperation will be provided only at the Companys specific request and will include, but
not be limited to, assisting or advising the Company with respect to any business-related
matters or any actual or threatened legal action (including testifying in depositions,
hearings, and/or trials). The Covered Executive will be reimbursed for the reasonable
costs of providing assistance and cooperation, including, without limitation, reasonable
travel and lodging expenses.
|
The Companys obligation to provide separation pay and benefits under this Policy will cease
immediately if the Company determines that Covered Executive failed to comply with any of the
foregoing conditions, and the Covered Executive will be required to return to the Company (with ten
(10) days after request by the Company) any amounts the Company has paid to the Covered Executive
under this Policy other than the Accrued Obligations.
5. Section 409A
This Policy is intended to comply with the requirements of Section 409A of the U.S. Internal
Revenue Code of 1986, as amended (the Code), or an exemption or exclusion therefrom, and, with
respect to amounts that are
3
subject to Section 409A of the Code, shall in all respects be administered in accordance with
Section 409A of the Code.
Each payment under this Policy shall be treated as a separate payment for purposes of Section
409A of the Code. In no event may the Covered Executive, directly or indirectly, designate the
calendar year of any payment to be made under this Policy. If the Covered Executive dies following
the Termination Date and prior to the payment of the any amounts delayed on account of Section 409A
of the Code, such amounts shall be paid to the personal representative of the Covered Executives
estate within 30 days after the date of the Covered Executives death.
All reimbursements and in-kind benefits provided under this Policy that constitute deferred
compensation within the meaning of Section 409A of the Code shall be made or provided in accordance
with the requirements of Section 409A of the Code, including, without limitation, that (i) in no
event shall reimbursements by the Company under this Policy be made later than the end of the
calendar year next following the calendar year in which the applicable fees and expenses were
incurred, provided, that the Covered Executive shall have submitted an invoice for such fees and
expenses at least ten (10) days before the end of the calendar year next following the calendar
year in which such fees and expenses were incurred; (ii) the amount of in-kind benefits that the
Company is obligated to pay or provide in any given calendar year shall not affect the in-kind
benefits that the Company is obligated to pay or provide in any other calendar year; (iii) the
Covered Executives right to have the Company pay or provide such reimbursements and in-kind
benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the
Companys obligations to make such reimbursements or to provide such in-kind benefits apply later
than the periods described in this Policy. Within the time period permitted by the applicable
Treasury Regulations, the Company may modify this Policy, in the least restrictive manner necessary
and without any diminution in the value of the payments to the Covered Executive, in order to cause
the provisions of this Policy to comply with the requirements of Section 409A of the Code, so as to
avoid the imposition of taxes and penalties on the Covered Executive pursuant to Section 409A of
the Code.
Notwithstanding anything in this Policy to the contrary, in the event that a Covered Executive
is a specified employee (as defined in Section 409A of the Code) of the Company, as determined
pursuant to the Companys policy for identifying specified employees, on the date of the Covered
Executives termination of employment and the Covered Executive is entitled to a payment and/or a
benefit under this Policy that is required to be delayed pursuant to Section 409A(a)(2)(B)(i) of
the Code, then such payment or benefit, as applicable, shall not be paid or provided (or begin to
be paid or provided) until the first day of the seventh month following the date of the Covered
Executives termination of employment (or, if earlier, the date of the Covered Executives death).
The first payment that can be made to the Covered Executive following such period shall include the
cumulative amount of any payments or benefits that could not be paid or provided during such period
due to the application of Section 409A(a)(2)(B)(i) of the Code.
6. Employment at Will
Nothing in this Policy is to be construed such that a Covered Executives employment with the
Company is anything other than employment at will.
7. ERISA Provisions
This Policy is intended to be a plan whose participation is limited to a select group of
management or highly compensated employees within the meaning of Sections 4(b)(5), 201(2),
301(a)(3) and 401(a) of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
The claims procedure set forth in U.S. Department of Labor Regulation Section 2560.503-1 are
incorporated by reference into this Policy.
8. Governing Law
The rights and obligations of the Covered Executives and the Company under this Policy will be
governed and interpreted in accordance with the internal laws of the State of Ohio without regard
to choice of law principles and to the extent not preempted by ERISA.
4
9. Integration
This Policy supersedes and replaces the terms of any employment agreement, offer letter, or
other agreement with the Company, including any agreement in respect of confidentiality, that
governs the terms and conditions applicable to the Covered Executives separation from the Company
and is in effect immediately prior to the Covered Executives termination of employment
(Alternative Agreement) with respect to the payment of severance or benefits, to the extent that
the Alternative Agreement provides for the payment of severance or benefits in an amount less than
are payable under this Policy. To the extent that a Covered Executive is entitled to payment of
severance or benefits under an Alternative Agreement in an amount greater than are payable under
this Policy, the amount of severance or benefits shall be determined under the Alternative
Agreement and the Covered Executive shall not be entitled to any payments of severance or benefits
under this Policy. Notwithstanding the foregoing, any rights to severance of the person serving as
the Chief Executive Officer on the Effective Date shall be determined exclusively under this
Policy, except as provided below.
For purposes of clarity, if a Covered Executive is or becomes a party to the Companys Change
in Control Agreement dated as of January 1, 2009 (or a successor agreement in respect of a change
in control, collectively, a Change in Control Agreement) and is terminated under circumstances
that would entitle the Covered Executive to payments and benefits under the Change in Control
Agreement, the terms of the Change in Control Agreement, and not this Policy, will apply and the
Covered Executive will not be eligible for the payment of service or benefits under this Policy.
10. Reservation of Rights
This Policy may be modified from time to time, or terminated in its entirety, in the sole
discretion of the Compensation Committee. Any modifications made by the Compensation Committee for
any Covered Executive will apply to all Covered Executives for purposes of this Policy (except to
the extent expressly stated otherwise). Any modifications to, or the termination of, this Policy
will not affect the rights of Covered Executives whose Termination Date preceded such modification
or termination. The Compensation Committee will have discretion to construe and interpret this
Policy and its decisions will be final and binding on the Company, the Covered Executive and all
other interested persons.
11. Tax Withholding
All payments to a Covered Executive under this Policy will be reduced by any required
withholdings of applicable federal, state, local and foreign taxes.
12. Assignment
The Covered Executives rights and obligations under this Policy may not be assigned or
transferred. The Company may not assign or transfer its obligations under this Agreement except in
the event the Company is merged or consolidated into, or with, any other company, or if
substantially all of the assets of the Company are transferred to another company.
13. Remedies for Breach
Each party will bear its own costs to resolve any dispute arising under this Policy; provided,
however, that in the event that a Covered Executive is determined to be the prevailing party in
such dispute pursuant to a final nonappealable order or in a binding arbitration, the Company will
reimburse the Covered Executive for the reasonable costs incurred to enforce this Policy,
including, without limitation, reasonable attorneys fees.
14. Definitions
|
A.
|
|
Cause
means that, in the reasonable judgment of the Compensation Committee, any of the
following events have occurred: (1) the willful or negligent failure by the Covered
Executive to substantially perform his or her duties with the Company and, after written
notification by the Company to the Covered Executive, the continued failure of the Covered
Executive to substantially perform such duties; (2) the willful or negligent engagement by
the Covered Executive in conduct which is demonstrably and materially injurious to the
|
5
|
|
|
Company, financially or otherwise; (3) action or inaction by the Covered Executive that
constitutes a breach of fiduciary duty with respect to the Company or any of its
subsidiaries; (4) the engagement by the Covered Executive in egregious misconduct involving
moral turpitude; or (5) the Covered Executives material breach of any agreement in respect
of confidentiality with the Company, whether or not entered into after the Effective Date.
|
|
B.
|
|
Disability
means a Covered Executives having become unable (as determined by the
Compensation Committee in good faith) to perform regularly his or her duties with the
Company by reason of illness or incapacity.
|
|
|
C.
|
|
Good Reason
means the occurrence of any of the following: (1) a reduction in a Covered
Executives annual base salary rate, unless such reduction generally applies to other
Covered Executives regardless of the reason(s) therefor; (2) a substantial diminution in a
Covered Executives duties, authorities or responsibilities; or (3) the relocation of a
Covered Executives principal place of employment with the Company such that (a) the
distance from the former principal place of employment to the relocated principal place of
employment is over 50 miles and (b) the distance from his or her primary residence to the
relocated principal place of employment is over 50 miles; provided, however, that Good
Reason shall exist only to the extent that a Covered Executive provides the Company, in
care of the Legal Department at the Companys then-current corporate headquarters, with
written notice of his or her intention to terminate employment with the Company for Good
Reason that specifies the condition(s) constituting Good Reason and the Company fails to
correct such condition(s) within ten (10) business days from receipt of such written
notice. Notwithstanding the foregoing, Good Reason shall cease to exist for an event on the
one hundred and twentieth (120
th
) day following the later of its occurrence or
the Covered Executives knowledge thereof, unless the Covered Executive has given the
Company written notice of such condition and of the Covered Executives intent to terminate
for Good Reason prior to such date. With respect to the Chief Executive Officer only, Good
Reason shall also include a change in responsibilities such that the Chief Executive
Officer reports to someone other than directly to the Companys Board of Directors.
|
|
|
D.
|
|
Payment Date
means, with respect to payment of any severance pay and/or benefits
(except for any applicable medical, dental and/or vision benefits) relating to a Covered
Executives termination of employment under this Policy, a date selected by the Company
that is within thirty (30) days following the Termination Date except in respect of the
payments provided for in 3B(1)(D) and 3B(2)(D) above; provided, however, that the Payment
Date shall be such date as avoids a violation of applicable law, including but not limited
to, Section 409A of the Code. The Payment Date may, at the sole discretion of the Company,
be different dates for different pay and/or benefits due under this Policy, as long as such
dates comply with the requirements of applicable law.
|
|
|
E.
|
|
Termination Date
means the date on which a Covered Executives experiences a
separation from service within the meaning of Section 409A of the Code from the Company.
|
|
|
F.
|
|
Without Cause
means a termination of a Covered Executives employment (1) by the
Company other than for Cause or (2) because of the Covered Executives Disability, but only
to the extent that the Covered Executive is not receiving long-term disability benefits
under the Companys long-term disability plan (or is eligible, but declined to receive,
such long-term disability benefits).
|
***************
6