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<PAGE>
EXHIBIT 10(h)
CHANGE IN CONTROL AGREEMENT
THIS
AGREEMENT, dated as of [__], 200[_] (the "Effective Date"), is made
by
and between Ferro Corporation, an Ohio corporation (the "Company"),
and
[_____________] (the "Executive").
WHEREAS, the Company considers it essential to the best interests
of its
shareholders to foster the continued employment of key management
personnel; and
WHEREAS, the Board recognizes that, as is the case with many
publicly held
corporations, the possibility of a Change in Control exists and
that such
possibility, and the uncertainty and questions which it may raise
among
management, may result in the departure or distraction of
management personnel
to the detriment of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to
reinforce and encourage the continued attention and dedication of
members of the
Company's management, including the Executive, to their assigned
duties without
distraction in the face of potentially disturbing circumstances
arising from the
possibility of a Change in Control;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants
herein contained, the Company and the Executive hereby agree as
follows.
1.
Defined Terms. The definitions of certain capitalized terms used in
this
Agreement are provided in the last Section hereof.
2.
Term of Agreement. The Term of this Agreement shall commence on
the
Effective Date and shall continue in effect through December 31,
200[_];
provided, however, that commencing on January 1, 200[_] and each
January 1
thereafter, the Term shall automatically be extended for one
additional year
unless, not later than September 30 of the preceding year, the
Company or the
Executive shall have given notice not to extend the Term; and
further provided,
however, that if a Change in Control shall have occurred during the
Term, the
Term shall expire no earlier than the last day of the twenty-fourth
(24th) month
following the month in which such Change in Control occurred.
Notwithstanding
any other provision hereof, (a) except as provided in Section 6.1
hereof, the
Term shall expire upon any termination of the Executive's
employment prior to a
Change in Control and (b) the Term shall expire (and for purposes
of the
application of the provisions of the Agreement, shall be deemed to
have expired)
on the date of the Executive's Retirement. Except as provided in
Section 7A.1,
the expiration of the Term shall have no effect on the terms of the
restrictive
covenants set forth in Section 7A.
3.
Company's Covenants Summarized. In order to induce the Executive
to
remain in the employ of the Company and in consideration of the
Executive's
covenants set forth in Section 4 hereof, the Company agrees, under
the
conditions described herein, to pay the Executive the Severance
Payments and the
other payments and benefits described herein. No Severance Payments
shall be
payable under this Agreement unless there shall have been (or,
under the terms
of the second sentence of Section 6.1 hereof, there shall be deemed
to have
been)
<PAGE>
a termination of the Executive's employment with the Company
following a
Change in Control and during the Term. This Agreement shall not be
construed as
creating an express or implied contract of employment and 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 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 that has been authorized or ratified by the
Board.
4.
Certain Executive Covenants. The Executive agrees that, subject to
the
terms and conditions of this Agreement, in the event of a Potential
Change in
Control during the Term, the Executive intends to remain in the
employ of the
Company until there occurs a Change in Control.
5.
Compensation Other Than Severance Payments.
5.1
Following a Change in Control and during the Term, during any
period
that the Executive fails to perform the Executive's full-time
duties with the
Company as a result of incapacity due to physical or mental
illness, the Company
shall pay the Executive's full salary to the Executive at the rate
in effect at
the commencement of any such period, together with all compensation
and benefits
payable to the Executive under the terms of any compensation or
benefit plan,
program or arrangement maintained by the Company during such
period, until the
Executive's employment is terminated by the Company for
Disability.
5.2
If the Executive's employment shall be terminated for any
reason
following a Change in Control and during the Term, the Company
shall pay the
Executive's full salary to the Executive through the Date of
Termination at the
rate in effect immediately prior to the Date of Termination
(without giving
effect to any reduction in base salary, which reduction constitutes
an event of
Good Reason) or, if higher, the highest base salary rate in effect
with respect
to the Executive at any time during the calendar year immediately
preceding the
Change in Control, together with all compensation and benefits
payable to the
Executive through the Date of Termination under the terms of the
applicable
compensation and benefit plans, programs or arrangements of the
Company or any
Affiliate thereof as in effect immediately prior to the Date of
Termination
(without giving effect to any reduction in compensation or
benefits, which
reduction constitutes an event of Good Reason) or, if more
favorable to the
Executive, as in effect immediately prior to the Change in
Control.
5.3
If the Executive's employment shall be terminated for any
reason
following a Change in Control and during the Term, the Company
shall pay to the
Executive the Executive's normal post-termination compensation and
benefits as
such payments become due. Such post-termination compensation and
benefits shall
be determined under, and paid in accordance with, the applicable
retirement,
insurance and other compensation or benefit plans, programs and
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arrangements of the Company or any Affiliate thereof as in effect
immediately
prior to the Date of Termination (without giving effect to any
adverse change in
such plans, programs and arrangements, which adverse change
constitutes an event
of Good Reason) or, if more favorable to the Executive, as in
effect immediately
prior to the Change in Control.
5.4
In the event a Change in Control of the Company occurs during the
Term,
whether or not the Executive's employment thereafter terminates,
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 (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 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 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. Notwithstanding the preceding sentence, to
the extent
that implementation of such sentence would preclude a Change in
Control
transaction intended to qualify for "pooling of interests"
accounting treatment
from so qualifying, the cash value otherwise payable to the
Executive under this
Section 5.4 shall be payable in shares of stock of the Company or
the
corporation resulting from such transaction so as not to preclude
such
transaction from so qualifying. Such shares shall have an initial
value equal to
the cash amount otherwise payable to the Executive hereunder. For
purposes of
this Section 5.4, in the event Executive's employment terminate
under
circumstances described in the second sentence of Section 6.1, the
determination
of the number of Outstanding Performance Shares which had not
expired
immediately prior to the Change in Control shall, instead, be
determined as of
the date which is immediately prior to the date of occurrence of
the Potential
Change in Control. The provisions of this Section 5.4 shall not
affect in any
manner the determination of amounts payable to the Executive under
the
Performance Share Plan (or any predecessor thereto).
6.
Severance Payments
6.1
If (i) the Executive's employment is terminated following a Change
in
Control and during the Term, other than (A) by the Company for
Cause, (B) by
reason of death, Disability or Retirement, or (C) by the Executive
without Good
Reason, then the Company shall pay the Executive the amounts, and
provide the
Executive the benefits, described in this Section 6.1 ("Severance
Payments") and
Section 6.4, in addition to any payments and benefits to which the
Executive is
entitled under Section 5 hereof. For purposes of this Agreement,
the Executive's
employment shall be deemed to have been terminated following a
Change in Control
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<PAGE>
by the Company without Cause or by the Executive with Good Reason,
if, during
the Term, (i) the Executive's employment is terminated by the
Company without
Cause after the occurrence of a Potential Change in Control and
prior to a
Change in Control (whether or not a Change in Control ever occurs)
and such
termination was at the request or direction of a Person who has
entered into an
agreement with the Company the consummation of which would
constitute a Change
in Control or (ii) the Executive terminates his employment for Good
Reason after
the occurrence of a Potential Change in Control and prior to a
Change in Control
(whether or not a Change in Control ever occurs) and the
circumstance or event
which constitutes Good Reason occurs at the request or direction of
such Person.
(1) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of any
severance
benefit otherwise payable to the Executive, the Company shall pay
to the
Executive a lump sum severance payment, in cash, equal to two (or,
if less, the
number of full and partial years between the Date of Termination
and the
Executive's scheduled date of Retirement) times the sum of (i) the
Executive's
base salary as in effect immediately prior to the Date of
Termination (without
giving effect to any reduction in base salary, which reduction
constitutes an
event of Good Reason) or, if higher, the highest base salary rate
in effect with
respect to the Executive at any time during the calendar year
immediately
preceding the Change in Control (the applicable amount being
referred to herein
as the "Base Salary"), and (ii) the Executive's target annual
incentive
compensation amount under the Company's Annual Incentive
Compensation Plan or
any successor thereto (the "Incentive Compensation Plan") for the
fiscal year in
which occurs the Date of Termination (without giving effect to any
reduction in
targeted annual incentive compensation caused by an adverse change
in the
Executive's Incentive Compensation Plan participation, which
adverse change
constitutes an event of Good Reason) or, if higher, for the fiscal
year in which
occurs the Change in Control. For this purpose, the targeted annual
incentive
compensation amount shall be deemed to be [____________] percent
([___]%) of
Base Salary, or such greater percentage thereof as may be
applicable to the
Executive at targeted levels, under the Incentive Compensation
Plan.
(2) For the twenty-four (24) month period immediately following
the
Date of Termination (or, if less, the number of months between the
Date of
Termination and the Executive's scheduled date of Retirement) (the
"Continuation
Period"), the Company shall arrange to provide the Executive (and,
if
applicable, his dependents) with benefits substantially similar to
those
provided to the Executive (and, if applicable, his dependents)
under the Benefit
Plans immediately prior to the Date of Termination (without giving
effect to any
reduction in benefits, which reduction constitutes an event of Good
Reason) or,
if more favorable to the Executive, those provided to the Executive
(and, if
applicable, his dependents) under the Benefit Plans immediately
prior to the
Change in Control, at no greater cost to the Executive than the
cost to the
Executive immediately prior to such date. For purposes of
determining
Executive's rights under any such Benefit Plans applicable to
retired employees,
the Executive shall be treated as having remained in employment
through the
Continuation Period.
(3) The Company shall pay to the Executive a lump sum amount, in
cash,
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
(determined pursuant to Section 6.1(1)(ii)
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<PAGE>
above) 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
6.1(3) 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.
(4) In addition to the retirement benefits to which the Executive
is
entitled under the Pension Plans or any successor plans thereto,
the Company
shall pay the Executive a lump sum amount, in cash, 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 (or, if more
favorable to the
Executive, immediately prior to the Change in Control) for
computing the present
value of commuted payments under the Qualified Plan) of (a) the
lump sum value
(determined as of the Executive's Normal Retirement Age, using the
same methods
and assumptions used at the Date of Termination (or, if more
favorable to the
Executive, immediately prior to the Change in Control) for purposes
of the
Qualified Plan) of the retirement pension to which the Executive
would have been
entitled under the terms of the Pension Plans (as in effect on the
Date of
Termination) as if the Executive's employment had continued through
the
Continuation Period at Base Salary and incentive compensation
levels equal to
those set forth in Section 6.1(1) 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 Plans (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
Executive's 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 each Pension Plan and (z) without regard to any termination
of or
amendments to any of such plans, which termination or amendments
are adopted on
or after the date of a Change in Control, to the extent any such
termination or
amendments adversely affect in any manner the computation of
benefits thereunder
or are otherwise adverse to the Executive.
(5) The Company shall provide the Executive, at the Company's
sole
cost and expense, with the services of an outplacement firm
mutually agreed upon
between the Company and the Executive and suitable to the
Executive's position
until the first acceptance by the Executive of an offer of
employment.
(6) The Company shall continue to maintain officers'
indemnification
insurance for the Executive for a period of not less than four (4)
years
following the Date of Termination, the terms and conditions of
which shall be no
less favorable than the terms and conditions of the officers'
indemnification
insurance maintained by the Company for the Executive immediately
prior to the
date on which the Change in Control occurs.
6.2
If the Executive's employment is terminated following a Change
in
Control and during the Term by reason of Disability, the Company
shall pay to
the Executive, in addition to any payments and benefits to which
the Executive
is entitled under Section 5 hereof, (A) a cash
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<PAGE>
lump sum, the amount of which shall be determined under Section
6.1(3) hereof,
(B) for the twenty-four month period immediately following the Date
of
Termination, on a monthly basis, an aggregate amount in cash equal
to the excess
(but not less than zero) of (i) one twenty-fourth (1/24) of the
aggregate amount
determined under Section 6.1(1) hereof over (ii) the aggregate
amount received
by the Executive during such month under the Company's long-term
disability
plans and (C) the continuation of benefits under the Benefit Plans
for the
Executive (and, if applicable, his dependents), as determined under
Section
6.1(2) hereof.
6.3
If the Executive's employment is terminated following a Change
in
Control and during the Term by reason of his death, the Company
shall pay to the
Executive's legal representatives or estate, or as may be directed
by the legal
representatives of his estate, as the case may be, in addition to
any payments
and benefits to which the Executive is entitled under Section 5
hereof, a cash
lump sum equal to the amounts determined under Sections 6.1(1) and
(3) above.
6.4
Whether or not the Executive becomes entitled to the Severance
Payments, if any payment or benefit received or to be received by
the Executive
in connection with a Change in Control or the termination of the
Executive's
employment (whether pursuant to the terms of this Agreement or any
other plan,
arrangement or agreement with the Company, any Person whose actions
result in a
Change in Control or any Person affiliated with the Company or such
Person) (all
such payments and benefits, including the Severance Payments, being
hereinafter
called "Total Payments") will be subject (in whole or part) to the
Excise Tax,
then the Company shall pay to the Executive an additional amount
(the "Gross-Up
Payment") such that the net amount retained by the Executive, after
deduction of
any Excise Tax on the Total Payments and any federal, state and
local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be
equal to the
Total Payments. For purposes of determining the amount of the
Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the
highest
marginal rate of federal income taxation in the calendar year in
which the
Gross-Up Payment is to be made and state and local income taxes at
the highest
marginal rate of taxation in the state and locality of the
Executive's residence
on the Date of Termination (or if there is no Date of Termination,
then the date
on which the Gross-up Payment is calculated for purposes of this
Section 6.4),
net of the maximum reduction in federal income tax which could be
obtained from
deduction of such state and local taxes.
(1) For purposes of determining whether any of the Total Payments
will
be subject to the Excise Tax and the amount of such Excise Tax, (i)
all of the
Total Payments shall be treated as "parachute payments" within the
meaning of
section 280G(b)(2) of the Code, unless in the opinion of a
nationally recognized
legal or accounting firm selected by the Executive ("Tax Counsel"),
such other
payments or benefits (in whole or in part) do not constitute
parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess
parachute payments" within the meaning of section 280G(b)(l) of the
Code shall
be treated as subject to the Excise Tax unless, in the opinion of
Tax Counsel,
such excess parachute payments (in whole or in part) represent
reasonable
compensation for services actually rendered, within the meaning of
section
280G(b)(4)(B) of the Code, in excess of the Base Amount allocable
to such
reasonable compensation, or are otherwise not subject to the Excise
Tax, and
(iii) the value of any noncash benefits or any deferred payment or
benefit shall
be determined by the accounting
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<PAGE>
firm which was, immediately prior to the Change in Control, the
Company's
independent auditor (the "Auditor") in accordance with the
principles of
sections 280G(d)(3) and (4) of the Code. The Executive agrees to
direct Tax
Counsel to submit its determination and detailed supporting
calculations to both
the Executive and the Company as promptly as practicable. If Tax
Counsel
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 five (5) business days after receipt of such
determination and
calculations. If Tax Counsel 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 Tax Counsel as to the amount of the Gross-Up
Payment shall be
binding upon the Executive and the Company.
(2) As a result of the uncertainty in the application of Section
4999
of the Code (or any successor provision thereto) at the time of the
initial
determination by Tax Counsel 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
paragraph (5) below and the Executive thereafter is required to
make a payment
of any Excise Tax, the Executive may direct Tax Counsel 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 (plus any interest and
penalties
attributable thereto) shall be paid by the Company to the
Executive, or for the
Executive's benefit, within five (5) business days after receipt of
such
determination and calculations. In the event that (i) amounts are
paid to the
Executive pursuant to subsection (A) of this Section 6.4 and (ii)
the Excise Tax
is finally determined to be less than the amount taken into account
hereunder in
calculating the Gross-Up Payment, the Executive shall repay to the
Company,
within five (5) business days following the time that the amount of
such
reduction in Excise Tax is finally determined, the portion of the
Gross-Up
Payment attributable to such reduction (plus that portion of the
Gross-Up
Payment attributable to the Excise Tax and federal, state and local
income and
employment taxes imposed on the Gross-Up Payment being repaid by
the Executive),
to the extent that such repayment results in a dollar-for-dollar
reduction in
the Executive's taxable income and wages for purposes of federal,
state and
local income and employment taxes, plus interest on the amount of
such repayment
at the rate provided in section 1274(b)(2)(B) of the Code.
(3) The Executive and the Company shall each provide Tax
Counsel
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 Tax
Counsel, and otherwise cooperate with Tax Counsel in connection
with the
preparation and issuance of the determination contemplated by
paragraphs (1) and
(2) above.
(4) The fees and expense of Tax Counsel for its services in
connection
with the determinations and calculations contemplated by this
Section 6.4 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
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<PAGE>
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 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
cost






