This Release Agreement involves
Title: SEPARATION AGREEMENT AND RELEASE
Governing Law: Ohio Date: 3/31/2006
Industry: Chemical Manufacturing Sector: Basic Materials
This document is a SEPARATION AGREEMENT AND RELEASE (this "Separation
Agreement"), is dated November 11, 2005, and is between FERRO CORPORATION
("Ferro") and DALE G. KRAMER ("Mr. Kramer").
For good and valuable consideration, and intending to be legally bound,
Ferro and Mr. Kramer hereby agree as follows:
1. TERMINATION OF EMPLOYMENT
A. Ferro has employed Mr. Kramer since November 29, 1999.
B. As of May 14, 2002, Mr. Kramer and Ferro signed an Confidentiality
Agreement (the "Confidentiality Agreement") with Ferro.
C. As of July 1, 2001, Ferro and Mr. Kramer signed a Change in Control
Agreement (the "Change in Control Agreement").
D. Mr. Kramer currently serves as Ferro's Vice President, Performance
E. Ferro and Mr. Kramer have mutually decided to end Mr. Kramer's
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, if his employment were
terminated today, Mr. Kramer would be entitled to receive -
(1) An amount equal to one week's base pay for each completed year of
service plus four additional weeks' pay, or $51,057.72 (i.e.,
$5,673.08 times 9 weeks),
(2) Two weeks' pay in lieu of notice, or $11,346.16 (i.e., $5,673.08
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
February 28, 2006.
B. The payments and benefits Mr. Kramer 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 Mr. Kramer in this
Separation Agreement, Ferro is prepared to provide Mr. Kramer with, and Mr.
Kramer 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
Unless he resigns or voluntarily terminates his employment earlier,
Mr. Kramer will continue on Ferro's payroll at his current salary and
with his current employee benefits through March 31, 2006, and his
employment with Ferro will terminate on that date. If Mr. Kramer
resigns or otherwise voluntarily terminates his employment with Ferro
before March 31, 2006, then Mr. Kramer will not be eligible for any of
the separation pay or benefits provided in this numbered paragraph 3
or the 2005 bonus payment described in numbered paragraph 4.A below.
B. SEVERANCE PERIOD
The "Severance Period" will be the period beginning March 31, 2006,
and ending the earlier of June 30, 2007, or the date on which Mr.
Kramer begins employment with another employer.
C. SEVERANCE PAYMENTS
During the Severance Period, Ferro will pay Mr. Kramer as severance
Mr. Kramer's current base salary of $12,291.66 per twice-monthly pay
D. SEVERANCE BENEFITS
During the Severance Period, Ferro will continue to provide Mr. Kramer
coverage under Ferro's employee health plans (i.e., medical, dental,
and vision care and flexible spending account) offered to Corporate
Lakeside employees, consistent with Mr. Kramer's current elections or
subsequent elections made by Mr. Kramer during Ferro's normal annual
enrollment process. Ferro will pay the employer's portion of Mr.
Kramer's premium costs under such plans during the Severance Period.
E. COMPANY AUTOMOBILE
On or before December 31, 2005, Mr. Kramer will be entitled to
purchase his company automobile in accordance with standard Ferro
policy applicable to corporate officers. Mr. Kramer will be entitled
use of such automobile (together with gasoline, normal maintenance,
and insurance) until such date.
F. CELLULAR TELEPHONE
Mr. Kramer will be entitled to the continued use of his company
cellular telephone until December 31, 2005. Ferro will cooperate with
Mr. Kramer is transferring his company cellular telephone number to a
personal cellular telephone service of Mr. Kramer's choosing.
G. COMPANY COMPUTER
On or before December 31, 2005, Mr. Kramer will deliver his company
computer to Ferro. Ferro will then 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 Mr. Kramer and Mr. Kramer will be entitled to
retain the company computer at no cost to Mr. Kramer. Mr. Kramer will
not use any information or data remaining on such computer in any
manner that is inconsistent with his obligations under numbered
paragraph 7 below.
H. OTHER BENEFITS
Mr. Kramer's rights with respect to other Ferro employee benefits,
including his rights with respect to Ferro's supplemental defined
contribution and defined benefit plans and deferred compensation plan,
will be governed by the terms and conditions of such plans.
4. ANNUAL INCENTIVE PLAN
A. Mr. Kramer is a participant in the Ferro annual incentive plan and is
eligible for a bonus payment under such plan for the year 2005.
B. Mr. Kramer's 2005 bonus will be determined in accordance with standard
Ferro policy. Ferro will add to the amount so determined the gross sum
of $6,000.00. Mr. Kramer's 2005 bonus will be paid on or before April
C. Mr. Kramer will not be eligible for a bonus payment for the year 2006
or any year thereafter.
5. STOCK OPTIONS
A. Mr. Kramer 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 Stock Options granted February 11, 2000, with
an option exercise price of $18.50 per share,
(2) 15,000 Incentive Stock Options granted February 9, 2001, with an
option exercise price of $23.60 per share,
(3) 5,271 Incentive Stock Options granted February 11, 2002, with an
option exercise price of $25.50 per share,
(4) 39,729 Non-Qualified Stock Options granted February 11, 2002,
with an option exercise price of $25.50 per share,
(5) 4,705 Incentive Stock Options granted February 28, 2003, with an
option exercise price of $21.26 per share,
(6) 50,295 Non-Qualified Stock Options granted February 28, 2003,
with an option exercise price of $21.26 per share,
(7) 4,151 Incentive Stock Options granted February 9, 2004, with an
option exercise price of $26.26 per share,
(8) 50,849 Non-Qualified Stock Options granted February 9, 2004, with
an option exercise price of $26.26 per share,
(9) 5,157 Incentive Stock Options granted February 7, 2005, with an
option exercise price of $19.39 per share, and
(10) 38,843 Non-Qualified Stock Options granted February 7, 2005, with
an option exercise price of $19.39 per share.
Mr. Kramer 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, Mr. Kramer will be entitled to exercise any of the foregoing
options that have vested as of the date of his employment with Ferro
terminates provided Mr. Kramer 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, Mr. Kramer
will not be entitled to exercise any further Ferro stock options.
6. PERFORMANCE SHARE AWARDS
A. Ferro made an award of 8,500 Performance Shares to Mr. Kramer in 2003
under Ferro's 1997 Performance Share Plan for the performance period
January 1, 2003, through December 31, 2005. Mr. Kramer will
be eligible for distribution and payment with respect to such
Performance Shares in accordance