(FERRO LOGO)
EXHIBIT 10(k)
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FERRO CORPORATION
EXECUTIVE EMPLOYEE
DEFERRED COMPENSATION PLAN
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Amended and Restated Effective
June 30, 2004
As Amended and Restated
June 30, 2004
FERRO CORPORATION
EXECUTIVE EMPLOYEE DEFERRED COMPENSATION PLAN
INTRODUCTION
This document (this "Plan") is the FERRO CORPORATION EXECUTIVE EMPLOYEE
DEFERRED COMPENSATION PLAN. This Plan was originally adopted and effective as of
January 1, 1998. This Plan was later amended by the adoption of First, Second
and Third Amendments.
This Plan is now amended and restated effective June 30, 2004, as follows.
ARTICLE I
NAME AND PURPOSE
1.1 Name. The name of this Plan is the "Ferro Corporation Executive Employee
Deferred Compensation Plan."
1.2 Plan Sponsor. The sponsor of this Plan is Ferro Corporation ("Ferro"), an
Ohio corporation.
1.3 Purpose. This purpose of this Plan is to provide unfunded deferred
compensation to certain management and highly compensated employees of the
Ferro Group Companies under the conditions set forth in this Plan.
1.4 Plan for a Select Group. This Plan covers only employees of a Ferro Group
Company who are members of a "select group of management or highly
compensated employees" as provided in Sections 201(2), 301(a)(3), 401(a)(1)
and 4021(b)(6) of ERISA. Notwithstanding any provision of this Plan to the
contrary, this Plan will be administered and its benefits limited in a
manner to comply with the above cited sections of ERISA.
1.5 Not a Funded Plan. Ferro intends that this Plan be deemed to be "unfunded"
for tax purposes as well as for purposes of Title I of ERISA.
Notwithstanding any provision of this Plan to the contrary, this Plan will
be administered in a manner so that it is deemed "unfunded."
ARTICLE II
DEFINITIONS AND INTERPRETATION
2.1 Definitions. Appendix A sets forth the definitions of certain terms used in
this Plan. Those terms shall have the meanings set forth on Appendix A
where used in this Plan and identified with initial capital letters.
2.2 General Rules of Construction. For purposes of interpreting this Plan,
(A) the masculine gender will include the feminine and neuter, and vice
versa, as the context requires;
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As Amended and Restated
June 30, 2004
(B) the singular number will include the plural, and vice versa, as the
context requires;
(C) the present tense of a verb will include the past and future tenses,
and vice versa, as the context requires; and
(D) as provided under Article VII, the Administrator will retain the power
and duty to interpret this Plan and resolve ambiguities.
ARTICLE III
PARTICIPATION; DEFERRALS AND ACCOUNTS
3.1 Eligibility. In order to be eligible to participate in this Plan, an
individual must -
(A) be an Executive Employee of a Ferro Group Company, and
(B) be selected by the Administrator to participate in this Plan for all
or part of an Election Year.
3.2 Participation. Generally, an Eligible Employee may become a Participant and
actively participate for an Election Year only by completing and filing a
Deferred Compensation Agreement described in Section 3.3 below with his or
her Ferro Group Company before January 1 of an Election Year. If, however,
an employee first becomes an Eligible Employee after January 1 of an
Election Year, then that employee may become a Participant and actively
participate for a portion of the Election Year beginning on the first day
of the month coincident with or immediately after the date the Eligible
Employee completes and files a Deferred Compensation Agreement described in
Section 3.3 below with his or her Ferro Group Company.
3.3 Deferral Elections. With respect to each Election Year, each Eligible
Employee may elect, under his or her Deferred Compensation Agreement for
such Election Year, to make one or more of the deferrals described below.
(A) Salary Deferral: Deferral of any whole percentage of up to 75% of his
or her Base Annual Salary for the Election Year which is payable each
payroll period commencing on or after the Eligible Employee's Entry
Date.
(B) Bonus Deferral: Deferral of any whole percentage up to 100% of the
Bonus which is earned on or after his or her Entry Date in the
Election Year.
(C) Performance Share Award: Deferral of any whole percentage up to 100%
of payments with respect to Performance Shares which are earned on or
after the Eligible Employee's Entry Date in the Election Year.
A Participant's election to defer will be effective only for the Election
Year(s) indicated in his or her Deferred Compensation Agreement. The amount
of a Participant's Base Annual Salary, Bonus and Performance Share Award
will be determined in accordance with the information contained in the
payroll records of the Ferro Group Company.
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As Amended and Restated
June 30, 2004
3.4 Salary Reductions and Deferral Amounts.
(A) A Participant's election to defer pursuant to 3.3(A) above will cause
an equivalent reduction in the Participant's Base Annual Salary at the
time the Base Annual Salary would otherwise be payable.
(B) A Participant's election to defer pursuant to 3.3(B) above will cause
an equivalent reduction in the Participant's Bonus at the time the
Bonus would otherwise be payable.
(C) A Participant's election to defer in accordance with 3.3(C) above will
cause an equivalent reduction in the payment in respect of the
Participant's Performance Shares at the time the Performance Share
Award would otherwise be payable.
An amount equal to the reductions in a Participant's Base Annual Salary,
Bonus and Performance Share Award pursuant to 3.1(A), 3.1(B) and 3.1(C)
above will constitute an Elective Amount and will be credited to the
Participant's Elective Account at the time of the reductions.
3.5 Alteration of Deferrals. A Participant's deferral election made pursuant to
Section 3.3 will be irrevocable except that, if the Participant receives a
distribution on account of a Financial Hardship, then the Administrator
may, at its option, discontinue the Participant's deferral election for the
remainder of the current Election Year, and preclude the Participant from
making any deferrals for all or part of the succeeding Election Year.
3.6 Establishment of Accounts. Each Ferro Group Company will establish an
Account in the name of each Participant who is employed by it on the books
and records of the Ferro Group Company. All amounts credited to the Account
of any Participant or former Participant will constitute a general,
unsecured liability of such Ferro Group Company to the Participant.
3.7 Allocation of Elective Amounts. At the time a Participant's Base Annual
Salary, Bonus or Performance Share Award are reduced pursuant to Section
3.4, the Ferro Group Company employing the Participant will credit the
Participant's Account with the Participant's Elective Amount with respect
to such Base Annual Salary, Bonus or Performance Share Award.
3.8 Pre-1999 Elective Amounts. The Ferro Group Company will maintain separate
Accounts for the Elective Amounts deferred by the Participant before 1999
and after 1998, to enable the Participant to elect for the deemed
investment of the Elective Amounts as provided under Section 5.4 below.
3.9 Crediting of Earnings. The Ferro Group Company will credit the Account of
each Participant who is or was its employee with earnings, gains and losses
in accordance with the deemed investment of the Elective Amounts elected by
the Participant under Section 5.4 below.
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As Amended and Restated
June 30, 2004
ARTICLE IV
BENEFITS; PAYMENT OF BENEFITS
4.1 Date of Distribution. Distribution of the amounts credited to the
Participant's Account will be made as soon as practicable after the earlier
of:
(A) the date elected by the Participant in his or her Deferred
Compensation Agreement, or
(B) the Participant's death, Disability, or Termination of Employment
before the Participant's Retirement Date.
If the Participant has a Termination of Employment on or after the
Participant's Retirement Date, the amounts credited to the Account will be
distributed as soon as practicable after the date elected by the
Participant in the Deferred Compensation Agreement.
4.2 Distribution on Change in Control. If the Participant has elected in his or
her Deferred Compensation Agreement to receive a distribution of the
amounts credited to his or her Account if a Change in Control occurs, then
if a Change in Control occurs, the Ferro Group Company will distribute to
the Participant (or, in the event of the Participant's death, the
Participant's Beneficiary) a lump sum payment of the amount credited to the
Participant's Account within thirty (30) days after the Change in Control.
The amount credited to the Participant's Account will be determined as of
the end of the calendar month immediately preceding the month in which the
Change in Control occurs, with such date being the Valuation Date for
purposes of the distribution. The lump sum payment will be made in the form
of cash as regards the portion of the Participant's Account deemed to be
invested in Treasury instruments, and in the form of Ferro Common Stock as
regards the portion of the Participant's Account deemed to be invested in
Ferro Common Stock.
4.3 Hardship Distribution. At any time before payment in full of the amounts
credited to a Participant's Account, a Participant may submit a written
request to the Administrator for the distribution of all or a portion of
the Participant's Account because of a Financial Hardship. In response, the
Administrator has the authority to determine, in its sole discretion, that
payments should be made in any manner the Administrator deems appropriate,
in whole or in part, on any other date or dates in order to alleviate a
Financial Hardship of a Participant.
4.4 Form of Distribution. Except as provided in Section 4.2 and 4.3, payment
will be made of the Participant's Account as follows.
(A) Treasury Instruments. Unless the Participant elects otherwise in the
Deferred Compensation Agreement, the portion of the Participant's
Account deemed to be invested in Treasury instruments will be
distributed in the form of cash in a single lump sum payment or
installment payments, or a combination of both, as determined by the
Administrator.
(B) Ferro Common Stock. The portion of the Participant's Account deemed to
be invested in Ferro Common Stock will be distributed in the form of
Ferro Common Stock in a single lump sum payment.
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As Amended and Restated
June 30, 2004
4.5 Valuation of Distributions. All distributions under this Plan will be based
upon the amount credited to the Participant's Account as of the Valuation
Date immediately preceding the date of distribution.
4.6 Death Prior to Distribution. If the Participant dies before receiving
complete distribution of the Account under Section 4.1, 4.2 or 4.3 above,
then the Beneficiary of the deceased Participant will be entitled to a
death benefit equal to the balance of the Participant's Account.
(A) Death Prior to Retirement Date. In the event the Participant has not
incurred a Termination of Employment and dies prior to his or her
Retirement Date, the Ferro Group Company will distribute the balance
of the Participant's Account to the Beneficiary as soon as practicable
after the Participant's death in the form provided in Section 4.4.
(B) Death After Retirement Date. In the event the Participant has incurred
a Termination of Employment after reaching his or her Retirement Date
(or the Participant has reached his or her Retirement Date and has not
incurred a Termination of Employment) and dies, the Ferro Group
Company will distribute the balance of the Participant's Account to
the Beneficiary at the time and in the form elected in the Deferred
Compensation Agreement or, if no form is elected, in the form provided
under Section 4.4.
4.7 Change in Date or Form of Distribution. The Administrator, with the consent
of the Chief Executive Officer of Ferro, may establish procedures to permit
some or all Participants to request to change their prior Deferred
Compensation Agreements regarding the date or form in which all or a
portion of the Account will be distributed. Any procedures to change the
elected date or form will require that the Participant's request be made a
reasonable period of time before the portion of the Account affected by the
request will otherwise be distributed, or require a forfeiture of a
significant percentage of the portion of the Account affected by the
request. In the case of a request to change the distribution date to a date
which is later than that elected in the Deferred Compensation Agreement,
the procedures will require that the Participant make such a request at
least one year prior to the original distribution date unless special
circumstances apply. The Administrator may, but is not required to, grant
any such requests. The Administrator, with the consent of the Chief
Executive Officer of Ferro, may establish similar procedures to permit some
or all Beneficiaries of deceased Participants to request, where
distribution to the Beneficiary is deferred or to be made in installment
payments, to accelerate all or a portion of the distribution in the form of
an immediate lump sum payment.
4.8 Administration of Distributions. Distributions under this Plan will be made
as soon as administratively possible following receipt of notice by the
Administrator of an event that entitles a Participant or a Beneficiary to
payments under this Plan and completion by the Participant or Beneficiary
of any forms required by the Administrator.
4.9 Designation of Beneficiary. Subject to the rules and procedures promulgated
by the Administrator, a Participant may sign a document designating a
Beneficiary or Beneficiaries. If a Participant fails to designate any
Beneficiary in accordance with the provisions of this Section, then the
Beneficiary will be deemed to be the Participant's spouse, or if no spouse
is then living, the Participant's estate.
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June 30, 2004
4.10 Protective Distributions. If the Administrator determines, in its sole
discretion, that a Participant is not, or may not be, a member of a "select
group of management or highly compensated employees" within the meaning of
Section 201(2), 301(a)(3), 401(a)(1) or 4021(b)(6) of ERISA, then the
Administrator may, in its sole discretion, terminate the Participant's
participation in this Plan, and distribute all amounts credited to the
Participant's Account in a single lump sum payment. Any distribution under
this Section 4.10 will be made at the time the Administrator determines in
its sole discretion.
4.11 Tax Withholding. A Ferro Group Company may withhold, from any payment made
by it under this Plan, the amount or amounts as may be required for
purposes of complying with the tax withholding or other provisions of the
Code or the Social Security Act or any state or local income or employment
tax act or for purposes of paying any estate, inheritance or other tax
attributable to any amounts payable hereunder.
4.12 Inability to Locate Participant. If a Ferro Group Company or the
Administrator notifies a Participant or Beneficiary of an entitlement to an
amount under this Plan and the Participant or Beneficiary fails to claim
the amount or to disclose the location of the Participant or Beneficiary
within three years thereafter, then, except as otherwise required by law,
if the location of one or more of the next of kin of the Participant or
Beneficiary is known to the Ferro Group Company or the Administrator, the
Administrator may direct distribution of the amount to any one or more or
all of the next of kin, and in such proportions as the Administrator, in
its sole discretion, determines. If the location of none of the foregoing
persons can be determined, the Administrator will direct that the amount
payable to the Participant or Beneficiary be forfeited. If, after the
forfeiture, the Participant or Beneficiary later claims the benefit under
this Plan, then the benefit will be reinstated without interest or earnings
from the date of forfeiture. If a benefit payable to a Participant or
Beneficiary that cannot be located is subject to escheat under state law,
then no further benefit will be payable with respect to any Participant for
whom payment was made by the Administrator according to the escheat
provisions of state law.
ARTICLE V
RIGHTS OF PARTICIPANTS
5.1 Creditor Status of Participants. The Elective Amounts of a Participant
shall be merely unfunded, unsecured promises of the Ferro Group Company (by
which the Participant is employed) to make benefit payments in the future
and shall be liabilities solely against the general assets of such Ferro
Group Company. Except as provided in Section 5.6, Ferro and the other Ferro
Group Companies shall not be required to segregate, set aside or escrow the
Elective Amounts nor any earnings, gains and losses credited thereon. With
respect to amounts credited to any Account hereunder and any benefits
payable hereunder, a Participant and Beneficiary will have the status of
general unsecured creditors of the Ferro Group Company (by which the
Participant is employed), and may look only to that Ferro Group Company and
its general assets for payment of the Account and benefits.
5.2 Rights with Respect to the Trust. Any trust, and any assets held thereby to
assist Ferro or other Ferro Group Company in meeting its obligations under
this Plan, will in no way be deemed to controvert the provisions of Section
5.1 above.
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As Amended and Restated
June 30, 2004
5.3 Investments. In Ferro's sole discretion, the Ferro Group Companies may
acquire insurance policies, annuities or other financial vehicles for the
purpose of providing future assets of Ferro Group Companies to meet their
anticipated liabilities under this Plan. Such policies, annuities or other
investments, shall at all times be and remain unrestricted general property
and assets of the Ferro Group Companies or property of a trust established
pursuant to Article VI of this Plan. Participants and Beneficiaries will
have no rights, other than as general creditors, with respect to any such
policies, annuities or other acquired assets.
5.4 Method for Crediting Investment Return. As described in Section 3.8 above,
the Ferro Group Companies will maintain separate Accounts for the Elective
Amounts deferred by the Participant before 1999 and after 1998.
(A) Post-1998 Account. As elected by the Participant in his or her
Deferred Compensation Agreement, the Elective Amounts deferred after
1998 will, in the portions specified by the Participant in the
Deferred Compensation Agreement, be deemed to be invested in either
Ferro Common Stock or Treasury instruments, as described below.
(1) Ferro Stock. The Elective Amounts will be deemed to be invested
in shares of Ferro Common Stock as of the date the Elective
Amounts would have been paid to the Participant if they were not
deferred. The Account will be deemed to receive all dividends
(whether in stock or cash) and stock splits which would be
received if the Account was actually invested shares of Ferro
Common Stock, and such dividends and stock splits will be deemed
to be reinvested in shares of Ferro Common Stock as of the date
of their receipt. The investment in Ferro Common Stock will be
deemed to be made at the closing sale price of Ferro Common Stock
on the New York Stock Exchange Composite Tape (as reported in The
Wall Street Journal) on the trading day of the deemed investment.
(2) Treasury Instruments. The Elective Amounts will be deemed to be
invested in Treasury instruments yielding a rate of interest
equal to three hundred (300) basis points over the Ten-Year
Constant Treasury Maturity Yield as reported by the Federal
Reserve Board.
(B) Pre-1999 Account. Each Participant with an Account credited with
Elective Amounts deferred before 1999 will be deemed to be invested in
Treasury instruments as described in Section 5.4(A)(2) above, except
to the extent the Participant elected, in writing during the special
election period provided in 1999, for all or a portion of the Account
to be deemed to be invested in Ferro Common Stock. Under any such
election, the portion of the Account designated by the Participant to
be deemed invested in shares of Ferro Common Stock will be deemed
invested as of the date the Elective Amounts would have been paid to
the Participant if they were not deferred, and otherwise will be
valued and credited with dividends and stock splits, in the same
manner as described in Section 5.4(A)(1) above.
(C) Periodic Adjustment of Accounts. As of each Valuation Date, the
Participant's Account will be adjusted to reflect earnings and losses
on the deemed investments. To the extent the Account is deemed to be
invested in Ferro
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As Amended and Restated
June 30, 2004
stock, it will be credited as of each Valuation Date with hypothetical
appreciation and depreciation and earnings, as computed and determined
by the Administrator based on the value of Ferro Common Stock and its
dividends as provided in Section 5.4(A)(1) above. To the extent the
Participant's Account is deemed to be invested in Treasury
instruments, it will be credited as of each Valuation Date with
hypothetical earnings, as computed and determined by the Administrator
using a rate of interest equal to three hundred (300) basis points
over the Ten-Year Constant Treasury Maturity Yield as provided in
Section 5.4(A)(2) above. The Administrator will provide each
Participant annually with a statement showing the balance credited to
the Participant's Account as of the last day of the preceding Election
Year.
5.5 Bookkeeping Account Only. A Participant's Account is solely for the purpose
of measuring the amounts to be paid under this Plan. The Ferro Group
Companies will not fund or secure, and will not be permitted to fund or
secure, the Account in any way, and the Ferro Group Companies' obligation
to the Participants under this Plan is solely contractual.
5.6 Escrow Upon a Change in Control. Notwithstanding any provision of this Plan
to the contrary, within five days after the occurrence of a Potential
Change in Control, the Ferro Group Companies will establish an irrevocable
escrow account at a financial institution satisfactory to Ferro and the
Participants (or, in the case of death, the Participants' Beneficiaries),
determined by a majority vote of such Participants and Beneficiaries, to
keep on deposit in the escrow account an amount at least equal to the total
balances of the Accounts in the Plan determined as of the end of the
calendar month immediately preceding the occurrence of a Potential Change
in Control, with such date being the Valuation Date for this purpose. The
amount required to be kept on deposit in the escrow account by the Ferro
Group Companies will be recalculated as of each Valuation Date. The escrow
account will remain subject to the claims of creditors of the Ferro Group
Companies and will have the other characteristics required to preserve the
unfunded status of this Plan as provided under Section 1.4. Subject to the
later provisions of this Section, the escrow amount will be kept on deposit
at all times after the expiration of five days following the occurrence of
a Potential Change in Control, or a Change in Control, whichever occurs
earlier.
If a Change in Control does not occur within twelve months after the
occurrence of a Potential Change in Control, Ferro may request the escrow
agent to return to the Ferro Group Companies the amounts in escrow.
Otherwise, amounts deposited in the escrow account will be paid out by the
escrow agent only to:
(A) the Participant or Beneficiary, in such amounts as the Participant or
Beneficiary certify to the escrow agent as amounts that the Ferro
Group Company is in default in paying under the terms of this Plan or
a related Deferred Compensation Agreement; or
(B) the Ferro Group Companies, to the extent that the amount on deposit
exceeds the total balances of the Accounts in the Plan determined as
of the end of the calendar month immediately preceding the occurrence
of a Potential Change in Control, reduced by any payments made, and as
specified in joint written instructions from the affected Participants
and Beneficiaries and Ferro to the escrow agent or in a final arbitral
award.
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As Amended and Restated
June 30, 2004
Ferro will have the right to instruct the escrow agent to invest all or any
portion of the escrow account in time deposits or certificates of deposit
with, or repurchase or other obligations of, any "bank" (as determined by
Ferro), or obligations issued or guaranteed by the United States or any of
its agencies or instrumentalities, provided that no investment will be for
a period of more than ninety (90) days. The escrow agent will have no
liability for following the instructions of Ferro regarding any such
investment, or for any loss in the value of the escrow account as a
consequence of any such investment or its liquidation.
The Ferro Group Companies may meet their obligation to keep amounts on
deposit in the escrow account through deposits of assets, one or more
letters of credit deposited in escrow, any combination of the foregoing.
The Ferro Group Companies will have the right to substitute one form of
permitted deposit in the escrow account for another form of permitted
deposit at any time.
ARTICLE VI
TRUST
6.1 Establishment of Trust. Notwithstanding any other provision or
interpretation of this Plan, Ferro may establish a Trust in which to hold
cash, insurance policies or other assets that may be used to make, or
reimburse Ferro or any other Ferro Group Company for, payments to the
Participants or Beneficiaries of all or part of the benefits under this
Plan. Any Trust assets shall at all times remain subject to the claims of
general creditors of Ferro or any other Ferro Group Company in the event of
the insolvency of Ferro or such other Ferro Group Company as more fully
described in the Trust.
6.2 Obligation of the Ferro Group Companies. Notwithstanding the fact that a
Trust may be established under Section 6.1, the Ferro Group Companies shall
remain liable for paying the benefits under this Plan. However, any payment
of benefits to a Participant or Beneficiary made by a Trust will satisfy
the appropriate Ferro Group Company's obligation to make payment to such
person under this Plan.
6.3 Trust Terms. A Trust established under Section 6.1 may contain any terms as
Ferro may determine to be necessary or desirable. Ferro may terminate or
amend a Trust established under Section 6.1 at any time, and in any manner
it deems necessary or desirable, subject to the terms of any agreement
under which any Trust is established or maintained.
ARTICLE VII
ADMINISTRATION AND CLAIMS PROCEDURE
7.1 Administrator. The Administrator will be Ferro, acting by and through
Ferro's Corporate Human Resources Department, unless the Board of
Directors, acting itself or through an appropriate committee, designates
otherwise.
7.2 General Rights, Powers, and Duties of Administrator. The Administrator will
be the Plan administrator under ERISA. The Administrator will be
responsible for the general administration of this Plan and will have all
powers as may be necessary to carry
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As Amended and Restated
June 30, 2004
out the provisions of this Plan and may, from time to time, establish rules
for the administration of this Plan and the transaction of this Plan's
business. In addition to any powers, rights and duties set forth elsewhere
in this Plan, it will have the following powers and duties:
(A) To enact rules, regulations, and procedures and to prescribe the use
of such forms as it deems advisable;
(B) To appoint or employ agents, attorneys, actuaries, accountants,
assistants or other persons (who may also be Participants in this Plan
or be employed by or represent a Ferro Group Company) at the expense
of the Ferro Group Companies, as it deems necessary to keep its
records or to assist it in taking any other action authorized or
required under this Plan;
(C) To interpret this Plan, and to resolve ambiguities, inconsistencies
and omissions, to determine any question of fact, to determine the
right to benefits of, and the amount of benefits, if any, payable to,
any person in accordance with the provisions of this Plan and resolve
all questions arising under this Plan;
(D) To administer this Plan in accordance with its terms and any rules and
regulations it establishes; and
(E) To maintain records concerning this Plan as it deems sufficient to
prepare reports, returns and other information required by this Plan
or by law; and
(F) To direct a Ferro Group Company to pay benefits under this Plan, and
to give other directions and instructions as may be necessary for the
proper administration of this Plan.
Any decision, interpretation or other action made or taken by the
Administrator arising out of or in connection with this Plan, will be
within the absolute discretion of the Administrator, and will be final,
binding and conclusive on Ferro, all other Ferro Group Companies, and all
Participants and Beneficiaries and their respective heirs, executors,
administrators, successors and assigns. The Administrator's determinations
under this Plan need not be uniform, and may be made selectively among
Participants, whether or not they are similarly situated.
7.3 Information to Be Furnished to the Administrator. A Ferro Group Company
will furnish the Administrator with such data and information as it may
reasonably require. The records of a Ferro Group Company will be
determinative of each Participant's period of employment, termination of
employment, personal data, and data regarding Base Annual Salary, Bonus and
Performance Share Award, and all deferrals under this Plan. Participants
and their Beneficiaries will furnish to the Administrator such evidence,
data or information and execute such documents as the Administrator
requests.
7.4 Claim for Benefits. A Participant or Beneficiary will make all claims for
payment under his Plan in writing to the Administrator in the manner
prescribed by the Administrator. The Administrator will process each claim
and determine entitlement to benefits within 90 days after the
Administrator receives a completed application for benefits. If the
Administrator needs an extension of time for processing, then the
Administrator will notify the claimant before the end of the initial 90-day
period. The extension notice will indicate the special circumstances
requiring an extension of
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As Amended and Restated
June 30, 2004
time and the date as of which the Administrator expects to render the final
decision. In no event will such an extension exceed 90 days from the end of
the initial period.
7.5 Denial of Benefit. If a claim is wholly or partially denied by the
Administrator, then the Administrator will notify the claimant of the
denial of the claim in a writing delivered in person or mailed by first
class mail to the claimant's last known address. The notice of denial will
contain:
(A) the specific reason or reasons for denial of the claim;
(B) a reference to the relevant Plan provisions upon which the denial is
based;
(C) a description of any additional material or information necessary for
the claimant to perfect the claim, together with an explanation of why
the material or information is necessary; and
(D) an explanation of this Plan's claim review procedure.
If no notice is provided, the claim will be deemed denied. The
interpretations, determinations and decisions of the Administrator will be
final and binding upon all persons with respect to any right, benefit and
privilege hereunder, subject to the review procedures set forth in this
Article.
7.6 Request for Review of a Denial of a Claim for Benefits. Any claimant or any
authorized representative of the claimant whose claim for benefits under
this Plan has been denied or deemed denied, in whole or in part, may upon
written notice to the Appeals Committee request a review by the Appeals
Committee of the denial of the claim. The claimant will have 60 days from
the date the claim is deemed denied or 60 days from receipt of the notice
denying the claim, as the case may be, in which to request a review by
written application delivered to the Appeals Committee, which must specify
the relief requested and the reason such claimant believes the denial
should be reversed.
7.7 Appeals Procedure. The Appeals Committee will review the facts and relevant
documents including this Plan, and interpret the facts and relevant
documents including this Plan to render a decision on the claim. The review
may be of written briefs submitted by the claimant, or at a hearing, or by
both, as deemed necessary or appropriate by the Appeals Committee. Any
hearing will be held in the main office of Ferro, or such other location as
the Appeals Committee may select, on the date and at the time as the
Appeals Committee designates by giving at least 15-days' notice to the
claimant, unless the claimant accepts shorter notice. The notice will
specify that the claimant must indicate in writing, at least five days in
advance of the hearing, the claimant's intention to appear at the appointed
time and place, or the hearing will be automatically cancelled. The reply
will specify any other persons who will accompany the claimant to the
hearing, or such other persons will not be admitted to the hearing. The
Appeals Committee will make every effort to schedule the hearing on a day
and at a time that is convenient to both the claimant and the Appeals
Committee. The claimant, or his duly authorized representative, may review
all pertinent documents relating to the claim in preparation for the
hearing and may submit issues and comments in writing before or during the
hearing.
7.8 Decision Upon Review of Denial of Claim for Benefits. In making its
decision, the Appeals Committee will have full power and discretion to
interpret this Plan, to resolve
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As Amended and Restated
June 30, 2004
ambiguities, inconsistencies and omissions, to determine any question of
fact, and to determine the right to benefits of, and the amount of
benefits, if any, payable to, any person in accordance with the provisions
of this Plan. The Appeals Committee will render a decision on the claim
reviewed no more than 60 days after the receipt of the claimant's request
for review, unless special circumstances (such as the need to hold a
hearing) require an extension of time, in which case the 60-day period may
be extended up to 120 days. The Appeals Committee will provide written
notice of its decision to the claimant within the time frame specified. The
notice will include the specific reasons for the decision and contain
specific references to the relevant Plan provisions upon which the decision
is based. If notice of the decision is not provided within the time frame
specified, the claim will be deemed denied on review. The decision of the
Appeals Committee will be final and binding in all respects on the
Administrator, the Ferro Group Company and claimant involved.
7.9 Establishment of Appeals Committee. The Chief Executive Officer of Ferro
will appoint three or more persons to serve as members of the Appeals
Committee. The Chief Executive Officer may appoint one Appeals Committee to
hear all appeals of denied benefits that arise under this Plan, or may
appoint a new Appeals Committee each time an Appeals Committee is needed to
hear an appeal of denied benefits that arises under this Plan. The members
of the Appeals Committee will remain in office at the will of the Chief
Executive Officer, and the Chief Executive Officer may remove any of the
members with or without cause. A member of the Appeals Committee may resign
upon written notice to the remaining member or members of the Appeals
Committee and to the Chief Executive Officer, respectively. The fact that a
person is a Participant or a former Participant or a prospective
Participant will not disqualify that person from acting as a member of the
Appeals Committee. No member of the Appeals Committee will be disqualified
from acting on any question because of the member's interest in the
question, except that no member of the Appeals Committee may act on any
claim which the member has brought as a Participant, former Participant, or
Beneficiary under this Plan. In case of the death, resignation or removal
of any member of the Appeals Committee, the remaining members will act
until a successor-member is appointed by the Chief Executive Officer. At
the Administrator's request, the Chief Executive Officer will notify the
Administrator in writing of the names of the members of the Appeals
Committee, of any and all changes in the membership of the Appeals
Committee, of the member designated as Chairman, and the member designated
as Secretary, and of any changes in either office. Until notified of a
change, the Administrator will be protected in assuming that there has been
no change in the membership of the Appeals Committee or the designation of
Chairman or of Secretary since the last notification was filed with it. The
Administrator will be under no obligation at any time to inquire into the
membership of the Appeals Committee or its officers. All communications to
the Appeals Committee will be addressed to its Secretary at the address of
the Company.
7.10 Operation of the Appeals Committee. On all matters and questions, the
decision of a majority of the members of the Appeals Committee will govern
and control. A meeting need not be called or held to make any decision. The
Appeals Committee will appoint one of its members to act as its Chairman
and another member to act as Secretary. The terms of office of these
members will be determined by the Appeals Committee, and the Secretary
and/or Chairman may be removed by the other members of the Appeals
Committee for any reason which such other members may deem just and proper.
The Secretary will do all things directed by the Appeals Committee.
Although the Appeals Committee will act by decision of a majority of its
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As Amended and Restated
June 30, 2004
members as provided above, in the absence of written notice to the
contrary, every person may deal with the Secretary and consider the
Secretary's acts as having been authorized by the Appeals Committee. Any
notice served or demand made on the Secretary will be deemed to have been
served or made upon the Appeals Committee.
7.11 Limitation of Duties. Ferro, the other Ferro Group Companies, the
Administrator, the Appeals Committee, and their respective officers,
members, employees and agents will have no duty or responsibility under
this Plan other than the duties and responsibilities expressly assigned or
delegated to them pursuant to this Plan. None of them will have any duty or
responsibility with respect to those duties or responsibilities assigned or
delegated to another.
7.12 Agents. The Administrator and the Appeals Committee may hire any attorneys,
accountants, actuaries, agents, clerks, and secretaries as it may deem
desirable in the performance of its duties, any of whom may also be
advisors to any Ferro Group Company or any subsidiary or affiliated
company.
7.13 Expenses of Administration. No fee or compensation will be paid to the
Administrator or any member of the Appeals Committee for their performance
of services as such. Ferro will bear all other expenses incurred in the
administration of this Plan except to the extent Ferro determines that the
expenses are allocable to, and should be paid by, one or more of the Ferro
Group Companies.
7.14 Indemnification. In addition to whatever rights of indemnification any
member or employee of the Administrator, the Appeals Committee, Ferro or
other Ferro Group Company under this Plan may be entitled to under the
articles of incorporation, regulations or bylaws of the Ferro Group
Companies, under any provision of law or under any other agreement, the
Ferro Group Companies will satisfy any liability actually incurred by any
member or employee including reasonable expenses and attorneys' fees, and
any judgments, fines, and amounts paid in settlement, in connection with
any threatened, pending or completed action, suit or proceeding which is
related to the exercise or failure to exercise by any member or employee
any powers, authority, responsibilities or discretion provided under this
Plan or reasonably believed by a member or employee to be provided under
this Plan, and any action taken by a member or employee in connection with
such exercise or failure to exercise. This indemnification for all such
acts taken or omitted is intentionally broad, but will not provide
indemnification for embezzlement or diversion of Plan funds for the benefit
of any member or employee. This indemnification will not be provided for
any claim by a Ferro Group Company or a subsidiary or affiliated company
thereof against any member or employee. No indemnification will be provided
to any person who is not an individual.
7.15 Limitation of Administrative Liability. Neither Ferro, any Ferro Group
Company, the Administrator, the Appeals Committee, nor any of their members
or employees will be liable for any act taken by such person or entity
pursuant to any provision of this Plan except for gross abuse of the
discretion given them under this Plan. No member of the Administrator or
Appeals Committee will be liable for the act of any other member. No member
of the Board of Directors will be liable to any person for any action taken
or omitted in connection with the administration of this Plan.
7.16 Limitation of Sponsor Liability. Any right or authority exercisable by
Ferro or Board of Directors pursuant to any provision of this Plan will be
exercised in Ferro's capacity
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As Amended and Restated
June 30, 2004
as sponsor of this Plan, or on behalf of Ferro in such capacity, and not in
a fiduciary capacity, and may be exercised without the approval or consent
of any person in a fiduciary capacity. Neither Ferro, nor the Board of
Directors, nor any of their respective officers, members, employees, agents
and delegates, will have any liability to any party for its exercise of any
such right or authority.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendment, Modification and Termination. Subject to Section 8.4 below, this
Plan may be amended, modified or terminated by Ferro at any time, or from
time to time, by action of an appropriate Ferro officer authorized or
ratified by the Board of Directors. No amendment, modification or
termination will be effective if it:
(A) causes this Plan to be for a purpose other than the exclusive benefit
of the Participants, or
(B) reduces the amounts credited to any Participant's Account or adversely
affects the right of any Participant or Beneficiary to receive payment
of the Account as provided under this Plan, determined as of the date
of the amendment.
The prior provisions notwithstanding, this Plan may be amended to:
(1) reduce or eliminate the ability for Participants to defer future
Elective Amounts under this Plan;
(2) reduce or eliminate the future deemed interest or earnings
credited to the amounts held in a Participant's Account;
(3) comply with any law; or
(4) preserve the intended deferral of taxation for the benefit of all
Participants Accounts.
8.2 Effect of Amendment on Distributions. If this Plan is amended to prohibit
future Elective Amounts, then the amounts credited to Participants'
Accounts will be distributed as provided in Article IV above. If this Plan
is terminated, then the Participants will receive distribution of the
amounts credited to their Accounts:
(A) in a single lump sum cash payment with respect to the portion of the
Account deemed to be invested in Treasury instruments, and
(B) in a single lump sum distribution of shares of Ferro Common Stock with
respect to the portion of the Account deemed to be invested in Ferro
Common Stock.
If this Plan is terminated, then the amounts credited to the Participant's
Accounts will be determined as of the Valuation Date on or immediately
preceding the date of Plan termination.
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As Amended and Restated
June 30, 2004
8.3 Actions Binding on Ferro Group Companies. Any amendments made to this Plan
will be binding on all the Ferro Group Companies without the approval or
consent of the Ferro Group Companies other than Ferro. Ferro may, by
amendment, also terminate this Plan on behalf of all or any one of the
other Ferro Group Companies in its sole discretion.
8.4 Termination or Amendment After Change in Control. If a Change of Control
occurs, then, for a period of two (2) calendar years following such Change
in Control, Ferro may not amend or terminate this Plan without the prior
written consent of all Participants.
ARTICLE IX
FERRO GROUP COMPANIES
9.1 List of Ferro Group Companies. The Ferro Group Companies as of the
Amendment and Restatement Date are Ferro and the subsidiaries and
affiliates of Ferro listed on Appendix B to this Plan. Ferro may from time
to time add or remove Ferro subsidiaries and affiliates from the list of
Ferro Group Companies by written action of its Chief Executive Officer. The
addition or deletion will not require a formal amendment to this Plan.
9.2 Delegation of Authority. Ferro is fully empowered to act on behalf of
itself and the other Ferro Group Companies as it may deem appropriate in
maintaining this Plan and any Trust. The adoption by Ferro of any amendment
to this Plan or any Trust, or the termination of this Plan or any Trust,
will constitute and represent, without any further action on the part of
any Ferro Group Company, the approval, adoption, ratification or
confirmation by each Ferro Group Company of any amendment or termination.
In addition, the appointment of or removal by Ferro of any Administrator,
any trustee or other person under this Plan or any Trust will constitute
and represent, without any further action on the part of any Ferro Group
Company, the appointment or removal by each Ferro Group Company of such
person.
ARTICLE X
MISCELLANEOUS
10.1 No Implied Rights. Neither the establishment of this Plan nor any amendment
of this Plan will be construed as giving any Participant, Beneficiary or
any other person any legal or equitable right unless the right is
specifically provided for in this Plan or conferred by specific action of
Ferro in accordance with the terms and provisions of this Plan. Except as
expressly provided in this Plan, neither Ferro nor any other Ferro Group
Company will be required or be liable to make any payment under this Plan.
10.2 No Right to Ferro Group Company Assets. Neither the Participant nor any
other person will acquire by reason of this Plan any right in or title to
any assets, funds or property of a Ferro Group Company whatsoever
including, without limitation, any specific funds, assets or other property
which a Ferro Group Company, in its sole discretion, may set aside in
anticipation of a liability hereunder. Any benefits which become payable
under this Plan will be paid from the general assets of the appropriate
Ferro Group Company. No assets of the Ferro Group Companies will be held in
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As Amended and Restated
June 30, 2004
any way as collateral security for the fulfilling of the obligations of the
Ferro Group Companies under this Plan. No assets of the Ferro Group
Companies will be pledged or otherwise restricted in order to meet the
obligations of this Plan. The Participant will have only a contractual
right to the amounts, if any, payable hereunder unsecured by any asset of a
Ferro Group Company. Nothing contained in this Plan constitutes a guarantee
by a Ferro Group Company that the assets of a Ferro Group Company will be
sufficient to pay any benefit to any person.
10.3 No Employment Rights Created. This Plan will not be deemed to constitute a
contract of employment between any of the Ferro Group Companies and any
Participant, or to confer upon any Participant or employee the right to be
retained in the service of any Ferro Group Company for any period of time,
nor shall any provision of this Plan restrict the right of any Ferro Group
Company to discharge or otherwise deal with any Participant or other
employees, with or without cause. Nothing in this Plan will be construed as
fixing or regulating the Base Annual Salary, Bonus or Performance Share
Award payable to any Participant or other employee of a Ferro Group
Company.
10.4 Offset. If at the time payment is to be made under this Plan the
Participant or the Beneficiary or both are indebted or obligated to a Ferro
Group Company, then the payment to be made to the Participant or the
Beneficiary or both may, at the discretion of the Administrator at the
request of the Ferro Group Company, be reduced by the amount of the
indebtedness or obligation, provided, however, that an election by the
Ferro Group Company not to request a reduction will not constitute a waiver
of the Ferro Group Company's claim for such indebtedness or obligation.
10.5 No Assignment. Neither the Participant nor any other person will have any
voluntary or involuntary right to commute, sell, assign, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or
convey, in advance of actual receipt of the amount, if any, payable under
this Plan, or any part of the amount payable from this Plan, and any
attempt to do so will be void. All benefits or amounts credited to Accounts
under this Plan are expressly declared to be unassignable and
non-transferable. No part of the benefits or amounts credited to Accounts
under this Plan will be, before actual payment, subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by the Participant or any other person, or be transferable
by operation of law in the event of the Participant's or any other person's
bankruptcy or insolvency.
10.6 Notice. Any notice required or permitted to be given under this Plan will
be sufficient if in writing and hand delivered, or sent by registered or
certified mail or by overnight delivery service, and:
(A) if given to a Ferro Group Company, delivered to the principal office
of Ferro, directed to the attention of the General Counsel; or
(B) if given to a Participant or Beneficiary, delivered to the last post
office address as shown on the Ferro Group Company's or the
Administrator's records.
Notice will be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or the receipt for
registration or certification.
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As Amended and Restated
June 30, 2004
10.7 Governing Laws. This Plan will be construed and administered according to
the internal substantive laws of the State of Ohio to the extent not
preempted by the laws of the United States of America.
10.8 Incapacity. If the Administrator determines that any Participant or
Beneficiary entitled to payment under this Plan is a minor, a person
declared incompetent or a person incapable of handling his or her property,
the Administrator may direct any payment to the guardian, legal
representative or person having the care and custody of the minor,
incompetent or incapable person. The Administrator may require proof of
minority, incompetence, incapacity or guardianship, as it may deem
appropriate before making any payment. The Administrator will have no
obligation thereafter to monitor or follow the application of amounts so
paid. Payments made pursuant to this Section will completely discharge this
Plan, any Trust, the Administrator, and the Ferro Group Companies with
respect to the payments.
10.9 Court Ordered Distributions. The Administrator is authorized to make any
payments directed by court order in any action in which this Plan or the
Administrator is named as a party. In addition, if a court determines that
a spouse or former spouse or dependent or former dependent of a Participant
has an interest in the Participant's Account under this Plan in connection
with a property settlement or otherwise, the Administrator, in its sole
discretion, will have the right, notwithstanding any election made by a
Participant, to immediately distribute the spouse's or former spouse's or
dependent's or former dependent's interest in the Participant's Account
under this Plan to that spouse or former spouse or dependent or former
dependent.
10.10 Administrative Forms. All applications, elections and designations in
connection with this Plan made by a Participant or Beneficiary will become
effective only when duly executed on forms provided by the Administrator
and filed with the Administrator.
10.11 Independence of Plan. Except as otherwise expressly provided, this Plan
will be independent of, and in addition to, any other employee benefit
agreement or plan or any rights that may exist from time to time under any
other agreement or plan.
10.12 Responsibility for Legal Effect. Neither Ferro, any other Ferro Group
Company, the Administrator, nor any officer, member, delegate or agent of
any of them, makes any representations or warranties, express or implied,
or assumes any responsibility concerning the legal, tax, or other
implications or effects of this Plan.
10.13 Successors. The terms and conditions of this Plan will inure to the
benefit of and bind Ferro, the Ferro Group Companies, the Administrator and
its members, the Participants, their Beneficiaries, and the successors,
assigns, and personal representatives of any of them.
10.14 Headings and Titles. The Section headings and titles of Articles used in
this Plan are for convenience of reference only and are not to be
considered in construing this Plan.
10.15 Appendices. The Appendices to this Plan constitute an integral part of
this Plan and are hereby incorporated into this Plan by this reference.
10.16 Severability. If any provision or term of this Plan, or any agreement or
instrument required by the Administrator, is determined by a judicial,
quasi-judicial or administrative body to be void or not enforceable for any
reason, all other provisions or
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As Amended and Restated
June 30, 2004
terms of this Plan or the agreement or instrument will remain in full force
and effect and will be enforceable as if the void or nonenforceable
provision or term had never been a part of this Plan, or the agreement or
instrument.
10.17 Actions by Ferro. Except as otherwise provided in this Plan, all actions
of Ferro under this Plan will be taken by the Board of Directors, and be
evidenced in a writing executed by an appropriate officer duly authorized.
10.18 Spousal Consent and Release. If, in the opinion of Ferro, any present,
former or future spouse of an employee entitled to benefits from this Plan
shall by reason of law appear to have any interest in the Plan benefits
that may be or become payable hereunder to such employee, Ferro may as a
condition precedent to the making of a benefit payment hereunder, require
such written consent or release as in its discretion it shall determine to
be necessary, desirable or appropriate either to prevent or avoid any
conflict or multiplicity of claims, or to protect the rights of any such
present, former or future spouse with respect to the payment of any
benefits under this Plan.
10.19 Overpayments and Repayments. In the event that Ferro determines that the
benefits actually paid under this Plan exceed the benefits that were
properly payable to a Participant or Beneficiary pursuant to this Plan,
Ferro may exercise any legal remedies available.
10.20 References to Sections of Law. References herein to the Code are to the
Internal Revenue Code of 1986, as heretofore and hereafter amended, and to
similar provision of subsequent federal law. References herein to ERISA are
to the Employee Retirement Income Security Act of 1974, as heretofore and
hereafter amended, and to similar provisions of subsequent law.
To evidence this amended and restated FERRO CORPORATION EXECUTIVE EMPLOYEE
DEFERRED COMPENSATION PLAN, Ferro Corporation, as Plan sponsor, has caused this
document to be executed by its duly authorized officers as of this 30th day of
June, 2004.
FERRO CORPORATION
By: /s/ James C. Bays
------------------------------------
James C. Bays
Vice President & General Counsel
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As Amended and Restated
June 30, 2004
Appendix A
DEFINITIONS
For purposes of this Plan, the following terms have the meanings set forth
below where used in this Plan and identified with initial capital letters:
TERM MEANING
---- -------
Account or Elective Account For each Participant the bookkeeping account
maintained by the Ferro Group Company to reflect
the Participant's Elective Amounts for an Election
Year and all earnings, gains and losses thereon. A
Participant's Account shall not constitute or be
treated as a trust fund of any kind.
Administrator As defined in Section 7.1 of this Plan.
Amendment and June 30, 2004.
Restatement Date
Base Annual Salary For any Participant the gross base salary payable
during an Election Year by a Ferro Group Company,
unreduced by any amounts deferred under the Ferro
Corporation Savings and Stock Ownership Plan, this
Plan, or any other plan maintained by the Ferro
Group Company. "Base Annual Salary" does not
include bonuses, commissions, incentive
compensation, any extraordinary compensation of a
recurring or nonrecurring nature, compensation
paid in a form other than cash, or contributions,
accruals, or benefits under the Ferro Corporation
Savings and Stock Ownership Plan, this Plan, or
any other plan maintained by the Ferro Group
Company (other than amounts elected to be deferred
by the Participant).
Beneficial Owner "Beneficial owner" within the meaning of Rule
13d-3 under the Exchange Act.
Beneficiary As defined in 4.9 of this Plan.
Board of Directors Ferro's Board of Directors.
Bonus The gross monies awarded and payable to a
Participant during an Election Year under the
Ferro Annual Incentive Compensation Plan, as it
may be amended from time to time, unreduced by any
amounts deferred under the Ferro SSOP, this Plan,
or any other plan maintained by the Ferro Group
Company.
Change in Control A change in the control of Ferro that is required
to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under
the Exchange Act.
-i-
As Amended and Restated
June 30, 2004
Appendix A
TERM MEANING
---- -------
For purposes of this definition, a Change in
Control will be deemed to have occurred if and
when:
(a) any "person" (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial
owner, directly or indirectly, of securities
of Ferro representing twenty-five percent
(25%) or more of the combined voting power of
Ferro's outstanding voting securities; or
(b) during any period of two consecutive years,
the individuals set forth below in
sub-paragraph (1) and (2) cease for any
reason to constitute at least a majority of
the Board of Directors:
(1) the individuals who at the beginning of
such period constituted the Board of
Directors, and
(2) any new director (other than a director
designated by a person who has entered
into an agreement or arrangement with
Ferro to effect a transaction described
in clause (a) or (c) of this definition)
whose appointment, election, or
nomination for election by Ferro's
shareholders, was approved by a vote of
at least two-thirds 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; or
(c) a merger or consolidation of Ferro or one of
its subsidiaries is consummated with or into
any other corporation, other than a merger or
consolidation which would result in the
holders of the voting securities of Ferro
outstanding immediately prior thereto holding
securities which represent immediately after
such merger or consolidation more than 50% of
the combined voting power of the voting
securities of either Ferro or the other
entity which survives such merger or
consolidation or the parent of the entity
which survives such merger or consolidation;
or
(d) a sale or disposition by Ferro of all or
substantially all Ferro's assets is
consummated.
Code The Internal Revenue Code of 1986, as amended, and
any lawful regulations or other pronouncements
promulgated that Code.
-ii-
As Amended and Restated
June 30, 2004
Appendix A
TERM MEANING
---- -------
Deferred Compensation An agreement executed between a Participant and
Agreement the Ferro Group Company whereby a Participant
agrees to defer a portion of the Participant's
Base Annual Salary, Bonus or Performance Share
Award as provided under this Plan, and the Ferro
Group Company agrees to make benefit payments in
accordance with the provisions of this Plan.
Dependent Any of the following persons who receives over
half of their financial support from the
Participant: a spouse, a son or daughter (or the
descendent of either); a stepson or stepdaughter;
a brother, sister, stepbrother or stepsister; a
father or mother (or ancestor of either); a
stepfather or stepmother; a nephew or niece; an
uncle or aunt; a son-in-law, daughter-in-law,
father-in-law, mother-in-law, brother-in-law or
sister-in-law; or any other person whose principal
place of residence is the Participant's home and
who is a member of the household.
Disability Any disability that qualifies a Participant for
payment of benefits under a Ferro Group Company
long-term disability plan. The determination of
whether a Participant suffers a Disability will be
made by the Ferro Group Company long-term
disability plan.
Election Year A calendar year in respect of which a Participant
makes an election under this Plan.
Elective Amount An amount equal to the amount by which a
Participant's Base Annual Salary, Bonus or
Performance Share Award are reduced pursuant to
Section 3.4 of this Plan in respect of a given
Election Year.
Eligible Employee An Executive Employee of a Ferro Group Company who
has satisfied the eligibility requirement of
Section 3.1 of this Plan.
Entry Date With respect to a given Election Year, January 1
of such Election Year or, with respect to an
employee who first becomes an Eligible Employee
after January 1 of that Election Year, the first
day of the month on or after the date the Eligible
Employee completes a Deferred Compensation
Agreement pursuant to Section 3.2 of this Plan.
ERISA The Employee Retirement Income Security Act of
1974, as amended, and any lawful regulations or
pronouncements issued under that Act.
-iii-
As Amended and Restated
June 30, 2004
Appendix A
TERM MEANING
---- -------
Exchange Act The Securities Exchange Act of 1934, as amended,
and any lawful regulations or pronouncements
issued under that Act.
Executive Employee A management employee of a Ferro Group Company who
is in Grade 22 or higher in the Executive Payroll
Group and who is eligible to participate in the
Ferro Annual Incentive Compensation Plan.
Ferro As defined in Section 1.2 of this Plan. Such term
also includes any successor corporation or
business organization that subsequently assumes
Ferro's duties and obligations under this Plan.
Ferro Common Stock The Common Stock of Ferro, par value $1.00, per
share.
Ferro Group Companies As defined in Section 9.1 of this Plan.
Ferro SSOP Ferro's Savings and Stock Ownership Plan.
Financial Hardship A severe financial hardship and unexpected need
for cash resulting from:
(a) a sudden and unexpected illness or accident
of the Participant or a Dependent of the
Participant,
(b) loss of the Participant's property due to
casualty, or
(c) such other similar extraordinary and
unforeseeable circumstances or emergencies
arising as a result of events beyond the
control of the Participant, as determined in
the sole discretion of the Administrator.
Long-Term Incentive Ferro's 2003 Long-Term Incentive Compensation
Compensation Plan Plan, as the same may be amended from time to
time.
Participant An Executive Employee of a Ferro Group Company who
is designated to be an Eligible Employee pursuant
to Section 3.2 of this Plan, who enters into a
Deferred Compensation Agreement, and who has
commenced Base Annual Salary, Bonus or Performance
Share Award reductions pursuant to that Deferred
Compensation Agreement. A Participant will cease
to be a Participant, and shall become a former
Participant, upon the earliest of the following:
(a) Termination of Employment,
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As Amended and Restated
June 30, 2004
Appendix A
TERM MEANING
---- -------
(b) the date the employee ceases to be an
Eligible Employee, or
(c) the date the employee's participation in this
Plan is terminated by the Administrator
pursuant to Section 4.10 of this Plan or
otherwise.
Performance Share Award The gross monies awarded and payable to a
Participant during an Election Year in respect of
Performance Shares awarded under the Long-Term
Incentive Compensation Plan or the prior
Performance Share Plan, unreduced by any amounts
deferred under the Ferro SSOP, this Plan, or any
other plan maintained by the Ferro Group Company.
Performance Share Plan Ferro's 1997 Performance Share Plan, as amended.
Person A "person" as defined under Section 3(a)(9) of the
Exchange Act as modified and used in Sections
13(d) and 14(d) of the Exchange Act, excluding:
(a) Ferro or any of its subsidiaries;
(b) a trustee or other fiduciary holding
securities under an employee benefit plan of
the Company (or of any of its affiliates as
defined under Rule 12b-2 under Section 12 of
the Exchange Act);
(c) an underwriter temporarily holding securities
pursuant to an offering of such securities;
or
(d) a corporation owned, directly or indirectly,
by the shareholders of Ferro in substantially
the same proportion as their ownership of the
stock of Ferro.
this Plan As defined in the Introduction to this Plan.
Potential Change in Control The occurrence of any of the following events:
(a) Ferro enters into an agreement which, if
consummated, would result in a Change in
Control;
(b) Ferro or any Person publicly announces an
intention to take, or to consider taking,
actions which, if consummated, would
constitute a Change in Control;
(c) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of
Ferro representing
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As Amended and Restated
June 30, 2004
Appendix A
TERM MEANING
---- -------
20% or more of the then outstanding shares of
Ferro Common Stock or the combined voting
power of Ferro's then outstanding securities;
(d) any Person commences a solicitation (as
defined under Rule 14a-1 of the Exchange Act)
of proxies or consents which has the purpose
of effecting or would, if successful, result
in a Change in Control;
(e) a tender or exchange offer for voting
securities of Ferro, made by a Person, is
first published or sent or given (within the
meaning of Rule 14d-2(a) of the Exchange
Act); or
(f) the Board of Directors adopts a resolution
that a Potential Change in Control has
occurred.
Retirement Date The date a Participant first becomes eligible for
an early retirement benefit or a normal retirement
benefit as defined under the Ferro Corporation
Retirement Plan. Alternatively, in the case of a
Participant who is not covered under the Ferro
Corporation Retirement Plan, "Retirement Date"
means the date a Participant would first become
eligible for an early retirement benefit or a
normal retirement benefit if the Participant were
covered under the Ferro Corporation Retirement
Plan.
Termination of Employment A Participant's cessation of service with Ferro
and the other Ferro Group Companies, including
subsidiaries and affiliates of the foregoing, for
any reason whatsoever, whether voluntarily or
involuntarily, including by reason of retirement,
death, or Disability.
Trust The trust, if any, established pursuant to Section
7.1 of this Plan.
Valuation Date The last day of each quarter in the Election Year
and any other date or dates Ferro, in its sole
discretion, designates from time to time.
-vi-
As Amended and Restated
June 30, 2004
Appendix B
FERRO GROUP COMPANIES
The following are the Ferro Group Companies:
Ferro Corporation
FEM Inc.
Ferro Glass & Color Corporation
Ferro International Services, Inc.
Ferro Pfanstiehl Laboratories, Inc.