1
Exhibit 10.1
Agreement Between
Ferro Corporation and Frank A. Carragher
----------------------------------------
Frank A. Carragher ("FAC") and Ferro Corporation ("Ferro") hereby
voluntarily enter into the following Agreement:
1. Effective March 31, 1994, FAC shall cease to hold the
title of Senior Vice President, Chemicals and Polymers of Ferro, but shall
remain an employee of Ferro without specified duties, until the earlier of
February 4, 1997 or his death. FAC shall be retained on the payroll of Ferro
through March 31, 1994 at his salary level of $19,667.00 per month.
Compensation arrangements applicable after March 31, 1994 shall be as set forth
in this Agreement.
2. For the period April 1, 1994 through February 4, 1997, FAC
shall be retained on the payroll and shall be paid an aggregate salary of
$660,800, payable in equal installments in accordance with Ferro's salaried
employee payroll practices at the time of any such payment.
3. FAC shall be entitled to bonus participation applicable to
the year 1993 in accordance with the normal functioning and operation of the
bonus plan. Bonus payments will be made in accordance with the timing of
payments of bonus to other executive participants in the Ferro bonus program.
FAC shall not be entitled to any bonus applicable to years after 1993.
4. FAC will make himself available to Ferro for consultation
by telephone or in person at Ferro's headquarters in Cleveland, Ohio as Ferro
may from time to time reasonably request. No such request by Ferro shall
unreasonably interfere with new employment or other obligations or activities
which FAC may undertake, nor shall it impose travel expenses upon FAC unless
Ferro agrees to reimburse FAC for such expenses.
2
5. FAC will not be entitled to participate in the following
Ferro employee plans after March 31, 1994:
a. Salary continuation plan;
b. Long-term disability plan;
c. Workers' compensation benefits; and
d. Business travel accident insurance.
FAC will be entitled to participate in the following
employee plans (or their successor plans) as a continuing salaried employee
through February 4, 1997:
a. Ferro Flex Choice Program;
b. Savings and Stock Ownership Plan;
c. Salaried Employees Retirement Plan;
d. Supplemental Pension Agreement dated August 25,
1988; and
e. Excess Benefits Plan.
FAC's continued participation in such plans is subject
to the ongoing right of Ferro to modify, amend or discontinue such plans in any
manner, so long as any such modification, amendment or discontinuance is one of
general application, rather than one that uniquely discriminates against FAC.
Effective March 1, 1997, FAC shall be eligible to
participate as a retiree in the Ferro Salaried Retiree Medical Program (or any
successor plan), provided he follows the procedures in such plan to activate
his participation. In such case, FAC's contribution to the cost of any such
health and hospitalization plans that he participates in as a Ferro retiree
shall be calculated based upon his actual years of service with Ferro from date
of hire through February 4, 1997. If FAC dies prior to February 4, 1997, his
wife shall become eligible to
3
participate in the Ferro Salaried Retiree Medical Program or any successor plan
as if she were a qualified widow of a salaried retiree.
6. Commencing March 1, 1997, Ferro (or retirement plans
sponsored by Ferro) will pay to FAC a monthly pension, for the balance of his
lifetime, currently estimated at $9,270.00 per month. This amount has been
determined in accordance with the assumptions and procedures set forth in
Appendix I. In the event FAC predeceases his wife after pension payments
hereunder have commenced, his wife shall be entitled to receive a surviving
spouse's benefit as provided by the Ferro Salaried Employee Retirement Plan and
Excess Benefits Plan and Supplemental Pension Agreement dated August 25, 1988.
In the event FAC predeceases his wife before pension payments hereunder have
commenced, his wife shall be entitled to receive, (a) for the balance of the
period to February 4, 1997, those amounts which would otherwise be payable to
FAC under Section 2 hereof, were it not for his death, and (b) such surviving
spousal pension benefits as are provided under Ferro's qualified Salaried
Employee Retirement Plan and Excess Benefits Plan as though FAC had been an
active salaried employee at the time of his death (but not including Ferro's
Supplemental Pension Agreement dated August 25, 1988).
7. FAC shall be deemed to have retired as of February 4, 1997,
with respect to his rights under the Ferro Stock Option Plan, and the stock
option awards and agreements pursuant to such Plan shall be determined under
the provisions of that Plan and those agreements, based upon termination of
employment through such deemed retirement, on February 4, 1997. No new stock
option awards shall be made to FAC after the date of this Agreement.
4
8. FAC shall be deemed to have retired as of March 31, 1994,
with respect to his rights under the Ferro Performance Share Plan, and the
Performance Share Awards and Performance Share Award Agreements pursuant to
such Plan shall be determined under the provisions of that Plan and those
agreements, based upon termination of employment through such deemed early
retirement, on March 31, 1994. No new performance share awards shall be made
to FAC after the date of this Agreement.
9. Ferro shall have no obligation to FAC on account of unused
vacation, illness or personal absence, it being deemed that any such
obligations are fulfilled by the terms of this Agreement.
10. FAC may continue to use his current Ferro provided leased
automobile until February 4, 1997. Ferro will insure and will reimburse FAC
for maintenance and operating expenses for the vehicle in accordance with past
practice through February 4, 1997 (except that if FAC accepts other employment
which includes the use of an employer provided automobile, the obligation of
this sentence shall cease at that time). Upon expiration of the lease, but no
later than February 4, 1997, Ferro will transfer title to the automobile to FAC
without additional consideration.
11. Ferro will continue to cause to be made available to FAC,
at Ferro's expense, the services of KPMG Peat Marwick with respect to tax
advice and tax return preparation through February 4, 1997, as well as the
preparation of FAC's 1996 and 1997 tax returns, whenever completed.
12. FAC hereby reaffirms his obligations and commitments
pursuant to that Employment Agreement between Ferro and FAC (the "Secrecy
Agreement") that he signed at
5
the time of commencement of his employment with Ferro. FAC agrees that he will
not, at any time prior to February 4, 1997, without Ferro's prior written
consent, accept any other employment or engage, as a proprietor, consultant,
partner, or otherwise in any outside business or enterprise, which, with
respect to such employment or engagement, is engaged in activities competitive
with the chemicals or the polymers business of Ferro as carried on during FAC's
tenure as Senior Vice President, Chemicals and Polymers of Ferro. Except as
aforesaid, no other restriction or noncompetition obligations shall be imposed
upon FAC and FAC shall be free to obtain employment or participate as a
principal, shareholder, or partner in any other business enterprise.
13. FAC hereby releases and discharges Ferro, its successors,
subsidiaries, employees, officers, directors and representatives from all
claims, liabilities, demands and causes of action, known or unknown, fixed or
contingent, which he may have to claim to have against them, or any of them,
(other than his rights under or described in this Agreement). This includes,
but is not limited to, claims arising under Federal, state or local laws
prohibiting age, sex, race or other forms of discrimination or claims arising
out of any legal or equitable restrictions on Ferro's right to terminate the
employment of its employees. It also includes a release of all rights under
his Executive Employment Agreement with Ferro dated October 1, 1991, but only
to the extent not otherwise incorporated by reference under Section 16 of this
Agreement.
This release also includes waiver of any right FAC may have
or claim to have to recovery in any lawsuit brought on his behalf by any state
or Federal agency with respect to his employment termination.
6
14. FAC agrees to furnish to Ferro promptly such documentation
as Ferro may reasonably request for the release to Ferro of any funds held in
escrow to secure Ferro's obligations to FAC under his Executive Employment
Agreement with Ferro.
15. In the event of the death of FAC prior to February 4, 1997,
the payments described in Section 2 hereof shall continue to be paid to his
surviving spouse and, in the event of her death prior to February 4, 1997, to
FAC's estate, until completion of payment of the amounts provided for in such
Section 2.
16. This Agreement hereby expressly incorporates by reference
the provisions of Sections IV(H) (pertaining to mitigation and offset), VII
(pertaining to arbitration), and VIII(A) (pertaining to successors and assigns,
but as if it referred to the compensation and benefits payable under this
agreement, rather than those payable under the Executive Employment Agreement),
of the Executive Employment Agreement, as if such provisions were fully
rewritten herein and applicable as between FAC and Ferro.
17. For Federal, state, and local income tax reporting and
withholding purposes, the payments in Sections 2 and 6 herein shall be deemed
taxable and therefore reported as such in the years which the payments are
made. For purposes of employment tax under Internal Revenue Code Section
3121(v)(2)(A), the payments under Section 6, to the extent subject to tax under
Section 3121, shall be deemed taxable, in full, in 1997.
18. Except as specifically provided otherwise in this
Agreement, the terms of this Agreement shall supersede any different or
conflicting provisions of any other agreement between FAC and Ferro, and of any
plans or policies of Ferro applicable to FAC.
7
This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, but all of which shall collectively constitute one and the same
instrument.
Date: 10/18/93 /s/Frank A. Carragher
------------------- -----------------------------------------------------
Frank A. Carragher
Date: 10/18/93 FERRO CORPORATION
--------------------
By: /s/A. C. Bersticker
------------------------------------------------------
A. C. Bersticker
President and Chief Executive
Officer
8
APPENDIX 1 Page 1 of 2
FERRO CORPORATION
BENEFIT CALCULATION FOR
FRANK A. CARRAGHER
(Service to Normal Retirement Date)
A. 50% of Regular Compensation
Benefit (service to 12/31/93) $5,853.51
B. Additional Excess Benefit
(service to NRD) + 1,216.75
--------
C. 50% of Regular Compensation
Benefit (with service to NRD) $7,070.26
D. Short Service Plan Benefit + 2,200.19 *
--------
E. Total Benefit (Sum of C and D) $9,270.45
F. Value of (B) $157,738 **
G. Value of (D) $256,722 **
*Payable beginning at age 65 and continuing for as long as the
participant lives, but no less than 120 months
**These amounts were calculated as of January 1, 1994, using
UP1984 mortality with no setback, 4.25% immediate and 4.00%
deferred interest rate assumptions
9
Page 2 of 2
FERRO CORPORATION RETIREMENT PLAN
BENEFIT CALCULATION FOR
FRANK A. CARRAGHER
BASIC DATA:
SOCIAL SECURITY NUMBER ###-##-####
EMPLOYEE NUMBER 2184
LOCATION NUMBER 95
DATE OF BIRTH 02/04/32
LAST HIRE DATE 03/12/79
CREDITED SERVICE FROM 03/12/79
DATE OF TERMINATION 02/04/97
BENEFIT COMMENCEMENT DATE 03/01/97
NORMAL RETIREMENT DATE 02/04/97
CREDITED BENEFIT SERVICE AT DOT 17.91667
REGULAR COMPENSATION (INCLUDING 1989 224,735.00
EST. INCENTIVE COMPENSATION) 1990 241,881.00
1991 295,175.84
1992 398,157.92
(PROJ) 1993 330,400.00
BENEFIT CALCULATION:
A. AVERAGE MONTHLY COMPENSATION = $24,839.16
B. 50% OF AVERAGE COMPENSATION = $12,419.58
C. 50% OF SOCIAL SECURITY PIA BENEFIT OF $1,162
BASED ON ACTUAL SALARY HISTORY = $581.00
----------
D. GROSS BENEFIT (B MINUS C) = $11,838.58
E. SERVICE FRACTION: SERVICE (MAX 30) / 30 = 0.597222
F. 50% OF REGULAR COMPENSATION BENEFIT (D TIMES E) = $7,070.26
G. 42% OF AVERAGE COMPENSATION = $10,432.45
H. LESS SOCIAL SECURITY PIA BENEFIT = 1,162.00
----------
I. TOTAL OF QUALIFIED, EXCESS, & SHORT
SERVICE PLAN BENEFITS (G MINUS H) = $9,270.45
ESTIMATES - 1997 SOCIAL SECURITY BENEFIT IS UNAVAILABLE
BASIC PERFORMANCE CORPORATE
COMPENSATION SHARES INCENTIVE
89 152,004 29,363 43,368
90 164,004 65,331 12,546
91 190,000 85,777 19,399
92 215,000 136,138 47,020
93 236,000 0 94,400
__________________________________________
WILLIAM M. MERCER, INC.
10/18/93