EXHIBIT 10.11.1
FERRO CORPORATION DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE DIRECTORS
TRUST AGREEMENT
Effective January 1, 1995

 

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FERRO CORPORATION DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE DIRECTORS
TRUST AGREEMENT
TABLE OF CONTENTS

     
ARTICLE I:
  PRELIMINARY RECITALS
 
   
ARTICLE II:
  DEFINITIONS
 
   
ARTICLE III:
  RIGHTS AND DUTIES OF CORPORATION AND RIGHTS OF ITS GENERAL CREDITORS
 
   
ARTICLE IV:
  CONTRIBUTIONS AND SEPARATE ACCOUNTS
 
   
ARTICLE V:
  THE TRUST ESTATE
 
   
ARTICLE VI:
  DISTRIBUTIONS TO PARTICIPANTS
 
   
ARTICLE VII:
  POWERS AND DUTIES OF THE TRUSTEE
 
   
ARTICLE VIII:
  ADMINISTRATION
 
   
ARTICLE IX:
  RESIGNATION AND REMOVAL OF TRUSTEE
 
   
ARTICLE X:
  MISCELLANEOUS

 

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FERRO CORPORATION DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE DIRECTORS
TRUST AGREEMENT
     This Trust Agreement (hereinafter referred to as the “AGREEMENT”) is
entered into at Cleveland, Ohio effective as of the 1st day of January, 1995,
between FERRO CORPORATION, an Ohio corporation (hereinafter referred to as the
“CORPORATION”), and D. THOMAS GEORGE (hereinafter referred to as the “TRUSTEE”).
ARTICLE I
PRELIMINARY RECITALS
     1.1 ESTABLISHMENT OF PLAN. The Corporation on December 9, 1994, but
effective as of January 1, 1995, established the Ferro Corporation Deferred
Compensation Plan for Non-Employee Directors (the “PLAN”). The Plan was
established in order to permit non-employee directors to defer a portion or all
of their directors’ fees with the investment of such deferred fees into shares
of common stock of the Corporation pursuant to the Trustee’s investment in the
Ferro Corporation Dividend Reinvestment and Stock Purchase Plan.
     1.2 ESTABLISHMENT OF TRUST. In order to provide a source of payment for its
obligations under the Plan, the Corporation has entered into this Agreement to
create a trust (hereinafter referred to as the “TRUST”) and has delivered
certain property to the Trustee, the receipt of which is hereby acknowledged by
the Trustee. The Trustee agrees to hold such property and all other property
which may, at the discretion of the Corporation, be contributed and made subject
to the provisions of the Agreement as well as the proceeds, investments, and
reinvestments thereof, in trust for the uses and purposes and subject to the
provisions hereinafter set forth.

 

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     1.3 GRANTOR TRUST. The Trust is intended to be a grantor trust, of which
Corporation is the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
     1.4 CORPORATION DEDUCTION. It is intended that distributions from the Trust
to a Participant shall be deductible by Corporation to the same extent, at the
same time, and in the same manner as if made directly by the Corporation.
ARTICLE II
DEFINITIONS
     2.1 DEFINITIONS. For the purposes hereof, the following words and phrases
shall have the meanings indicated. Unless the context of the Agreement otherwise
requires or unless otherwise defined herein, the terms defined in the Plan shall
have the same meaning when used herein as the meaning given to those terms in
the Plan.
          (a) The term “CHANGE IN CONTROL” shall mean a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act; provided
that, without limitation, such a Change in Control shall be deemed to have
occurred if and at such times as (i) any “person” (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes the beneficial
owner, directly or indirectly, of securities of the Corporation representing
twenty-five percent (25%) or more of the combined voting power of the
Corporation’s then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Corporation cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Corporation’s shareholders, of each new director was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
          (b) The term “CODE” shall mean the Internal Revenue Code of 1986, as
amended from time to time.
          (c) The terms “CORPORATION STOCK” or “STOCK” shall mean a share or
shares of the common stock, par value $1.00 per share, of the Corporation.
          (d) The term “DRSPP” shall mean the Ferro Corporation Dividend
Reinvestment and Stock Purchase Plan, currently administered by National City
Bank, Cleveland, Ohio.

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          (e) The term “EXCHANGE ACT” shall mean the Securities Exchange Act of
1934, as amended.
          (f) The term “FUND” shall mean any common trust fund established in
accordance with the provisions of Section 4.4.
          (g) The term “INSOLVENCY” shall mean the condition of the Corporation
in the event that it either is unable to pay its debts as they become due or is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.
          (h) The term “PARTICIPANT” shall mean a non-employee director of the
Corporation, or any beneficiary of such a non-employee director, who defers Fees
pursuant to the Plan.
          (i) The term “REQUIRED FUNDING AMOUNT” shall mean the amount
determined pursuant to the provisions of Article IV to fund the obligations of
the Corporation under the Plan.
          (j) The term “SEPARATE ACCOUNT” shall mean the account established and
maintained by the Trustee on behalf of each Participant in accordance with the
provisions of Article IV.
          (k) The term “STOCK FUND” shall mean the Fund established in
accordance with the provisions of Section 4.4 to invest in Corporation Stock
pursuant to the DRSPP.
          (l) The term “TRUST ASSETS” shall mean all property held by the
Trustee pursuant to the terms of this Agreement.
          (m) The term “VALUATION DATE” shall mean the last business day of each
calendar year or such other dates as determined by the Trustee.
     2.2 CONSTRUCTION. Where necessary or appropriate to the meaning hereof, the
singular shall be deemed to include the plural, the masculine to include the
feminine, and the feminine to include the masculine.
ARTICLE III
RIGHTS AND DUTIES OF CORPORATION
AND RIGHTS OF ITS GENERAL CREDITORS
     3.1 TRUST IRREVOCABLE. The Trust is irrevocable and the Corporation hereby
waives the power to alter, amend, revoke, or annul the Trust or the Agreement,
except that the Corporation

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reserves the right to make amendments which do not result in any reversion or
refund to the Corporation of any Trust Assets other than as provided in Articles
IV and VI hereof.
     3.2 RIGHTS OF GENERAL CREDITORS OF CORPORATION; NOTIFICATION OF INSOLVENCY.
Notwithstanding any provision of the Agreement or the Plan to the contrary, the
Trust Assets shall be subject at all times to the claims of general creditors of
the Corporation under federal and state law, so long as they are in the
possession of the Trustee. No general creditor of the Corporation shall have any
right to recover, or any title or interest in, any Trust Asset after it has been
distributed by the Trustee to a Participant, even if prior to such payment the
Trustee had knowledge or notice that such general creditor has made or intends
to make claim to such Trust Asset.
          (a) The Chairman of the Board of Directors and the Chief Executive
Officer of the Corporation (or their representatives) shall have the duty to
inform the Trustee in writing of the Corporation’s Insolvency. If a person
claiming to be a creditor of the Corporation alleges in writing to Trustee that
the Corporation has become Insolvent, the Trustee shall determine whether the
Corporation is Insolvent and, pending such determination, the Trustee shall
discontinue payments to Participants.
          (b) Unless the Trustee has actual knowledge of the Corporation’s
Insolvency, or has received notice from the Corporation or a person claiming to
be a creditor alleging that the Corporation is Insolvent, the Trustee shall have
no duty to inquire whether the Corporation is Insolvent. The Trustee may in all
events rely on such evidence concerning the Corporation’s solvency as may be
furnished to the Trustee and that provides Trustee with a reasonable basis for
making a determination concerning the Corporation’s solvency.
          (c) If at any time the Trustee has determined that the Corporation is
Insolvent, the Trustee shall discontinue payments to Participants and shall hold
the assets of the Trust for the benefit of the Corporation’s general creditors.
Nothing in this Trust Agreement shall in any way diminish any rights of
Participants to pursue their rights as general creditors of the Corporation with
respect to benefits due under the Plan or otherwise.
          (d) The Trustee shall resume the payment of benefits to Participants
only after the Trustee has determined that the Corporation is not Insolvent (or
is no longer Insolvent).
     3.3 RESUMPTION OF PAYMENTS. Provided that there are sufficient assets, if
the Trustee discontinues payments to Participants from the Trust pursuant to
Section 3.2 hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate

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amount of all payments due to Participants under the terms of the Plan for the
period of such discontinuance less the aggregate amount of any payments made to
Participants by the Corporation in lieu of the payments provided for hereunder
during any such period of discontinuance.
ARTICLE IV
CONTRIBUTIONS AND SEPARATE ACCOUNTS
     4.1 CONTRIBUTIONS. Except as hereinafter provided, the Corporation shall
make contributions to the Trust from time to time as it shall determine in its
sole discretion and in accordance with the terms of the Plan; provided, however,
that the Corporation shall be required to contribute the Required Funding Amount
within the five-day period following a Change in Control. If the Corporation
fails to contribute the Required Funding Amount upon the occurrence of such
event, the Trustee is empowered to bring suit against the Corporation to require
specific performance of such obligation to contribute. If the Trustee fails to
bring suit within a reasonable period, any Participant may bring suit in the
name of the Trustee against the Corporation for such specific performance. As of
each Valuation Date after a Change in Control with respect to which the
Corporation contributes the Required Funding Amount and prior to the return of
any assets to the Corporation, the Trustee shall determine if the Trust Assets
are less than or exceed the Required Funding Amount as of such date. If the
Trust Assets are less than the Required Funding Amount, the Corporation shall
contribute to the Trust the amount by which the Required Funding Amount exceeds
the value of the Trust Assets. If the value of the Trust Assets exceeds the
Required Funding Amount, the Trustee shall distribute to the Corporation the
amount by which the value of the Trust Assets exceeds the Required Funding
Amount.
     4.2 TAXABLE CONTRIBUTIONS. It is the Corporation’s understanding and
expectation that the Corporation’s contributions to the Trust, and any earnings
thereon, shall not be taxable under the Code to Participants until such time as
they are distributed or otherwise made available to Participants; and,
therefore, the Corporation’s contributions are conditional on such tax result.
In the event that a Corporation contribution and/or earnings thereon held in the
Trust becomes taxable to a Participant,

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the Trustee shall distribute to the Participant the amount of any federal income
taxes of such Participant with respect to such Corporation contribution and/or
earnings thereon calculated at the highest federal income tax marginal rates for
the year of taxation on the amount includible in the Participant’s gross income.
In the event that it is determined, or the Trustee reasonably believes (based on
the opinion of independent counsel) that it will be determined that a
Corporation contribution will be taxable to Participants prior to a Change in
Control, then the Trustee shall refund to the Corporation or refuse to accept,
the portion of such contribution and/or earnings which is determined will be so
taxable, subject to the following:
          (a) The Trustee shall be under no obligation to make such refund
unless a written explanation of the basis for the refund, signed by a duly
authorized officer of the Corporation, together with evidence reasonably
satisfactory to the Trustee to support such refund, is submitted to the Trustee.
          (b) The refundable amount or the amount distributed, as defined in
paragraph (c) of this Section 4.2, shall be segregated from the Trust and
charged proportionately to each affected Participant’s Separate Account (to the
extent previously credited to such Separate Account) as of the last Valuation
Date immediately preceding the date of refund.
          (c) The refundable or distributable amount is the portion of the
contribution and/or earnings determined to be so taxable, in each case, from the
date the contribution was received by the Trustee to the date of segregation.
          (d) No Change in Control has occurred as of the date of the refund.
Distributions under this Section 4.2 shall be credited against any Plan benefits
payable to Participants but shall not reduce the Required Funding Amount.
     4.3 SEPARATE ACCOUNTS. The Trustee shall establish and maintain a Separate
Account in the name of each Participant, pursuant to any directions received
from the Corporation which are not inconsistent with the provisions of the Plan.
The Trustee shall allocate contributions received from the Corporation among
such Separate Accounts in proportion to the Fees deferred by Participants or
pursuant to directions of the Corporation that are not inconsistent with the
terms of the Plan; provided, however, that if the Corporation makes
contributions to the Plan due to a Change in Control, such allocations shall be
based upon the calculations of the Trustee made with respect to the

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Plan for purposes of determining the Required Funding Amount under Section 4.5.
With respect to each Separate Account, the Trustee shall (i) elect the dividend
reinvestment option under the DRSPP, and (ii) invest the Corporation’s
contributions (that are attributable to the Participant’s deferred Fees) under
the DRSPP’s stock purchase option. For purposes of the Trustee’s participation
in the DRSPP, the Corporation and the Trustee recognize that the Trustee, as
Trustee of the Trust, shall be the shareholder of record and that the Trustee
shall establish subaccounts on the books and records of the DRSPP maintained by
National City Bank, Cleveland, Ohio that shall correspond to and be a part of
each Separate Account.
     4.4 FUNDS. Subject to the provisions of Article V, the Trustee shall
establish and maintain a Stock Fund and such other Funds with respect to the
investment of Trust Assets as the Corporation may direct and shall deposit the
Trust Assets in said Funds in accordance with the terms of the Plan and
directions received from the Corporation. Trust Assets in the Stock Fund shall
be invested by the Trustee in Corporation Stock pursuant to the DRSPP and
allocated to the Separate Accounts of Participants in accordance with the
provisions of Section 4.3 hereof.
     4.5 DETERMINATION OF REQUIRED FUNDING AMOUNT. As of any Change in Control,
or applicable Valuation Date, the Required Funding Amount shall be the sum of
the amounts determined to be contributable by the Corporation to the Trust
pursuant to the provisions of the Plan as well as an amount deemed to be
appropriate by the Trustee, after consultation with the Corporation, to pay for
the expenses of the Trustee in connection with the administration of the Trust.
ARTICLE V
THE TRUST ESTATE
     5.1 MANAGEMENT OF TRUST ASSETS PRIOR TO A CHANGE IN CONTROL. Except as
hereinafter provided, prior to a Change in Control for which the Required
Funding Amount is contributed to the Trust by the Corporation, the Trustee shall
have exclusive responsibility for the management and control of the Trust Assets
and the Funds. In connection with that responsibility:

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          (a) The Trustee shall invest and reinvest the principal and income of
the Trust Assets in accordance with the provisions of this Section 5.1. The
Trustee shall invest and reinvest the principal and income of the Stock Fund in
Corporation Stock as provided in Sections 4.3 and 4.4 hereof; provided, however,
that the Trustee may invest on a temporary basis, pending investment in
Corporation Stock, assets of the Stock Fund in short-term Funds. Except as
otherwise provided in the Plan or in this Agreement, the Trustee shall have full
and exclusive discretion and authority to invest in such stocks (common or
preferred), bonds (including municipal bonds, notes and other obligations),
notes and other obligations of corporations, real estate mortgages, equipment
trust certificates, investment trust certificates, mutual funds, annuities or
other insurance company contracts and any other kind of property real or
personal, which the Trustee believes to be sound, suitable, and prudent
investments for the Trust, without being limited to any class or type of
investments prescribed by statute or otherwise as legal investments for
trustees, including securities issued by the Corporation.
          (b) The Trustee (i) may acquire and hold an interest in securities or
other property hereunder even though, in its corporate or any other capacity, it
has or may subsequently hold an interest in the same or related securities or
property, the income or principal of which may be payable at different rates or
at different times or which may have a different rank or priority, (ii) may
acquire and hold securities or other property, even though the Trustee, in its
capacity, may receive compensation reasonably and customarily due in the course
of its regular activities with respect to such securities or other property, and
(iii) may purchase securities or other property, even though the proceeds of
such purchase may directly or indirectly be used by the seller to pay off loans
made by the Trustee in its corporate capacity.
          (c) Annually, or more often if requested, the Trustee shall confer
with the Corporation with respect to the status of the Trust and the general
investment policy to be followed with respect to Trust Assets. Nothing contained
herein, however, shall be construed as requiring the Trustee to obtain any
approval with respect to the purchase or sale of specific Trust Assets.
     5.2 MANAGEMENT OF TRUST ASSETS AFTER A CHANGE IN CONTROL. Upon the
occurrence of a Change in Control, the Trustee shall hold, invest, and reinvest
the Trust Assets as well as income thereon in such bonds, notes, debentures,
mortgages, equipment trust certificates, investment trust certificates,
certificates of indebtedness, bills of exchange, Treasury bills, savings bank
deposits, commercial paper, and other securities from which the return is fixed
for a period of time not in excess of twelve months and in Corporation Stock to
the extent necessary to satisfy any requirements of the Plan. Any income from
such investments shall be held and reinvested by the Trustee pursuant to the
provisions of this Section 5.2.

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     5.3 CORPORATION STOCK. Notwithstanding any other provision contained
herein, with respect to the Stock Fund that is invested in Corporation Stock
pursuant to the DRSPP which is allocated to Separate Accounts of Participants,
prior to each annual or special shareholders’ meeting, the Corporation shall
cause to be sent to each Participant whose Separate Accounts are so credited, a
copy of the proxy solicitation material therefor, together with a form
requesting that each Participant give to the Trustee his confidential
instructions with respect to the manner in which such shares of Corporation
Stock as are credited to his Separate Account shall be voted by the Trustee.
Upon receipt of such instructions, the Trustee shall vote the shares of Stock as
instructed. Instructions received from Participants by the Trustee shall be held
in the strictest confidence, shall not be divulged or released to any other
person, including officers or employees of the Corporation. The Trustee shall
not vote Corporation Stock with respect to which the Trustee does not receive
such instructions. As of each Valuation Date and each date of record for any
annual or special shareholders’ meeting, the Trustee shall report to the
Corporation any Corporation Stock holdings allocated to the Separate Account of
each Participant.
ARTICLE VI
DISTRIBUTIONS TO PARTICIPANTS
     6.1 DISTRIBUTIONS FROM TRUST. The Trustee shall make distributions to a
Participant from the Trust in such manner and at such times as the Corporation
is required to pay to such Participant under the Plan. The Corporation shall
give the Trustee such written information as is needed in connection with such
distributions, including the name and address of the Participant to whom the
distribution is to be made, the amount and form of distribution and such other
relevant information as the Trustee may from time to time require.
     6.2 MANNER OF PAYMENT. The Trustee may make any distribution or payment
required to be made by it hereunder by delivering shares of Corporation Stock to
or for the benefit of the Participant or other person to whom such distribution
or payment is to be made pursuant to the provisions of the Plan, at such address
as was last furnished to the Trustee.

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     6.3 RELEASE OF CORPORATION UPON PAYMENT. To the extent that the Trustee
pays benefits due a Participant or other person under the Plan, the Corporation
shall be forever released and discharged from the obligation to pay such
benefits. To the extent that the Trustee fails to pay such benefits, in whole or
in part, the Corporation shall pay any remaining amount due the Participant
under such Plan to the extent the Corporation is liable therefor under the terms
of the Plan.
     6.4 TERMINATION OF THE PLAN. In the event the Plan is terminated in whole
or in part, the Trust Assets, or a portion thereof, shall be held to pay
benefits of Participants under the Plan as of the date of such termination.
     6.5 REFUND TO CORPORATION AFTER ALL OBLIGATIONS FULFILLED. Notwithstanding
any other provisions of the Agreement, when all obligations of the Trustee to
make distributions to Participants have been fulfilled and all shares of Stock
allocated to the Separate Accounts have been distributed to Participants or
other persons entitled to such under the terms of the Plan, any remaining Trust
Assets shall be refunded to the Corporation.
ARTICLE VII
POWERS AND DUTIES OF THE TRUSTEE
     7.1 AUTHORITY OF THE TRUSTEE. Except as otherwise provided herein or in the
Plan, the Trustee has the following authority, in addition to powers otherwise
conferred on it by law or by the Trust:
          (a) To hold, manage, sell, exchange, mortgage, pledge, or otherwise
dispose of, any property in the Trust, without the approval of any court;
          (b) To hold securities (including Corporation Stock) and other
property of the Trust in the name of the Trustee or in the name of its nominee
or a depositary, either in the form of a certificate or other written instrument
or in the form of a book entry, with or without disclosure of the Trust,
provided that the Trustee shall be responsible for the acts of its nominee;
          (c) To collect the principal and income of property in the Trust and,
if there is a default in the payment of such principal or income, to exercise
its judgment as to the proper legal proceedings necessary or advisable to
collect it;

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          (d) To participate in reorganizations, recapitalizations,
consolidations, mergers, exchanges, liquidations and creditors’ and bondholders’
agreements;
          (e) To exercise voting rights and issue proxies, which may be
discretionary and with power of substitution, in connection with any stock,
other than Corporation Stock governed by Section 5.3, or other securities in the
Trust;
          (f) To exercise rights and options to purchase shares of stock
(including Corporation Stock) or other property, and to sell or redeem
fractional shares of stock (including Corporation Stock) or other property;
          (g) With the written approval of the Corporation, to borrow money in
such amounts and upon such terms and conditions and from such persons as the
Trustee deems advisable to carry out the purposes of the Trust, and to pledge
any property in the Trust for the repayment of such loan;
          (h) With the written approval of the Corporation, to lease for any
term (with or without option to purchase) or otherwise dispose of, any property
in the Trust, without the approval of any court;
          (i) To employ brokers, agents, custodians, actuaries, attorneys,
accountants or other persons (who may or may not also be employed by the
Corporation), and to delegate to them such of the Trustee’s powers (other than
those relating to the investment and reinvestment of the Trust Assets) as it
considers desirable;
          (j) To execute and deliver deeds, leases, mortgages, conveyances,
contracts, waivers, releases or other instruments in writing necessary or proper
for the accomplishment of any of the foregoing powers; and
          (k) To purchase Corporation Stock from the Corporation or on the open
market or pursuant to the DRSPP to satisfy any requirements of the Plan and this
Agreement.
     7.2 ADVICE OF COUNSEL. The Trustee may consult with any legal counsel,
including counsel to the Corporation, with respect to the construction of the
Agreement, its duties hereunder, or any act which it proposes to take or omit.
     7.3 PERSONS DEALING WITH THE TRUSTEE. Persons dealing with the Trustee have
no obligation to see to the proper application of any money paid or property
delivered to the Trustee or to inquire into the Trustee’s authority as to any
transaction.

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     7.4 TRUSTEE’S DUTIES. The Trustee’s duties and obligations shall be limited
to those expressly imposed upon it in accordance with the terms of the Trust.
The Trustee shall act in a fiduciary capacity with respect to the Participants.
     7.5 TRUSTEE RESPONSIBILITY IF CORPORATION IS INSOLVENT. At such time as
(i) the Corporation issues or should have issued a notice pursuant to the
provisions of Section 3.2; (ii) the Trustee has actual knowledge of the
Insolvency of the Corporation; or (iii) a general creditor of the Corporation
makes claims or brings legal action against the Trustee pursuant to the rights
set forth in Section 3.2, the Trustee shall discontinue all distributions to
Participants and shall hold and deliver all Trust Assets in the manner that a
court of competent jurisdiction directs. If the Trustee discontinues any
distributions from the Trust to the Participants pursuant to this Section 7.5,
any subsequent resumption of such distributions shall be in accordance with
Section 3.3.
     7.6 VALUATION OF TRUST. The Trustee shall determine the fair market value
of the Trust Assets as of each Valuation Date. The Trustee shall furnish to the
Corporation as soon as practicable after the close of each calendar year (and
following any other Valuation Date, if the Corporation so requests), a report
(a) listing the Trust Assets as of the close of business on such Valuation Date;
(b) showing as of the close of business on such Valuation Date the value of the
Trust Assets; (c) showing since the last previous report (i) all of the
Corporation’s contributions to the Trust, (ii) all allocations to each Separate
Account, and (iii) all amounts paid from the Trust pursuant to Article VI, and
(d) containing such additional information concerning the Trust as the
Corporation may reasonably request. In determining fair market values, the
Trustee shall use such market quotations and other information as are available
to it and as it may determine, in its discretion, to be appropriate. The Trustee
shall not be accountable to the Corporation, to any Participant, or to any other
person on the basis of any such valuation, but its accountability shall be in
accordance with the provisions of Article VIII hereof. If requested by the
Corporation, the Trustee shall provide the information required above for each
Separate Account, subaccount maintained for purposes of the Trustee’s investment
through the DRSPP, or Fund of the Trust.

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     7.7 AUDIT OF ACCOUNT OF TRUSTEE. The Trustee shall keep full accounts of
all transactions. All financial statements, books and records with respect to
the Trust shall be open to inspection at all reasonable times during business
hours of the Trustee by the Corporation, or its representatives, including,
without limitation, any accountants engaged by the Corporation in the Trust in
such form as the Corporation may reasonably request.
     7.8 REPORT OF ACCOUNT TO CORPORATION. Within sixty (60) days after the
close of each calendar year, and within sixty (60) days after the date of
termination of the duties of the Trustee, the Trustee shall prepare and deliver
to the Corporation an account of its acts and transactions as Trustee hereunder.
     7.9 TAX RETURNS OF TRUST. The Trustee, in coordination with the
Corporation, shall file, or cause to be filed, the appropriate tax form or forms
reporting all items of income, deduction, loss, or credit for the account of the
Corporation, and all tax returns required in connection with distributions from
the Trust.
     7.10 TRUSTEE RESPONSIBILITY RELATING TO CORPORATION DEDUCTION. The Trustee
shall, upon request of the Corporation, take all actions (and refrain from such
actions) necessary to ensure that the intent of Section 1.4 is achieved.
ARTICLE VIII
ADMINISTRATION
     8.1 EVIDENCE OF ACTION BY CORPORATION. The Corporation shall designate to
the Trustee the names of any persons authorized to act for the Corporation under
the Agreement. Until further notice, the Corporation hereby designates that the
Treasurer of the Corporation is authorized to act for the Corporation under the
Agreement. Until the Corporation notifies the Trustee that such a person is no
longer so authorized, the Trustee may continue to rely on the authority of such
person. The Trustee may rely upon any such designation which the Trustee
reasonably believes to have been signed by a duly authorized officer of the
Corporation.

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     8.2 NOTICE OF CHANGE IN CONTROL. Within five days after having knowledge of
any Change in Control, the Corporation shall notify the Trustee and the
Participants of the occurrence of such Change in Control.
     8.3 COMMUNICATIONS TO TRUSTEE OR CORPORATION. Communications to the Trustee
shall be sent to the Trustee as follows: D. Thomas George, 1000 Lakeside Avenue,
Cleveland, Ohio 44114, or to such other address as the Trustee may specify. No
communication shall be binding upon the Trustee until it is received by the
Trustee, but any communication by the Corporation to the Trustee shall be
binding upon the Corporation upon sending to the Trustee. Communications to the
Corporation shall be sent to the Corporation’s principal office at 1000 Lakeside
Avenue, Cleveland, Ohio 44114, Attention: Treasurer and Director, Human
Resources or to such other address or person(s) as the Corporation may specify.
     8.4 EXPENSES. The Trustee shall be entitled to reimbursement for its
reasonable expenses of administering the Trust, including reasonable
compensation of counsel and any agents engaged by the Trustee to assist it in
such administration. Except as provided in Section 4.5, such compensation and
expenses, including those fees and expenses incurred under Section 10.5, shall
be paid by the Corporation and in the event that the Corporation refuses to pay,
the Trustee shall be entitled to compensation from the Trust Assets.
     8.5 EMPLOYMENT OF TRUSTEE AS AGENT. The Corporation may at any time employ
agents to perform any act, keep any records or accounts, or make any
computations required of the Corporation by the Agreement or the Plan. In the
event the Trustee is so employed as an agent, nothing which the Trustee may do
as such agent shall affect its power, responsibility or liability as Trustee.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
     9.1 RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may resign at any time
by filing a written resignation with the Corporation. The Corporation may remove
the Trustee at any time by

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delivering a written notice of removal to the Trustee; provided, however, that
in the event of a Change in Control, the Trustee may be removed by the
Corporation only if seventy-five percent (75%) of the number of Participants
consent to such removal. Such resignation or removal shall take effect upon
appointment of a successor Trustee as provided in Section 9.2.
     9.2 APPOINTMENT OF SUCCESSOR TRUSTEE. The appointment of a successor to the
Trustee will take effect upon delivery to the Trustee of an instrument in
writing executed by the Corporation appointing such successor and an acceptance
in writing executed by such successor or such other date specified in the
instrument appointing the successor; provided, however, that in the event of a
Change in Control, seventy-five percent (75%) of the number of Participants must
consent to the appointment of a successor Trustee. If a successor is not
appointed within ninety (90) days after the Trustee gives notice of resignation
or the Corporation gives notice of removal pursuant to Section 9.1, the Trustee
may apply to any court of competent jurisdiction for appointment of a successor.
     9.3 TRANSFER OF TRUST ASSETS TO SUCCESSOR. Upon the resignation or removal
of the Trustee and appointment of a successor, and after the final account of
the Trustee has been delivered to the Corporation, the Trustee shall transfer
and deliver the Trust Assets to such successor.
     9.4 AUTHORITY AND POWER OF SUCCESSOR TRUSTEE. All of the provisions set
forth herein with respect to the Trustee shall relate to each successor with the
same force and effect as if such successor had been originally named as Trustee
hereunder.
ARTICLE X
MISCELLANEOUS
     10.1 GOVERNING LAWS. The Trust and the Agreement shall be construed and
regulated by the laws of the State of Ohio.
     10.2 PROHIBITION AGAINST REVERSION OR DIVERSION. No part of the Trust shall
revert to the Corporation except as provided in Articles IV and VI hereof, and
no part of the Trust shall be used

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for or diverted to purposes other than the exclusive benefit of Participants,
except as provided as Sections 3.2, 4.1, 4.2, 6.5, and 8.4.
     10.3 NON-ALIENATION OF BENEFITS. No benefit under a Plan shall at any time
be subject in any manner to alienation or encumbrance. If any Participant shall
attempt to, or shall, alienate or in any way encumber his benefits under the
Plan, or any part thereof, or if by reason of his bankruptcy or other event
happening at any time any such benefits would otherwise be received by anyone
else or would not be enjoyed by him, his interest in all such benefits shall
automatically terminate and the same shall be held or applied to or for the
benefit of such person, his spouse, children, or other dependents in accordance
with the terms of the Plan.
     10.4 PAYMENT OF BENEFITS TO OTHERS. If any Participant to whom a benefit is
payable under the Plan is unable to care for his affairs because of illness or
accident, any payment due (unless prior claims therefor shall have been made by
a duly qualified guardian or other legal representative) may be paid to the
spouse, parent, adult child, brother, or sister, or any other individual in
accordance with the terms of the Plan.
     10.5 ARBITRATION. Any dispute between the Participants and the Corporation
or the Trustee as to the interpretation or application of the provisions of the
Agreement, the Plan, or amounts payable under the Plan shall be determined
exclusively by binding arbitration in Cleveland, Ohio, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court of competent jurisdiction. All
fees and expenses of such arbitration shall be paid by the Corporation and in
the event that the Corporation refuses to so pay, the Trustee shall pay such
fees and expenses as an expense of the Trust.
     10.6 TRUST BENEFITS LIMITED TO PLAN BENEFITS. Nothing herein contained
shall be construed as conferring upon any person any rights with respect to the
Trust or the administration thereof other than the right to such benefits as may
be provided with respect to such person by the terms of a Plan. All rights
created under the Plans and this Agreement shall be mere unsecured contractual
rights of the Participant against Corporation.

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     10.7 TITLES AND HEADINGS NOT TO CONTROL. The titles of Articles and
headings of Sections in the Agreement are placed herein for convenience of
reference only and in case of any conflict, the text of the Agreement, rather
than such titles or headings, shall control.
     Executed in multiple counterparts at Cleveland, Ohio, effective as of
January 1, 1995, but on the dates indicated below.
FERRO CORPORATION

             
By:
           
 
           
 
  D. Thomas George, Treasurer       D. Thomas George, Trustee
 
           
Date:
          Date:
 
         
 

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