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                                                                   Exhibit 10.60

                              SEPARATION AGREEMENT

         This Separation Agreement is entered into by and between Philip F.
Schultz ("Employee") and Eagle-Picher Industries, Inc., an Ohio corporation
("Employer"). In exchange for the payments provided herein, the mutual
undertakings, and other good and valuable consideration, the parties agree as
follows:

1.   Employee's employment with Employer shall terminate effective as of the
     later of (a) November 30, 2001, or (b) the earlier of (i) December 31,
     2001, or (ii) the date of closing of the "Securitization Transaction" (as
     defined in Paragraph 3 below) (as the case may be, the "Separation Date").
     Employer shall pay Employee at Employee's current rate of pay according to
     Employer's ordinary payroll practices for all wages due up to and including
     the Separation Date. Employer shall also compensate Employee for fifteen
     (15) unused vacation days as of the Separation Date. Employee's positions
     as an officer or director of Employer or any of its affiliates shall
     terminate effective October 8, 2001.

2.   Employer shall pay or provide to Employee:

a)   SEVERANCE PAY. Employer shall pay to Employee, without setoff or deduction,
     the amount of $290,000 (the "Annual Salary Amount"), which Annual Salary
     Amount shall be paid as follows:

          i)   If the Annual Salary Amount has not previously been paid in full,
               commencing on the day following the Separation Date and
               continuing until the Annual Salary Amount has been paid in full,
               Employer shall pay to Employee each month in accordance with

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               Employer's normal payroll practices an amount equal to
               one-twelfth (1/12) of the Annual Salary Amount;

          ii)  On or before the earlier of (x) March 1, 2002, or (y) the date of
               closing of the Securitization Transaction (as the case may be,
               the "Deferred Payment Date"), Employer shall pay to Employee in a
               lump sum the then unpaid balance of the Annual Salary Amount.

          As a material inducement to Employee to enter into this Agreement,
          Employer agrees and intends that the covenant of Employer to pay the
          Annual Salary Amount at the times and in the manner set forth in this
          Paragraph 2 (a) is an independent covenant, and Employer is and
          intends to be unconditionally obligated to pay the Annual Salary
          Amount without setoff or deduction and regardless of any breach of
          this Agreement by Employee or any other claims or defenses to payment
          Employer may have against Employee.

     b)   SALARY CONTINUATION. Commencing on the day following the Separation
          Date and continuing for a period of fifty-two (52) consecutive weeks,
          Employer shall pay Employee the annual amount of $11,154, such amount
          to be paid in equal installments in accordance with Employer's normal
          payroll practices for the fifty-two (52) weeks following the
          Separation Date (the "Severance Period"). For avoidance of doubt, no
          bonuses will be due to Employee except as provided in Paragraph 3
          below, and Employee shall have no obligations to Employer during the
          Severance Period and shall not be obligated to provide any services to
          Employer in connection with any payments during the Severance Period.

     c)   MEDICAL BENEFITS. At Employer's sole cost (but subject to applicable
          co-pays and deductibles, which shall be the responsibility of
          Employee), Employer will provide



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          Employee and his immediate family with medical benefits under the
          Employer's Group Medical Plan until the earlier of (A) the last day of
          the Severance Period, or (B) if during the Severance Period Employee
          obtains employment with a new employer that offers Medical coverage
          for Employee and his family that does not exclude coverage for any
          pre-existing conditions (but regardless of any co-pay or contribution
          requirements for such medical coverage), the date Employee is eligible
          for such Medical coverage ("New Coverage"). Employee shall give
          Employer notice of New Coverage. While covered by the Employer's Group
          Medical Plan, Employee will also be entitled to participate in
          Employer's Dental Plan and Flex Plan.

     d)   LIFE INSURANCE. Employee shall have basic coverage under Employer's
          Group Life Insurance Plan during the Severance Period.

     e)   COMPANY CAR. Employer shall continue to insure and timely to pay all
          lease payments applicable to, and provide Employee the exclusive use
          of, Employee's leased company vehicle through the Deferred Payment
          Date. Employee intends to purchase such vehicle at the buy-out price
          available to Employer under the lease immediately following the
          Deferred Payment Date, and Employer shall cooperate with Employee to
          cause outright ownership of Employee's leased vehicle to be
          transferred to Employee in exchange for payment by Employee of the
          applicable buy-out price within thirty (30) days of the Deferred
          Payment Date.

     f)   PERSONAL ELECTRONICS. On the Separation Date Employer shall be deemed
          to have transferred to Employee ownership of the Palm V (together with
          related software, chargers and modems) currently used by Employee and
          the cellular phone (including related phone number, cases and
          chargers) used by Employee. Employer and Employee


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          shall cooperate in the transfer of any related third party accounts as
          of the Separation Date.

     g)   OUTPLACEMENT. Employer shall pay for outplacement services and career
          counseling at Drake Beam Morin (or a comparable facility selected by
          Employee), which services shall commence immediately and shall end on
          the last day of the Severance Period.

     h)   RESTRICTED STOCK PURCHASE. Employer shall purchase from Employee for
          cash, and Employee shall sell to Employer or its designee, the 1,250
          shares of Restricted Stock of Eagle-Picher Holdings, Inc. beneficially
          owned by Employee (the "Employee Stock Interest") for an aggregate
          purchase price of $139,575 (the "Down Payment") plus the "Contingent
          Payment" described in Paragraph 3 below. The Down Payment shall be
          paid by Employer to Employee, without setoff or deduction, on or
          before the Deferred Payment Date and the Contingent Payment shall be
          paid, if at all, in accordance with Paragraph 3 below. As a material
          inducement to Employee to enter into this Agreement, Employer agrees
          and intends that the covenant of Employer to pay the Down Payment at
          the times and in the manner set forth in this Paragraph 2 (h) is an
          independent covenant, and Employer is and intends to be
          unconditionally obligated to pay the Down Payment without setoff or
          deduction and regardless of any breach of this Agreement by Employee
          or any other claims or defenses to payment Employer may have against
          Employee.

    Employee acknowledges that this Agreement provides for payments and benefits
    not contemplated under the terms and conditions applicable to his
    employment. All lump sum and periodic payments and other benefits and
    distributions under this Agreement shall be subject to any withholding and
    employment taxes consistent with the character of the


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     payments in accordance with law. Employee shall pay the income tax costs
     for all payments and benefits under this Agreement.

3.   SECURITIZATION AND INCENTIVE. Employer is attempting to obtain financing
     through the securitization of certain of the accounts receivable of
     Employer and its subsidiaries (the "Securitization Transaction"). Employer
     has requested Employee's continued assistance with the Securitization
     Transaction, which assistance Employee is willing to provide. In
     consideration of assistance provided by Employee in connection with the
     Securitization Transaction, Employer agrees that if the closing of the
     Securitization Transaction occurs on or before May 31, 2002, Employer shall
     pay to Employee the additional aggregate amount of $116,000 for the
     Employee Stock Interest (the "Contingent Payment") within ten (10) days
     after the closing of the Securitization Transaction. Employer further
     agrees that if Employer at any time prior to May 31, 2002 ceases to
     diligently and continuously pursue the Securitization Transaction to
     closing, Employer shall pay the Contingent Payment to Employee within ten
     (10) days after such cessation, but in any event on or before May 31, 2002.

4.   Employee releases, holds harmless, and covenants not to sue or bring any
     charge or other claim against Employer and it affiliates and the officers,
     directors, shareholders, owners, employees and agents of Employer and its
     affiliates (collectively, the "Released Parties") in connection with any
     matter relating to, connected with, or arising out of his employment by
     Employer (other than personal injury) or the termination of that
     employment. Further, Employee expressly waives any rights under any
     Employer severance plan, or, except as expressly provided herein, any other
     Employer benefit plan. Specifically, but without limitation, Employee
     releases Employer and the Released Parties from, and agrees that he


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     will not bring any action against Employer or any of the Released Parties
     based on, any claim or denial of equal employment opportunity or
     discrimination in violation of any statute or regulation governing
     employment practices and specifically releases any such claim or action
     relating to age discrimination, including any claim under the federal Age
     Discrimination in Employment Act. Further, also without limitation,
     Employee agrees that he will not bring any action or other claim against
     Employer or any Released Party based on any theory of wrongful termination,
     intentional or negligent infliction of mental distress or other tort,
     breach of express or implied contract, or promissory estoppel. Any rights
     Employee is entitled to under his employment with Employer that are not
     specifically enumerated in this Agreement are canceled upon the Separation
     Date. This paragraph shall not preclude Employee from bringing an action to
     enforce the terms of this Agreement.

5.   Employee will be entitled to benefits under the Eagle-Picher Salaried
     Pension Plan, the Eagle-Picher Supplemental Executive Retirement Plan
     ("SERP"), and the Eagle-Picher Salaried 401(k) Plan in accordance with the
     terms of those plans. Benefits under each of those plans will be calculated
     utilizing the Separation Date as the date of the Employee's termination of
     employment. Employee specifically acknowledges, agrees to and accepts the
     amendments to Employer's Supplemental Executive Retirement Plan made as of
     March 27, 2001. Employee specifically acknowledges, agrees to and accepts
     Rule No. 1 under the Second Amended and Restated Incentive Stock Plan of
     Eagle-Picher Industries, Inc. (the "Stock Plan") adopted by the Committee
     for the Stock Plan; provided, however, that the payments and benefits
     contemplated by this Agreement shall in no event be, or be deemed to be,
     prohibited, limited or otherwise restricted by such Rule, it being the
     intent and agreement of the parties that the negotiated payments and
     benefits provided for in this Agreement not be


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     the same as those contemplated under the terms and conditions applicable to
     Employee's employment with Employer. Employee also specifically
     acknowledges, agrees to and accepts the adjustments to the Agreed Share
     Price made by the Committee for the Plan on March 27, 2001 and agrees that
     the Agreed Share Price for shares of Restricted Stock under the Stock Plan
     shall be $94.06; provided, however, that the payments and benefits
     contemplated by this Agreement shall in no event be, or be deemed to be,
     prohibited, limited or otherwise restricted by such Rule, it being the
     intent and agreement of the parties that the negotiated payments and
     benefits provided for in this Agreement not be the same as those
     contemplated under the terms and conditions applicable to Employee's
     employment with Employer.

6.   Employee shall hold all Confidential Information (as defined below) in
     strict confidence and not disclose any Confidential Information except as
     expressly provided herein and shall not use any Confidential Information
     for his own benefit or otherwise against the best interests of Employer. As
     used herein, "Confidential Information" shall mean any information
     regarding Employer and/or its affiliates (whether written, oral or
     otherwise), received or obtained before, on or after the date hereof,
     including without limitation any product design, specification or other
     technical information, manufacturing or other process information,
     financial information, customer information, general business information,
     or market information, WHETHER OR NOT marked or designated as
     "Confidential," "Proprietary" or the like, in any form, including
     electronic or optical data storage and retrieval mechanisms, and including
     all forms of communication, including but not limited to physical
     demonstrations, in-person conversations and telephone conversations, email
     and other means of information transfer such as facility tours, regardless
     of whether any such information is protected by applicable trade secret or
     similar laws. The term "Confidential Information" shall not include


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     information which: (i) is or becomes generally available to the public
     other than as a result of the disclosure by Employee or another person
     bound by a confidentiality agreement with, or other legal or fiduciary or
     other obligation of secrecy or confidentiality to, Employer or another
     party with respect to such information; or (ii) becomes available to
     Employee from a source other than Employer or any of its directors,
     officers, employees, agents, affiliates, representatives, or advisors,
     provided that such source is not bound by a confidentiality agreement with,
     or other legal or fiduciary or other obligation of secrecy or
     confidentiality to, Employer or another party with respect to such
     information. If Employee shall be required by subpoena or similar
     government order or other legal process ("Legal Process") to disclose any
     Confidential Information, then Employee shall provide Employer with prompt
     written notice of such requirement and cooperate if requested with Employer
     in efforts to resist disclosure or to obtain a protective order or similar
     remedy. Subject to the foregoing, if Confidential Information is required
     by Legal Process to be disclosed, then Employee may disclose such
     Confidential Information but shall not disclose any Confidential
     Information for a reasonable period of time, unless compelled under
     imminent threat of penalty, sanction, contempt citation or other violation
     of law, in order to allow Employer time to resist disclosure or to obtain a
     protective order or similar remedy. If Employee discloses any Confidential
     Information, then Employee shall disclose only that portion of the
     Confidential Information which, in the opinion of counsel, is required by
     such Legal Process to be disclosed. Employee represents and warrants to
     Employer that as of the date this Agreement becomes irrevocable, Employee
     will not have in his possession or in the possession of any of his family
     members any Confidential Information in tangible form (including electronic

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     computer files). Employee also agrees not to disparage Employer or any of
     its shareholders, directors, officers or employees and Employer agrees not
     to disparage Employee.

7.   If Employee brings an action or other claim against Employer or any
     Released Party in violation of paragraph 5 or otherwise materially breaches
     this Agreement, in addition to any and all damages to which Employer or a
     Released Party may be entitled, all payments and benefits to Employee set
     forth in paragraph 2 above shall cease (excepting any benefit received in
     accordance with the requirements of C.O.B.R.A.). Employer shall give
     Employee notice of a claim that Employee has materially breached this
     Agreement and Employee shall have a period of thirty (30) days to cure such
     breach if it is capable of cure (provided that Employer may seek immediate
     injunctive relief for a breach or threatened breach of this Agreement).
     Employee acknowledges and agrees that in the event of any breach or
     threatened breach of this Agreement by Employee, then Employer shall be
     entitled to specific performance and injunctive relief as a remedy for any
     such breach or threatened breach hereof without necessity of posting bond
     or other security, the requirement for which is expressly waived. Employee
     agrees not to raise and hereby waives any defense to injunctive relief
     based on lack of irreparable harm or sufficiency of monetary damages. Such
     remedy shall not be deemed to be the exclusive remedy for any breach of
     this Agreement, but shall be in addition to all other remedies available to
     Employer at law or in equity.

8.   Employee recognizes that the release and waiver provisions of this
     Agreement may surrender valuable legal rights. He acknowledges full
     awareness of the extinguishment of such rights in exchange for the
     consideration provided under this Agreement. Employee further acknowledges
     that he has been advised by Employer to consult an attorney with respect to
     this Agreement prior to executing it. Further, Employee acknowledges that
     he has been given


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     twenty-one (21) calendar days from initial presentation of this Agreement
     on October 12, 2001 in order to consult an attorney.

9.   This Agreement shall be binding upon Employer as of the date of its
     execution and presentation by Employer if it is executed by the Employee
     within twenty-one (21) calendar days of presentation by Employer and not
     later rescinded as provided herein. If Employee does not execute this
     Agreement and deliver it to Employer within twenty-one (21) calendar days
     of presentation by Employer, it shall be voidable at the option of
     Employer. Employee, at his sole election and option, shall be entitled to
     rescind and withdraw from this Agreement without further obligation at
     anytime within seven (7) calendar days from the date Employee executes the
     Agreement. Employee shall evidence any withdrawal and rescission by giving
     written notice to Employer's Senior Vice President and General Counsel, 250
     E. 5th Street, 5th Floor, Cincinnati, Ohio 45202, telecopy (513) 629-2571,
     with a written notice stating that Employee rescinds the Agreement and
     withdraws from it. If Employee has not given Employer such written notice
     on or before the expiration of such seven (7) calendar days from the date
     Employee executes the Agreement, this Agreement shall be irrevocable. The
     day on which such seven day period ends shall be referred to herein as the
     ("Effective Date").

Executed and presented as of the 1st day of November 2001.

                         EAGLE-PICHER INDUSTRIES, INC.


                         By:
                               ----------------------------
                         Name:  DAVID G. KRALL
                               ----------------------------
                         Title: SENIOR VICE PRESIDENT
                               ----------------------------


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Executed and agreed to this 1st day of November 2001.

                                    By:
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                                         Philip F. Schultz



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