Ferro Corporation Announces Corporate Governance Plans
Board to Recommend Declassification and Other Steps
Peter T. Thomas to be Named Chairman of the Board
CLEVELAND--(BUSINESS WIRE)--Ferro Corporation (NYSE: FOE; “Ferro” or the “Company”) announced today that its Board of Directors (the “Board”) has voted to recommend that shareholders approve the declassification of the Board and other governance practices in furtherance of the Company’s continuing commitment to serve the long-term interests of all Ferro shareholders. The Board also announced its intention to appoint Peter T. Thomas, the Company’s President and Chief Executive Officer, to the additional role of Chairman of the Board.
At the Company’s 2014 Annual Meeting, the Company will propose a conditional amendment to its Code of Regulations to declassify its Board of Directors and a conditional amendment to its Eleventh Amended Articles of Incorporation to eliminate cumulative voting in the election of directors, in each case beginning with the election of directors at the 2014 Annual Meeting.
If both amendments are approved by Ferro shareholders, the declassification would be implemented via a phased-in approach. Under this approach, the director nominees of the class standing for election at the 2014 Annual Meeting would be elected to one-year terms and the directors in the two remaining classes would serve out their three-year terms until the 2015 or 2016 Annual Meeting, as applicable. The amended Code of Regulations would provide that directors elected at and after the 2014 Annual Meeting would serve for one-year terms.
Each of the above proposals is conditioned on the approval of the other, and neither proposal will take effect unless shareholders approve both proposals at the 2014 Annual Meeting.
In addition, before or immediately following the Company’s 2014 Annual Meeting, the Company will take action to amend its Code of Regulations to eliminate provisions containing voting or participation requirements that are greater than a simple majority standard.
The Board has decided that, at the organizational meeting of the Board of Directors immediately following the 2014 Annual Meeting, the Company’s President and Chief Executive Officer, Peter T. Thomas, will be appointed to the additional role of Chairman of the Board. In connection with that appointment, William B. Lawrence has agreed that, if re-elected at the 2014 Annual Meeting, he will step down from his position as Chairman of the Board. Mr. Lawrence commented, “Peter Thomas has demonstrated extraordinary leadership and commitment to shareholders since his appointment as Interim President and Chief Executive Officer in November 2012. Those qualities were essential to the Board’s decision to name him President and Chief Executive Officer in April 2013 and they underlie the Board’s decision to name him Chairman following our 2014 Annual Meeting. Peter has led Ferro’s execution of the value creation strategy for more than fifteen months and set a clear vision for the Company’s future. We look forward to the additional contributions he can make as Chairman of the Board.”
Mr. Thomas said, “I appreciate the expression of confidence in my leadership reflected by the Board’s decision. It is a privilege to lead this Company and its employees on our mission to bring value to our shareholders. I especially want to thank our Chairman, Bill Lawrence, for his leadership of the Board since November 2012 and his unwavering support of me and our value creation strategy. I look forward to Bill’s continued support after I assume the role of Chairman.”
The Board also has agreed to appoint Gregory E. Hyland, if re-elected at the 2014 Annual Meeting, as Lead Director and as Chair of the Board’s Governance & Nomination Committee. Mr. Hyland has been a member of the Ferro Board since 2009 and a member of the Board’s Governance & Nomination Committee since 2010. Mr. Hyland is Chairman, President and Chief Executive Officer of Mueller Water Products, Inc.
About Ferro Corporation
Ferro Corporation (http://www.ferro.com) is a leading global supplier of technology-based performance materials and chemicals for manufacturers. Ferro products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. The Company has approximately 4,360 employees and is headquartered in Mayfield Heights, Ohio.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of Federal securities laws. These statements are subject to a variety of uncertainties, unknown risks, and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following:
- demand in the industries into which Ferro sells its products may be unpredictable, cyclical, or heavily influenced by consumer spending;
- Ferro’s ability to successfully implement its value creation strategy;
- Ferro’s ability to successfully implement and/or administer its cost-saving initiatives, including its restructuring programs, and to produce the desired results, including projected savings;
- restrictive covenants in the Company’s credit facilities could affect its strategic initiatives and liquidity;
- Ferro’s ability to access capital markets, borrowings, or financial transactions;
- the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
- the availability of reliable sources of energy and raw materials at a reasonable cost;
- currency conversion rates and economic, social, regulatory, and political conditions around the world;
- Ferro’s presence in certain geographic regions, including Latin America and Asia-Pacific, where it can be difficult to compete lawfully;
- increasingly aggressive domestic and foreign governmental regulations on hazardous materials and regulations affecting health, safety, and the environment;
- Ferro’s ability to successfully introduce new products or enter into new growth markets;
- sale of products into highly regulated industries;
- limited or no redundancy for certain of the Company’s manufacturing facilities and possible interruption of operations at those facilities;
- Ferro’s ability to complete future acquisitions or dispositions, or successfully integrate future acquisitions;
- competitive factors, including intense price competition;
- Ferro’s ability to protect its intellectual property or to successfully resolve claims of infringement brought against the Company;
- management of Ferro’s general and administrative expenses;
- Ferro’s multi-jurisdictional tax structure;
- the impact of the Company’s performance on its ability to utilize significant deferred tax assets;
- the effectiveness of strategies to increase Ferro’s return on capital;
- the impact of operating hazards and investments made in order to meet stringent environmental, health, and safety regulations;
- stringent labor and employment laws and relationships with the Company’s employees;
- the impact of requirements to fund employee benefit costs, especially post-retirement costs;
- implementation of new business processes and information systems;
- the impact of damage to, or interruption, failure, or compromise of, the Company’s information systems;
- exposure to lawsuits in the normal course of business;
- risks and uncertainties associated with intangible assets;
- Ferro’s borrowing costs could be affected adversely by interest rate increases;
- liens on the Company’s assets by its lenders affect its ability to dispose of property and businesses;
- Ferro may not pay dividends on its common stock in the foreseeable future; and
- other factors affecting the Company’s business that are beyond its control, including disasters, accidents, and governmental actions.
The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations.
This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information, or circumstances that arise after the date of this release. Additional information regarding these risks can be found in our Annual Report on Form 10-K for the period ended December 31, 2012.