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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from........TO.........
Commission File Number 1-584
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FERRO CORPORATION
(Exact name of registrant as specified in its charter)
An Ohio Corporation 1000 LAKESIDE AVENUE, CLEVELAND, OH 44114 I.R.S. No. 34-0217820
(Address of principal executive offices)
Registrant's telephone number, including area code: 216-641-8580
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Class Name of Exchange on which registered
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Common Stock, par value $1.00 New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
7 5/8% Debentures due May 1, 2013
7 3/8% Debentures due November 1, 2015
8% Debentures due June 15, 2025
Series A ESOP Convertible Preferred Stock, without Par Value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
On February 27, 1996, there were 26,773,241 shares of Ferro Common Stock, par
value $1.00 outstanding. As of the same date, the aggregate market value (based
on closing sale price) of Ferro's Common Stock held by nonaffiliates was
$696,104,266.
DOCUMENTS INCORPORATED BY REFERENCE
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Portions of Annual Report to Shareholders for the year ended December 31, 1995
(Incorporated into Parts I, II and IV of this Form 10-K).
Portions of Ferro Corporation's Proxy Statement dated March 12, 1996
(Incorporated into Parts II and III of this Form 10-K).
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TABLE OF CONTENTS
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PART I
Item 1. Business............................................................................................. Page 3
Item 2. Properties........................................................................................... Page 7
Item 3. Legal Proceedings.................................................................................... Page 7
Item 4. Submission of Matters to a Vote of Security Holders.................................................. Page 7
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters................................ Page 9
Item 6. Selected Financial Data.............................................................................. Page 9
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................ Page 9
Item 8. Financial Statements and Supplementary Data.......................................................... Page 9
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure................. Page 9
PART III
Item 10. Directors and Executive Officers of the Registrant.................................................. Page 10
Item 11. Executive Compensation.............................................................................. Page 10
Item 12. Security Ownership of Certain Beneficial Owners and Management...................................... Page 10
Item 13. Certain Relationships and Related Transactions...................................................... Page 10
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..................................... Page 10
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PART I
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ITEM 1- BUSINESS
Ferro Corporation ("Ferro"), which was incorporated under the laws of Ohio
in 1919, is a worldwide producer of specialty materials for industry by organic
and inorganic chemistry. It operates (either directly or through wholly-owned
subsidiaries or partially-owned affiliates) in 21 countries worldwide. Ferro
produces a variety of specialty coatings, colors, ceramics, plastics,
chemicals, and related products and services. Ferro's most important product is
frit produced for use in porcelain enamels and ceramic glazes.
Most of the products produced by Ferro are classified as specialty
materials, rather than commodities, because they are formulated or designed to
perform a specific and important function in the manufacturing processes of
Ferro customers or in their end products. These specialty materials are not
sold in the high volume normally associated with commodity businesses.
Ferro specialty materials require a high degree of technical service on an
individual customer basis. The value of these specialty materials stems not
just from their raw materials composition, but from the result and performance
they achieve in actual use.
A further description of Ferro's business, its principal products, their
markets and applications is contained under all headings on pages 6 through 13
of its 1995 Annual Report to Shareholders, which is attached hereto as Exhibit
13 (the "Annual Report"). The information contained under the aforementioned
headings on pages 6 through 13 of the Annual Report (excluding pages 8, 10 and
12 on which only pictures and text describing such pictures appear and the
pictures and text describing such pictures on pages 9, 11 and 13) is
incorporated herein by reference. Information concerning Ferro's business
during 1995, 1994, and 1993 and certain transactions consummated during those
years is included under the heading "Management's Discussion and Analysis" on
pages 14 through 18 of the Annual Report and in Note 6 to Ferro's Consolidated
Financial Statements, which are included in the Annual Report. Note 6 appears
at pages 26 and 27 of the Annual Report. Such information is incorporated
herein by reference. Additional information about Ferro's industry segments,
including financial information relating thereto, is set forth in Note 11 to
Ferro's Consolidated Financial Statements, which appears on pages 30 and 31 of
the Annual Report and is incorporated herein by reference.
RAW MATERIALS
For the most part the raw materials essential to Ferro's operations both
in the United States and overseas are obtainable from multiple sources
worldwide. Ferro did not encounter significant raw material shortages in 1995
and does not anticipate such shortages in 1996.
PATENTS AND LICENSES
Ferro owns a substantial number of patents relating to its various
products and their uses. While these patents are of importance to Ferro, it
does not consider that the invalidity or expiration of any single patent or
group of patents would have a material adverse effect on its business. Ferro
patents expire at various dates through the year 2016.
Ferro does not hold any licenses, franchises or concessions which it
considers to be material.
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CUSTOMERS
Ferro does not consider that a material part of its Coatings, Colors and
Ceramics or its Plastics businesses are dependent on any single customer or
group of customers. In the Chemicals segment however, the loss of two or three
of the largest customers could have a materially adverse effect on this
segment.
BACKLOG OF ORDERS
In general there is no significant lead time between order and delivery in
any of Ferro's business segments. As a result, Ferro does not consider that the
dollar amount of backlog of orders believed to be firm as of any particular
date is material for an understanding of its business. Ferro does not regard
any material part of its business to be seasonal.
COMPETITION
With respect to most of its products, Ferro competes with a substantial
number of companies, none of which is dominant. Exceptions to this are frit and
powder coatings markets, where Ferro believes that it is the largest worldwide
supplier. The details of foreign competition necessarily vary with respect to
each foreign market.
Because of the specialty nature of Ferro's products, product performance
characteristics and customer service are the most important components of the
competition which Ferro encounters in the sale of nearly all of its products.
However, in some of the markets served by Ferro, strong price competition is
encountered from time to time.
RESEARCH AND DEVELOPMENT
A substantial number of Ferro's employees are involved in technical
activities concerned with products required by the ever-changing markets of its
customers. Laboratories are located at each of Ferro's major subsidiaries
around the globe, where technical efforts are applied to the customer and
market needs of that geographical area. In the United States, laboratories are
maintained in each of its divisions. Backing up these divisional customer
services laboratories is corporate research activity involving approximately 57
scientists and support personnel in the Cleveland area.
Expenditures for research and development activities relating to the
development or significant improvement of new and/or existing products,
services and techniques were approximately $23,150,000, $22,919,000 and
$19,334,000 in 1995, 1994 and 1993, respectively. Expenditures for individual
customer requests for research and development were not material.
ENVIRONMENTAL MATTERS
Ferro's manufacturing facilities, like those of industry generally, are
subject to numerous laws and regulations designed to protect the environment,
particularly in regard to plant wastes and emissions. In general, Ferro
believes that it is in substantial compliance with the environmental
regulations to which its operations are subject and that, to the extent Ferro
may not be in compliance with such regulations, such non-compliance has not had
a material adverse effect on Ferro. Moreover, while Ferro has not generally
experienced substantial difficulty in complying with environmental
requirements, compliance has required a continuous management effort and
significant expenditures.
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Ferro and its international subsidiaries authorized approximately
$2,789,000, $6,040,000 and $8,970,000 in capital expenditures for environmental
control during 1995, 1994 and 1993, respectively.
Two projects accounted for the majority of the environmental control capital
expenditures in 1995:
a. Wastewater treatment plant expansion at Ferro
chemical facility in Baton Rouge, Louisiana $ 750,000
b. EDA removal from wastewater system at Ferro
chemical facility in Hammond, Indiana $ 660,000
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Total -- Major Projects (1995) $1,410,000
Two major projects accounted for the high level of environmental control
capital expenditures in 1994:
a. EDC collection and recovery system at a Ferro
chemical facility in Hammond, Indiana $3,250,000
b. Zinc oxide production effluent treatment system
in Portugal 1,370,000
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Total -- Major Projects (1994) $4,620,000
Three major projects accounted for the high level of environmental control
capital expenditures in 1993:
a. Wastewater treatment plant at a Ferro chemical
facility in France $2,300,000
b. Replacement of underground tank farms at a Ferro
chemical facility in Bedford, Ohio 1,600,000
c. Scrubbers at a Ferro facility in Brazil 1,400,000
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Total -- Major Projects (1993) $5,300,000
During 1995 the Company reached an agreement in principle to settle a suit
filed in August 1993 by the United States Environmental Protection Agency
alleging violation of the Clean Water Act and the Rivers and Harbors Act by
Keil Chemical, a production facility owned and operated by Ferro in Hammond,
Indiana. The Company had been named as one of several defendants, including
three local municipalities, one local government agency (a sewer district) and
four other area industrial concerns. Subject to the negotiation of an
acceptable consent decree, the Company will agree to pay a civil penalty of
$0.4 million and to pay $1.4 million into a fund to be established to help
clean up sediment in the West Branch of the Grand Calumet River. Terms of the
consent decree are still being negotiated.
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During 1994, the Company signed an Agreed Order with the Indiana
Department of Environmental Management and the Hammond Department of
Environmental Management (the "Agencies") settling the Agencies' claims that
the Keil Chemical facility had violated various air emission regulations.
Subject to satisfactory compliance with the terms of the Agreed Order, the
United States Environmental Protection Agency has concluded its Notice of
Violations against the Keil facility. Under the Agreed Order, the Company paid
a civil cash penalty of $1.5 million, constructed a supplemental environmental
project and commenced reduction of air emissions to reach compliance with
federal and state air emission regulations under compliance schedules as
contained in the Agreed Order.
EMPLOYEES
At December 31, 1995, Ferro employed approximately 6,914 full-time
employees, including 4,059 employees in its foreign subsidiaries and affiliates
and 2,855 in the United States.
Approximately 25% of the domestic workforce is covered by labor
agreements, and approximately 4% is affected by union agreements which expire
in 1996.
FOREIGN OPERATIONS
Financial information about Ferro's domestic and foreign operations is set
forth on page 31 of the Annual Report and is incorporated herein by reference.
Ferro's products are produced and distributed in foreign as well as
domestic markets. Ferro commenced its international operations in 1927.
Wholly-owned subsidiaries operate manufacturing facilities in Argentina,
Australia, Brazil, Canada, England, France, Germany, Holland, Italy, Mexico,
Spain, Taiwan and Thailand. Partially-owned affiliates manufacture in Ecuador,
Indonesia, Japan, Portugal, Taiwan, Turkey and Venezuela.
Foreign operations (excluding Canada) accounted for 50% of the
consolidated net sales and 53% of Ferro's consolidated operating income for the
fiscal year 1995; comparable amounts for the fiscal year 1994 were 50% and 60%
and for fiscal year 1993 were 50% and 53%.
Except for the sales of Ferro Enamel Espanola S.A. (Spain), Ferro France,
S.a.R.L. (France), Ferro Chemicals S.A. (France), Ferro (Holland) B.V., Ferro
Mexicana S.A. de C.V. (Mexico), Ferro (Great Britain) Ltd., Ferro Industrial
Products Limited (Taiwan), Ferro Toyo Co., Ltd. (Taiwan) and Metal Portuguesa
S.A. (Portugal), the sales of each of Ferro's subsidiaries are principally for
delivery in the country in which the subsidiary is located. Ferro's European
Community subsidiaries continue to reduce and eliminate, to the extent
practical, duplication of product lines with the intended result being that
only one subsidiary will be the primary provider of each line of Ferro
specialty products to the entire European Community market.
Ferro receives technical service fees and/or royalties from many of its
foreign subsidiaries. Historically, as a matter of general corporate policy,
the foreign subsidiaries have been expected to remit a portion of their annual
earnings to the parent as dividends. Several of the countries where Ferro has
subsidiaries control the transfer of currency out of the country, but in recent
years Ferro has been able to receive such remittances without material
hindrance from foreign government restrictions. To the extent earnings of
foreign subsidiaries are not remitted to Ferro, such earnings are intended to
be indefinitely invested in those subsidiaries.
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ITEM 2 - PROPERTIES
Ferro's Research and Development Center is located in leased space in
Independence, Ohio. The corporate headquarters office is located at 1000
Lakeside Avenue, Cleveland, Ohio and such property is owned by the Company. The
business segments in which Ferro's plants are used and the locations of the
principal manufacturing plants it owns in the United States are as follows:
COATINGS, COLORS AND CERAMICS -- Cleveland, Ohio; Nashville, Tennessee;
Pittsburgh, Pennsylvania; Toccoa, Georgia; Orrville, Ohio; Shreve, Ohio; Penn
Yan, New York; East Liverpool, Ohio; Crooksville, Ohio and East Rochester, New
York.
PLASTICS -- Plymouth, Indiana; Evansville, Indiana; Stryker, Ohio;
Edison, New Jersey and South Plainfield, New Jersey.
CHEMICALS -- Bedford, Ohio; Hammond, Indiana and Baton Rouge, Louisiana.
In addition, Ferro leases manufacturing facilities in Cleveland, Ohio
(Chemicals); Fort Worth, Texas (Chemicals); Santa Barbara, California
(Coatings) and San Marcos, California (Coatings).
Outside the United States, Ferro or its subsidiaries own manufacturing
plants in Argentina, Australia, Brazil, Canada, France, Germany, Indonesia,
Italy, Japan, Mexico, the Netherlands, Portugal, Spain, Taiwan, Thailand and
the United Kingdom. Ferro or its subsidiaries lease manufacturing plants in
Portugal, Germany and the Netherlands. In many instances, the manufacturing
facilities outside of the United States are used in multiple business segments
of Ferro.
Ferro believes that all of the foregoing facilities are generally well
maintained and adequate for their present use. During the past year, several of
Ferro's plants have been operating near capacity.
ITEM 3 - LEGAL PROCEEDINGS
Information set forth in Note 7 to Ferro's Consolidated Financial
Statements on page 27of the Annual Report is incorporated herein by reference.
Information regarding certain legal proceedings with respect to
environmental matters is contained under Part I of this Annual Report on Form
10-K.
The law firm of Squire, Sanders & Dempsey, of which Mark A. Cusick is a
partner, provided legal services to Ferro in 1995 and Ferro plans to continue
the use of such firm in 1996. Mr. Cusick is the Secretary of Ferro.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Ferro's security holders during the
fourth quarter of the fiscal year covered by this report.
EXECUTIVE OFFICERS OF THE REGISTRANT
There is set forth below the name, age, positions and offices held by each
individual serving as executive officer as of March 15, 1996 as well as their
business experience during the past five years. Years indicate the year the
individual was named to the indicated position. There is no family
relationship between any of Ferro's executive officers.
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Albert C. Bersticker - 61
Chairman of the Board and Chief Executive Officer, 1996
President and Chief Executive Officer, 1991
President and Chief Operating Officer, 1988
Werner F. Bush - 56
Executive Vice President and Chief Operating Officer, 1993
Senior Vice President, Coatings, Colors and Ceramics, 1991
Group Vice President, Coatings, Colors and Electronic
Materials, 1988
David G. Campopiano - 46
Vice President, Corporate Development, 1989
R. Jay Finch - 54
Vice President, Specialty Plastics, 1991
Vice President and General Manager, Plastics & Rubber Division,
Mobay Corporation, 1984
James B. Friederichsen - 53
Vice President, Specialty Chemicals, 1994
President, MTM Americas, 1990
D. Thomas George - 48
Treasurer, 1991
Director, Treasury Operations, 1989
J. Larry Jameson - 58
Vice President, Powder Coatings, 1996
Self Employed, Coatings Consultant, 1993
Chief Executive Officer, Pirelli Cable Corporation, 1993
President, Coatings and Colorants Division, BASF Corporation,
1986
Charles M. Less - 46
Vice President, Marketing, 1995
Group Market Manager, Rohm and Haas, 1992
Business Manager Coatings, Europe, Rohm and Haas, 1987
Hector R. Ortino - 53
President, 1996
Executive Vice President and Chief Financial-Administrative
Officer, 1993
Senior Vice President and Chief Financial Officer, 1991
Vice President, Finance and Chief Financia Officer, 1987
Richard C. Oudersluys - 56
Vice President, Inorganic Coatings and Colorants, 1994
Vice President, Pigments and Glass/Ceramics Colorants, 1992
General Manager, Color Division, 1987
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Thomas O. Purcell, Jr. - 51
Vice President, Research and Development, 1991
Associate Director Research, Plastics, 1990
Gary H. Ritondaro - 49
Vice President and Chief Financial Officer, 1996
Vice President, Finance, 1993
Vice President, Controller, 1991
Controller, 1986
PART II
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ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Information regarding the recent price and dividend history of Ferro's
Common Stock, the principal market for its Common Stock and the number of
holders thereof is set forth under the heading "Quarterly Data" on page 34 of
the Annual Report. Said information is incorporated herein by reference.
Information concerning dividend restrictions is contained in Note 3 to Ferro's
Consolidated Financial Statements on pages 24 and 25 of the Annual Report and
said information is incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
The summary of selected financial data for each of the last five years set
forth under the heading "Selected Financial Data " on pages 32 and 33 of the
Annual Report is incorporated herein by reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
The information contained under the heading "Management's Discussion and
Analysis" on pages 14 through 18 of the Annual Report is incorporated herein by
reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of Ferro and its subsidiaries
contained on pages 19 through 31, inclusive, of the Annual Report, including
the Notes to Consolidated Financial Statements, are incorporated herein by
reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are no such changes or disagreements.
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PART III
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ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding directors of Ferro contained under the headings
"Election of Directors" and "Certain Matters Pertaining to the Board of
Directors" on pages 1 through 9, inclusive, of Ferro's Proxy Statement dated
March 12, 1996, is incorporated herein by reference. Information regarding
executive officers of Ferro is contained under Part I of this Annual Report on
Form 10-K.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this Item 11 is set forth under the heading
"Information Concerning Executive Officers" on pages 14 through 28, inclusive,
of Ferro's Proxy Statement dated March 12, 1996, and is incorporated herein by
reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is set forth under the headings
"Election of Directors" and "Security Ownership of Directors, Officers and
Certain Beneficial Owners" on pages 1 through 8 of Ferro's Proxy Statement
dated March 12, 1996 and is incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships or transactions that are required to be
reported.
PART IV
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ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. DOCUMENTS FILED AS PART OF THIS ANNUAL REPORT ON FORM 10-K:
(a) THE FOLLOWING CONSOLIDATED FINANCIAL STATEMENTS OF FERRO
CORPORATION AND ITS SUBSIDIARIES, CONTAINED ON PAGES 19 THROUGH 31,
INCLUSIVE, OF THE ANNUAL REPORT ARE INCORPORATED HEREIN BY
REFERENCE:
Consolidated Statements of Income for the years ended December 31,
1995, 1994 and 1993
Consolidated Balance Sheets at December 31, 1995 and 1994
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Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended December
31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
(b) THE FOLLOWING ADDITIONAL INFORMATION FOR THE YEARS 1995, 1994 AND
1993, IS SUBMITTED HEREWITH:
Independent Auditors' Report on Financial Statement Schedule
Schedule VIII - Valuation and Qualifying Accounts and Reserves
All other schedules have been omitted because the material is not
applicable or is not required as permitted by the rules and
regulations of the Securities and Exchange Commission, or the
required information is included in notes to consolidated financial
statements.
Financial statements of foreign affiliates in which Company
ownership exceeds 20 percent, accounted for on the equity method,
are not included herein since, in the aggregate, these companies do
not constitute a significant subsidiary.
Financial Statement Schedule VIII, together with the independent
Auditors' Report thereon, are contained on pages F-1 and F-2 of
this Annual Report on Form 10-K.
(c) EXHIBITS:
(3) Articles of Incorporation and by-laws
(a) Eleventh Amended Articles of Incorporation.
(Reference is made to Exhibit 3 to Ferro
Corporation's Quarterly Report on Form 10-Q for the
three months ended September 30, 1989, which Exhibit
is incorporated herein by reference.)
(b) Certificate of Amendment to the Eleventh Amended
Articles of Incorporation of Ferro Corporation filed
December 28, 1994. (Reference is made to Exhibit
(3)(b) to Ferro Corporation's Annual Report on Form
10-K for the year ended December 31, 1994, which
Exhibit is incorporated herein by reference.)
(c) Amended Code of Regulations. (Reference is made to
Exhibit (3)(b) to Ferro Corporation's Quarterly
Report on Form 10-Q for the three months ended June
30, 1987, which Exhibit is incorporated herein by
reference.)
(4) Instruments defining rights of security holders, including
indentures
(a) Revolving Credit Agreement by and between Ferro and
four commercial banks dated August 22, 1990.
(Reference is made to Exhibit 10 to Ferro
Corporation's Form 10-Q for the three months ended
September 30, 1990, which Exhibit is incorporated
herein by reference.)
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(b) Amendment Number 1 dated May 31, 1991, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4(b)(1) to Ferro Corporation's Quarterly Report on
Form 10-Q for the three months ended June 30, 1991,
which Exhibit is incorporated herein by reference.)
(c) Amendment Number 2 dated July 30, 1991, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4(b)(2) to Ferro Corporation's Form 10-Q for the
three months ended June 30, 1991, which Exhibit is
incorporated herein by reference.)
(d) Amendment Number 3 dated December 31, 1991, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4 to Ferro Corporation's Form 10-K for the year ended
December 31, 1991, which Exhibit is incorporated
herein by reference.)
(e) Amendment Number 4 dated July 21, 1992, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4 to Ferro Corporation's Form 10-Q for the three
months ended June 30, 1992, which Exhibit is
incorporated herein by reference.)
(f) Amendment Number 5 dated April 20, 1993, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4(b)(4) to Ferro Corporation's Form 10-Q for the
three months ended June 30, 1993, which Exhibit is
incorporated herein by reference.)
(g) Amendment Number 6 dated June 22, 1995, to the
Revolving Credit Agreement by and between Ferro and
four commercial banks. (Reference is made to Exhibit
4(b)(4) to Ferro Corporation's Form 10-Q for the
three months ended June 30, 1995, which Exhibit is
incorporated herein by reference.)
(h) Amendment Number 7 dated October 25, 1995 to the
Revolving Credit Agreement by and between Ferro
Corporation and four commercial banks. (Reference is
made to Exhibit 4(b)(4) to Ferro Corporation's Form
10-Q for the three months ended September 30, 1995,
which Exhibit is incorporated herein by reference.)
(i) Rights Agreement between Ferro Corporation and
National City Bank, Cleveland, Ohio, as Rights Agent,
dated as of March 21, 1986. (Reference is made to
Exhibit 1.2 to the Registration Statement on Form 8-A
dated March 26, 1986, which Exhibit is incorporated
herein by reference.)
(j) Amendment No. 1 to Rights Agreement between Ferro
Corporation and National City Bank, Cleveland, Ohio,
as Rights Agent, dated as of March 31, 1989.
(Reference is made to Exhibit 1 to Form 8-K filed
with the Commission on March 31, 1989, which Exhibit
is incorporated herein by reference.)
(k) The rights of the holders of Ferro's Debt Securities
issued and to be issued pursuant to an Indenture
between Ferro and Society National Bank, as Trustee,
are described in the form of Indenture dated May 1,
1993 filed as Exhibit 4(j) to Ferro Corporation's
Form
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10-Q for the three months ended June 30, 1993. Said
Exhibit is incorporated herein by reference.
(10) Material Contracts
(a) Key elements of Ferro's Incentive Compensation Plan
are set forth under the heading "Report of the
Compensation and Organization Committee" on pages 14
through 18 of the Proxy Statement dated March 20,
1995. Said description is incorporated herein by
reference.
(b) Ferro's 1995 Performance Share Plan. (Reference is
made to Exhibit A of Ferro Corporation's Proxy
Statement dated March 20, 1995, which exhibit is
incorporated herein by reference.)
(c) Ferro Corporation Savings and Stock Ownership Plan.
(Reference is made to Exhibit 4.3 to Ferro
Corporation's Quarterly Report on Form 10-Q for the
three months ended March 31, 1989, which Exhibit is
incorporated herein by reference.)
(d) Ferro's 1985 Employee Stock Option Plan for Key
Personnel (Amended and Restated). (Reference is made
to Exhibit A to Ferro Corporation's Proxy Statement
dated March 11, 1991, which Exhibit is incorporated
by reference.) Reference is also made to pages 13 and
14 of Ferro Corporation's Proxy Statement dated March
20, 1995, for an amendment to the plan and to pages
10 through 13 of Ferro Corporation's Proxy Statement
dated March 12, 1996 regarding proposed amendments to
the Plan, subject to shareholder approval at the 1996
annual meeting.
(e) Form of Indemnification Agreement (adopted January
25, 1991 for use from and after that date).
(Reference is made to Exhibit 10 to Ferro
Corporation's Form 10-K for the year ended December
31, 1990, which Exhibit is incorporated herein by
reference.)
(f) Agreement between Ferro Corporation and Frank A.
Carragher dated October 18, 1993. (Reference is made
to Exhibit 10.1 to Ferro Corporation's Form 10-K for
the year ended December 31, 1993, which Exhibit is
incorporated herein by reference.)
(g) Amended and Restated Executive Employment Agreement
dated July 28, 1995. (Reference is made to Exhibit 10
(b) of Ferro Corporation's Form 10-Q for the three
months ended September 30, 1995, which Exhibit is
incorporated herein by reference.)
(h) Schedule I listing the officers with whom Ferro has
entered into currently effective executive employment
agreements. A copy of such Schedule I is attached
hereto as Exhibit 10.
(i) Various agreements relating to an Asset Defeasance
Financing including a Participation Agreement dated
as of October 31, 1995 among Ferro Corporation, State
Street Bank and Trust Company (not in its individual
capacity but solely as Trustee), the financial
institutions named as Purchasers, and Citibank N.A,
as Agent, and a Lease dated October 31, 1995 between
State Street Bank and Trust Company (not in its
individual capacity but solely as Trustee) as Lessor
and Ferro Corporation as Lessee.
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The additional agreements are available upon request.
(Reference is made to Exhibit 10(a) of Ferro
Corporation's Form 10-Q for the three months ended
September 30, 1995, which Exhibit is incorporated
herein by reference.)
(j) Separation Agreement between Ferro Corporation and
James F. Fisher dated March 22, 1995 is attached
hereto as Exhibit 10.1.
(11) Statement Regarding Computation of Earnings per Share.
(12) Ratio of Earnings to Fixed Charges.
(13) Annual Report to Shareholders for the year ended December 31,
1995.
(21) List of Subsidiaries.
(23) Consent of KPMG Peat Marwick LLP to the incorporation by
reference of their audit report on
the Consolidated Financial Statements contained in the Annual
Report into Ferro's Registration Statements on Form S-8
Registration Nos. 2-61407, 33-28520 and 33-45582 and Ferro's
Registration Statement on Form S-3 Registration No. 33-51284
and Registration No. 33-63855.
2. REPORTS ON FORM 8-K:
No reports on Form 8-K were filed for the three months ended December 31,
1995
-14-
15
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
FERRO CORPORATION
By /s/Albert C. Bersticker
-------------------------
Albert C. Bersticker,
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons
on behalf of the Registrant and in their indicated capacities and as of this
27th day of March, 1996.
/s/Albert C. Bersticker Chairman and Chief Executive Officer and Director
Albert C. Bersticker (Principal Executive Officer)
/s/Gary H. Ritondaro Vice President and Chief Financial Officer
Gary H. Ritondaro (Principal Financial Officer and Principal Accounting Officer)
/s/Sandra Harden Austin Director
Sandra Harden Austin
/s/Paul S. Brentlinger Director
Paul S. Brentlinger
/s/Glenn R. Brown Director
Glenn R. Brown
/s/Werner F. Bush Director
Werner F. Bush
/s/William E. Butler Director
William E. Butler
/s/A. James Freeman Director
A. James Freeman
/s/John C. Morley Director
John C. Morley
/s/Hector R. Ortino Director
Hector R. Ortino
-15-
16
/s/Adolph Posnick Director
Adolph Posnick
/s/Rex A. Sebastian Director
Rex A. Sebastian
/s/Dennis W. Sullivan Director
Dennis W. Sullivan
-16-
17
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
------------------------------------------------------------
The Shareholders and Board of Directors Ferro Corporation
Under date of January 24, 1996, we reported on the consolidated balance sheets
of Ferro Corporation and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 1995, as
contained in the 1995 annual report to shareholders. These consolidated
financial statements and our report thereon are incorporated by reference in
the annual report on Form 10-K for the year 1995. In connection with our
audits of the aforementioned consolidated financial statements, we also audited
the related financial statement Schedule VIII, Valuation and Qualifying
Accounts and Reserves. This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion on
this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Cleveland, Ohio
January 24, 1996
F-1
18
FERRO CORPORATION AND SUBSIDIARIES
Schedule VIII - Valuation and Qualifying Accounts and Reserves
Years ended December 31, 1995, 1994 and 1993
(thousands of dollars)
Additions
--------------------
Balance at Charged to Charged Balance
Beginning Costs and to Other at End of
of Period Expenses Accounts Deductions Period
--------- -------- -------- ---------- ------
Year ended December 31, 1995
Valuation and qualifying accounts which
are deducted on consolidated balance
sheet from the assets to which they apply
Possible losses in collection of notes 12 (C)
and accounts receivable - trade $ 7,129 4,750 174 (B) 2,188 (A) 9,877
======== ======== ======== ======== =======
Year ended December 31, 1994
Valuation and qualifying accounts which
are deducted on consolidated balance
sheet from the assets to which they apply
Possible losses in collection of notes 68 (C)
and accounts receivable - trade $ 6,464 2,113 264 (B) 1,780 (A) 7,129
======== ======== ======== ======== =======
Year ended December 31, 1993
Valuation and qualifying accounts which
are deducted on consolidated balance
sheet from the assets to which they apply
Possible losses in collection of notes
and accounts receivable - trade $ 7,924 811 (517)(B) 1,754 (A) 6,464
======== ======== ======== ======== =======
Notes:
(A)Accounts written off, less recoveries
(B)Adjustment in respect of differences in rates of exchange
(C)Acquisitions and divestitures, net
F-2
19
EXHIBIT INDEX
-------------
Exhibit (10) Schedule I
Exhibit (10.1) Separation Agreement Between Ferro Corporation and James F.
Fisher
Exhibit (11) Statement Regarding Computation of Earnings per Share
Exhibit (12) Ratio of Earnings to Fixed Charges
Exhibit (13) Annual Report to Shareholders
Exhibit (21) List of Subsidiaries
Exhibit (23) Consent of KPMG Peat Marwick LLP
Exhibit (27) Financial Data Schedule (Electronic Filing Only)