UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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| FERRO CORPORATION | ||||
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 Ferro
Corporation Investor Presentation
Materials
April 2012 |
 Agenda
A.
Ferro’s Commitment to Good Corporate Governance
B.
Ferro’s Improved Income and Financial Performance
C.
Proxy Access Proposal
D.
Board’s Reasons for Opposing the Proposal
2 |
 A.
Ferro’s Commitment to Good Corporate Governance
•
Good corporate governance enhances investor confidence in Ferro and increases
shareholder value
•
Development and maintenance of sound governance practices is fundamental to
Ferro’s strategy and ensures alignment with shareholder
interests •
Ferro has taken steps that demonstrate this commitment
Corporate governance principles are designed so that the Board can provide
informed, competent and independent oversight
Nine of ten Directors are independent
Four new independent Directors added since December 2009
–
Another new independent director candidate on 2012 ballot
Board has an independent Lead Director
Non-management Directors meet regularly
Shareholders may communicate directly with the Lead Director or non-management
Directors
As discussed in our proxy statement, the Compensation Committee has revised
executive compensation to more closely tie pay and performance
3 |
 B.
Ferro’s Improved Income Performance •
Adjusted net income in 2010 and 2011
was significantly improved over prior
periods
•
Adjusted loss in 2009 was due to the
global economic downturn
•
Adjusted net income (loss) excludes
special charges, including restructuring,
impairments and refinancing charges
Sell-side analysts and institutional
investors generally evaluate
performance on an adjusted basis
4
Adjusted Net Income ($M)
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
($20.00)
2004
2005
2006
2007
2008
2009
2010
2011 |
 B.
Ferro’s Improved Financial Performance (continued)
•
Restructuring and refinancing charges were much lower in 2011
Total special charges in 2011 were $26.2 million, down from $125.4 million during
2010
Reported earnings improved to $0.36 per diluted share in 2011, compared with $0.06
per
diluted
share
in
2010,
in
large
part,
due
to
reduced
special
charges
•
Improved financial performance in 2010 and 2011 reflects completion of the
majority of the manufacturing rationalization and realignment started in
2006 •
Lower cost structure, resulting from restructuring initiatives, has helped drive
Ferro’s improved adjusted net income performance
•
Ferro’s stock price performance in 2011 was consistent with other
participants in the global solar energy market (suppliers and solar cell
manufacturers) Stock price performance was not driven by
Company-specific performance, but rather, by weak global demand that
affected the industry generally 5 |
 C.
Proxy Access Proposal •
Kenneth Steiner, a retail investor, submitted a non-binding proxy access
proposal to several companies, including Ferro
•
Proposal requests that Ferro’s Board amend Ferro’s governing documents
so that certain shareholders can use Ferro’s proxy statement to
nominate Directors Shareholders (or groups of shareholders) that have held
1% ownership continuously for at least two years
Any group of shareholders of whom 100 or more satisfy the requirements to
submit a Rule 14a-8 proposal to Ferro (i.e., held at least
$2,000 in value, or 1%, of shares for at least one
year) •
Shareholders and groups of shareholders that meet either of these criteria may
nominate one individual every year
•
Proposal entitles every nominee to include a 500-word statement in proxy
statement •
Proposal
requires
Ferro
to
deem
there
to
be
no
change
in
control
regardless
of
Board
turnover
6 |
 D.
Board’s Reasons for Opposing the Proposal •
Proposal’s eligibility requirements are inappropriately low
Proposal would allow nominations from 1% shareholders (two year hold) and groups
of 100+ shareholders with as little as $2,000 per shareholder (one year
hold) Requirements are significantly below those put forward by SEC
•
Proposal fails to limit total number of nominations in any year
Approximately 20 shareholders own at least 1% or more of Ferro stock
Over 2,800 shareholders own $2,000 or more in Ferro stock
Shareholders
could
nominate
between
20
and
nearly
50
individuals
for
election
to
the
Board every year, in addition to the Company’s 3-4 nominees
•
Proposal would be impractical and expensive for Ferro to manage
7
Would require substantial management time and Company resources
Proposal could have a highly disruptive effect by turning every election into a
proxy contest •
Proposal fails to limit total number of individuals who may be elected through
proposed process
Board could become fragmented and ineffective
Continual substantial Board member turnover could preclude execution on any
long- term strategy |
 D.
Board’s Reasons for Opposing the Proposal (continued)
•
Proposal fails to require nominating shareholder to disclaim
change-in-control intent •
Proposal requires Ferro to take position contrary to existing contracts, may cause
it to breach existing contracts, and could affect Company’s ability to
obtain financing and enter into other ordinary contracts
Proposal would require Ferro to deem a substantial change in Board membership not
to constitute a change in control even when existing contracts provide
otherwise Proposal would require Ferro to permit elections that could cause
it to breach change in control provisions in existing financing,
commercial, and other agreements Proposal could undermine Ferro’s
ability to obtain financing and enter into ordinary commercial arrangements
by preventing Company from agreeing to change in control provisions
commonly required in such agreements 8 |
 D.
Board’s Reasons for Opposing the Proposal (continued)
•
Proposal is not necessary because Ferro’s policies and procedures already
provide shareholders with opportunity for meaningful input in the Director
nomination and election process
Shareholders
may
recommend
Director
candidates
for
consideration
by
the
Governance & Nomination Committee
Shareholders
may
nominate
Director
candidates
at
annual
meetings
and
solicit
proxies in favor of those nominees
Shareholders may cumulate votes in Director elections
9 |