MAYFIELD HEIGHTS, OHIO — The proxy contest between Ferro Corp. and a group of dissident shareholders is over, with the parties agreeing to drop their swords in a battle over board seats at the maker of specialty chemicals.
The two sides also agreed to form a board committee to evaluate what Ferro called "strategies to enhance shareholder value."
Ferro and the dissidents, FrontFour Capital Group and Quinpario Partners, have agreed that two members of the FrontFour-Quinpario group, Jeffry N. Quinn and David A. Lorber, will stand for election as Ferro nominees to the board of directors at Ferro's annual meeting May 15.
A third member of the FrontFour-Quinpario group, Nadim Z. Qureshi, will not stand for election.
Ferro said Ronald P. Vargo, a current member of the Ferro board, will be the third candidate for election to the board. Richard C. Brown and Gregory E. Hyland will not stand for re-election. As a result, Ferro's slate of nominees will consist of Quinn, Lorber and Vargo.
Ferro said Sandra Austin will resign from the board at the 2013 annual meeting, and Hyland will be appointed by the board to the class of directors to serve through the 2014 annual meeting to fill the vacancy created by Austin's resignation.
Under the terms of the agreement, the FrontFour-Quinpario group has agreed to vote its shares in favor of each of the Ferro board's nominees. In addition, the FrontFour-Quinpario group has agreed to abide by certain "standstill" restrictions, Ferro stated, though the company was not more specific.
"We believe this agreement with the FrontFour-Quinpario group is in the best interests of the company and all Ferro shareholders," William B. Lawrence, Ferro chairman, said in a news release.
Quinn, chairman and CEO of Quinpario Partners LLC, said his side is "delighted to have reached an agreement with Ferro and we look forward to working together constructively with the board and management team to help drive value for Ferro shareholders."
Ferro said the board committee that will evaluate strategies to enhance shareholder value will be charged with "optimizing the company's capital structure, reviewing strategic proposals, reviewing Ferro's mix of businesses, and improving operating performance."
Ferro said the Strategy Committee will be comprised of five members, consisting of three directors designated by the company, as well as Messrs. Quinn and Lorber. In addition, upon election to the board, Messrs. Quinn and Lorber will be appointed as members of either the board's Governance & Nomination Committee or Compensation Committee.
As a result of the agreement between the parties, Ferro said, any white or green proxy cards that shareholders may have submitted will not be voted at the 2013 annual meeting. Shareholders instead will be asked to vote on the yellow proxy card to be provided by the company.
The annual meeting still is slated for 9:00 a.m. May 15 at the Posnick Center of Innovative Technology, 7500 East Pleasant Valley Road in Independence.
Ferro remains the object of a hostile takeover bid by Fairlawn, Ohio-based A. Schulman Inc.